Inputs for Finance Bill 2027

Now that President Bola Tinubu has openly asked anyone so inclined to make suggestions toward the preparation of the 2027 Finance Bill, every Nigerian citizen with the expertise should take advantage of the unusual invitation.

The probable purpose of this novel idea (of what may become a people’s budget) is to have a budget that reflects the aspirations, interests, and will of the citizens of Nigeria. If this is not just a public relations gimmick, but a true effort to reflect the will of the people in the 2027 budget, it is a welcome development and in the right direction.

This reminds one of the Bureau of Petitions, a centralised bureau, established by Emperor Napoleon Bonaparte to handle the legion of letters of requests made by French citizens. It was rumoured that the letters were usually sorted into batches according to subject matter to form a plan of action that the government carried out to address the prayers of the citizens.

For clarity, a Finance Bill is a government bill stating the government’s expected revenue and anticipated expenditure, usually sent to the legislature for approval and conversion into an Act of Parliament, to which the President will assent.

In simpler terms, a Finance Bill is the budget estimate prepared by the Executive Branch of government, usually presented on behalf of the government by the house majority leader, to the members of the legislative house for consideration and possible modification and addition.

The input of Nigerian citizens into the preparation of the 2027 budget may unwittingly lead to the zero-based budgeting that some Nigerians have been advocating for some many years without success, possibly because of its rigorous intellectual demands on those who will prepare it.

Zero-based budgeting, unlike the traditional envelope budgeting that simply makes allowance for inflation to the budget of the previous year, scrupulously scrutinises every budgetary item of revenue and expenditure to determine its inclusion and the monetary value it will attract. You could say that every item on the budget fights for its shirt.

According to the memo issued by the Federal Ministry of Finance, the call for inputs into the Finance Bill 2027 is expected to shape “better fiscal laws for a more productive and competitive Nigerian economy,” which should hopefully contribute to achieving the $1tn economy envisaged by President Bola Tinubu.

The government expects public input on core areas, including options for taxation and revenue; fiscal and macroeconomic policies; matters of fiscal responsibility, transparency, and accountability; and finance and economic regulations.

And for this purpose, the priority considerations are to: address policy gaps and implementation challenges; reduce unnecessary regulations and improve corporate governance and ease of doing business; strengthen institutional issues; and improve the drive for revenue mobilization, which is central to President Tinubu’s governance philosophy.

If everyone agrees that a national budget is no more than an inventory of revenue and expenditure choices made to develop an economy, maybe the government should take a more foundational perspective in this rare attempt to involve the people in the making of the 2027 budget.

Cosmetic, or gradualist, tinkering won’t solve the economic problems that confront Nigeria. And a good place to start the economic development journey is to regionalise the economy so that each region, or state, can exploit the resources within its borders instead of assigning that role to the Federal Government or the Government of the Federation.

This may involve a constitutional amendment that will move Item 39 of the 1999 Constitution’s Federal Exclusive List that assigns “Mines and minerals, including oil fields, oil mining… and natural gas,” to the Concurrent Legislative List.

Section 25 of the Federal Exclusive Legislative List of the 1960 Independence Constitution is of no use, because, like the 1999 Constitution, it also places “Mines and minerals, including oil fields, oil mining… and natural gas,” under the Federal Government.

It may be more expedient to borrow from Item 10 of the Exclusive Legislative List of Nigeria’s 1963 Republican Constitution that says, “customs and excise duties, including export duties”, shall belong to the Federal Government, but is silent on the exploitation of mineral resources.

Constitutional experts often argue that whenever the constitution of a federation is silent on any item of national concern, that matter should be regarded as a residual matter that is automatically left to the discretion of the regions to administer without interference from the federal or central government.

The offensive 1999 (military) Constitution should be amended to enable state governments to exploit their mineral resources, but also remit an agreed percentage of the revenue derived from such resources to the Federal Government, whose responsibilities should be customs; immigration; federal police, prisons and courts; foreign affairs; central bank; meteorological services, and the museums.

To meet these obligations and other non-contentious issues, the Federal Government should rely on its own share of federation revenue from customs and excise duties, sundry petroleum taxes, value added tax, company tax, immigration fees, stamp duty fees, remits from the sovereign wealth account, and other revenues receivable.

The Federal Government should be responsible for providing roads, railways, airports, and seaports, which should also be on the Concurrent Legislative List, so state governments can augment the Federal Government’s efforts, as the Lagos State Government is running the Lagos Metroline.

State governments should be required to provide services like forest guards, state police, prisons and courts, hospitals, schools and other social services from revenues derived from licensing and exploiting their mineral resources and other internally generated revenues.

The private sector should concentrate on producing strategic items, such as electricity, water, and petroleum products, in addition to traditional consumer items, such as food, pharmaceutical products, and other Fast Moving Consumer Goods.

The idea is to reduce the size of the Federal Government and devolve more policy initiatives and economic powers to the states or regions, so development can be faster and more widespread.

This is an indirect way of rewriting the revenue allocation formula to favour the state governments and private investors, instead of concentrating powers in the central government that is inefficient and ineffective as an agency of national development.

It will enable each state or region to grow and expand its economy at its own pace, and none will feel that its resources are diverted to other parts of the country, while its own economic development hands are held tightly behind its back.

Of course, these suggestions may not conform to Nigeria’s conventional budget-making template that places too much money in the hands of the Federal Government and, thereby, impoverishes the states or regions and the citizens who should ordinarily enjoy the benefits of the resources underneath their soil.

The 2027 Finance Act or budget should democratize access to Nigeria’s commonwealth so that every Nigerian citizen can escape the grinding poverty that appears to be the purpose of the Leviathan masquerading as the Nigerian state.

The Minister of Finance and Co-ordinating Minister of the Economy, and the Minister of Budget and Economic Planning may think the suggestions provided here are not exactly what they were thinking, but they should please pay closer attention to the logic that may put Nigeria’s economy in automatic pilot mode.

X:@lekansote1, lekansote.com