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Nigeria: Crisis Looms Over Budget

Emmanuel Aziken

9 December 2007

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Abuja — RESIDENT Umaru Musa Yar'Adua could be heading towards his first major conflict with the National Assembly as legislators brace up to radically alter the spending proposals in the 2008 Budget. The legislators, Sunday Vanguard gathered, are bracing to increase the N1.9 trillion spending plan for 2008 through an increase of the benchmark for oil receipts in a way that would accommodate more revenue into the Federal Government purse next year.

Yar'Adua while presenting the Federal Government spending proposal for 2008, had pegged oil receipt at $53.83 per barrel of oil. However, several senators, including elements in the Senate leadership, have without exception affirmed that the benchmark proposed by the administration was no longer sustainable with the legislators bent to increase it in order to provide more naira for the execution of capital projects.

The Senate Committee on Appropriation, Sunday Vanguard learnt, met at the weekend with the issue said to be on the agenda. As at press time, no new figure had been agreed on with many legislators proposing a new benchmark of between $60 and $65 per barrel for oil receipts in fiscal year 2008. Among the law-makers supporting an upward increase in the oil price benchmark are senators Ahmad Lawan (ANPP, Yobe North), James Manager (PDP, Delta South), Sola Akinyede (PDP, Ekiti South), Nkechi Nwogu (PDP, Abia Central), Enyinniya Abaribe (PDP, Abia South), Alloysius Utuk (PDP, Akwa Ibom), Ikechukwu Obiorah (PDP, Anambra South) and Bode Olajumoke (PDP, Ondo).

The move by the legislators is coming against the background of increasing questions on the estimates proposed by the administration. Many of the figures, some legislators complained, have been either inflated or in some cases irrelevant. Support for the increase in the benchmark was to have followed serious misgivings by senators that a substantial section of the budget is devoted to overheads and little left for capital development. The move to raise the benchmark is coming against mutterings by legislators of the "envelope" or budget ceiling given by the Federal Ministry of Finance above which they do not expect the National Assembly to raise the spending of the government agencies.

While many senators have vowed to ignore the envelope in expression of their legislative right to determine spending proposals for the administration, one senator was, at the weekend, however, calling for caution. The senator, who spoke on the condition of anonymity in order not to be seen as openly opposing his colleagues, said the budget ceiling was needed to keep the economy from overheating towards inflation. Abaribe, in supporting a new benchmark of $65 per barrel, was optimistic that oil prices would not fall below $80 per barrel next year as he suggested that the additional funds be channelled towards capital projects such as roads and power.

Manager was particular about making provisions for the East-West road which transverses the Niger Delta states. He regretted that no provision was made for the rehabilitation of the road in Yar'Adua's 2008 financial proposals. The rehabilitation of the road was awarded to three different contractors for more than N200 billion by the Obasanjo administration. "It is very, very likely that the thing will be increased. Because in the first place it is most unlikely that the price of crude oil in the international market will come below $90," the senator said.

He predicated the increase on the fact of the administration's rigid respect for the rule of law as he envisaged that there would be no provision for excess crude account as maintained by the immediate past administration. "We don't have anything like excess crude account in the Constitution and now that so many projects are under-funded definitely by the grace of God, the benchmark must be increased." Nwogu, canvassing increase of the benchmark to $65, said: "I am in support of an increase to at least 65 dollars per barrel so that the money realised could be used to push up the paltry amount put on the capital projects."

Obiorah in supporting an increase of the benchmark to $65 laced in his quest for what he described as the redressing of the infrastructural marginalisation of the southeast states. "I am of the view that the benchmark should be increased to $65 to afford the government the opportunity to increase its investment in capital projects. One as a way of availing Nigerians of much needed infrastructure and secondly, as a way of reducing unemployment and poverty through increased scope of employment by increased capital projects. Most importantly, this will untie the hand of the President by giving him the room to increase infrastructure in the southeast."

Meanwhile, senators are querying what they alleged as wastages allegedly built into the spending plans. Among the areas of wastages they identified are the repeated provisions for motor vehicles which one senator complained was coming against the monetisation programme of government. Besides, the N129 million provision in the 2008 spending proposal is raising concern in the National Assembly with lawmakers expressing worry that a similar provision of N4 billion for communication equipment in the 2007 Appropriation Act of the Ministry of Defence was planted despite misgivings by the military top brass. You can imagine that a provision was made for N4 billion for communication equipment despite misgivings by the military top brass that that was not their pressing need. You can imagine our shock when we heard that the proposal was put there by the former members of the National Assembly Committee on Defence," one lawmaker told Sunday Vanguard.

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