This Day (Lagos)

16 December 2012

Nigeria: Budget 2012 - House Moves to Assert Oversight Rights

In the past couple of weeks, the House of Representatives has been a beehive of activities stemming from its bid to oversight the 2012 budget and conduct due diligence on the 2013 budget proposals. Onwuka Nzeshi reviews some of the activities and points the way forward

Barely one week to the end of the 2012 fiscal calendar, the House of Representatives is battling to assert its authority in terms of appropriation and oversight on the national budget. Indeed, it is doing so on several fronts and under various guises. This has also triggered the question: What exactly is the House up to? Why kick at every stone and dig at every point like someone who lost a priceless possession?

Budget Audit

At its plenary last Wednesday, the lower chamber of the National Assembly directed its Committees on Finance and Appropriation to compile and present a comprehensive report on the revenues, expenditures, and any unforeseen savings in the implementation of the 2012 budget.

The report which is expected to be submitted within one week is meant to provide a solution to the issue of the outstanding capital releases in the 2012 Appropriation Act and ensure the full implementation of the budget.

The resolution to conduct a fresh audit into the budget came on the heels of a motion sponsored by Hon. Abdulrahman Terab in which the lawmaker expressed concern that the revenue receipts so far has been higher than what was projected for the 2012 fiscal regime while the Ministries Departments and Agencies have not received funding commensurate to this revenue profile.

Terab alleged that inthe fourth quarter, capital releases made to MDAs has been inadequate as only about thirty per cent ( 30%) of the allocated value were actually remitted to the MDAs.

The lawmaker also said that various sums of money saved from recovery exercises, non oil excess revenues, and the 2012 unspent revenues were neither captured in the 2013 appropriation bill nor were they provided as opening balances in the 2013 expenditure accounts.

He expressed fears that most if not all capital projects captured only in the 2012 Appropriation Act will soon become abandoned as the 2012 budget winds down in the next two weeks.

" This will further contribute to the huge pile of abandoned projects and increase our infrastructure deficit which is almost insurmountable. This also means that our 2012 growth projections will be completely eroded and difficult to justify.

"I am further worried that if this house does not come to the rescue of the 2012 budget, the dream of Nigeria becoming one of the 20 great economies by the year 2020 can no longer be achievable because consistent missing of target plans only translates to failure to achieve the desired results,"he said.

Terab said that while the annual budget provides for the planning and equitable allocation of resources for purposes of development, it is the implementation of such plan as proposed, that ensures the actual achievement of the goals of the budget in any fiscal year.

The national budget, Terab said, would remain a significant instrument for meeting the social and economic needs of the people and must not be toyed with if it must achieve its goal.

"When the national budget is well formulated and effectively implemented, it will lead to the achievement of development objectives, such as strong economic growth, equitable distribution of income and wealth creation, poverty reduction, reduced unemployment rate, and maintain internal and external balance for economic stability

"We are aware that Nigeria has an infrastructure deficit of over N4trn (four trillion naira) and a very high unemployment rate of over seventy per cent ( 70%) but one is concerned that Nigeria's Budget Based Growth Indices have in the recent past laid more emphasis on foreign influenced economic models based on the Gross National Product, rather than Human Development Index and Infrastructure Growth Index which impact more on the internal factors that reduce poverty, create jobs and encourage industrial growth,"he said.

Terab urged the parliament to henceforth calculate budget achievements on actual facts and figures in the real sector and not on some nebulous indices churned out by government agencies.

Revenue Remittance

The House had, penultimate week, commenced an interface with the various revenue generating agencies in the country with a view to ascertaining their status in terms of revenue remittance to the public coffers. A similar investigation has been conducted in the past but produced little or no results.

Apparently not too hopeful about the outcome of the current exercise, that House has also proposed the creation of a special sub-head in the revenue framework to capture the gross earnings of all revenue agencies instead of the current situation where they generated revenue spent same and remitted only the "operating surplus" to either the Federation Account or Consolidated Revenue of the Federation.

It has also commenced a comprehensive investigation into the operations of government agencies to ascertain the quantum of revenue they generate annually and how much they have remitted to government coffers since 2009.

Supplementary Budget

But while they were still attacking the budget from these flanks,

President Goodluck. Jonathan presented a supplementary budget targeted at of-setting arrears of fuel subsidy.

In a letter dated December 5, 2012, Jonathan requested the House to approve an additional sum of N161,617,364,911 for the settlement of fuel subsidy liabilities.

The letter read in parts:

"I wish to intimate the Honourable House of Representatives of the fact that, following the forensic audit carried out the provision for fuel subsidy in the 2012 Budget was underestimated.

As at now, the sum of N880,264,243,683.61 has been paid out, leaving a balance of N7,735,756,316.39.

"In order to accommodate the outstanding arrears resulting from the forensic audit exercise and the remaining period of the year 2012, an additional sum of N161,617,364,911 over and above what was programmed to the 2012 framework is required.

"Given the need to maintain a steady flow of petroleum products, especially to the run-up to the festive season, it is my hope that the Honourable Members will kindly accord this request their traditional Expeditious consideration and approval."

Suspended Debate

The debate on the N162 Billion Supplementary Appropriation Bill was however stalled following the stiff opposition mounted against it by some lawmakers.

Although, House Leader, Mulikat Akande-Adeola laid a good foundation for the bill, some opponents of the bill said they found it difficult to support the bill because the executive arm of government had not provided detailed information on how the initial N888billion appropriated for fuel subsidy in the 2012 budget was spent. Some lawmakers expressed doubts if the funds earlier appropriated for fuel subsidy was judiciously applied.

Others claimed that to grant the supplementary budget speedy passage would amount to succumbing to the blackmail of the so called cabal in the fuel importation business.

When the lawmakers eventually gave their provisional approval to the supplementary appropriation proposal the following day, it was with much reluctance.

The supplementary budget passed the second reading stage last Thursday it was with a caveat.

It was not just referred to the relevant Committees Appropriation for further legislative work, the lawmakers lawmakers insisted that the forensic audit carried out by the executive arm must be presented before the House for scrutiny.

In the course of the debate preceding the second reading of the money bill some lawmakers had raised several questions on the forensic audit conducted by the presidency which informed the extra budgetary proposal.

The lawmakers accused Jonathan of attempting to blackmail them by sending the supplementary late in the year and seeking a speedy approval for the proposal.

Even after the heads of three relevant committees of the House had thrown their weight behind the bill and canvassed its quick passage, the final resolution showed that the lower chamber was not ready to let go yet.

In a ruling at the end of the debate, Speaker of the House, Hon. Aminu Tambuwal said that the only way out was for the Standing Committees of the House to learn and apply better budget tracking techniques.

He admitted that while it was right to raise issues about the budget and demand details of the forensic report, such matters could only be resolved when the supplementary budget proposal passes the second reading stage and gets to the relevant committees.

"The gamut of the entire debates serve as a wake up call to our committees on the issues of oversight. We need to do more of budget tracking and ensure that we are not been taken for a ride by our executive counter-part.

" I believe that fundamental issues have been raised; we need to be more discerning in whatever position we take. We have the window of opportunity; we have the expectations of the public and in any case all of us are aware that those in the executive never wanted this fuel subsidy.

That is however not to say we should allow Nigerians or our country to be drained by those who believed that they can use the opportunity of fuel subsidy to be carting away money,"Tambuwal said.

Indeed, these final words are indications that the House had approached the entire budget exercise with the suspicion that the executive might not be right and transparent in its dealings.

Some political analysts believe that it is high time the House did away with such attitudes which often become counter-productive. There are more gains in working together and pulling the cart from a common end.

In fact while the House was busy conducting its countless probes, it created its own suspicions.

The impression they created was that the motives behind the probes were less than noble.

When they harrassed the MDAs and threatened to arrest every one who failed to appear before them, the impression they created was that of a public institution flaunting powers and trying to intimidate the people.

Adhering to the principle of checks and balances is ideal and recommended in a democracy but perpetual suspicion of the other arms of government is unhealthy and destructive as it conveys the wrong impressions.

In order to avoid dissipating energy in all directions and the attendant suspicions it creates, the House needs to amend those laws that have placed some MDAS above the Constitution, conduct diligent and transparent budget tracking and carry out its other oversight responsibilities with patriotism and less razmataz.

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