The secrecy surrounding the "signing" into law of the 2013 Appropriation Act by President Goodluck Jonathan is sparking concerns across the country.
Analysts believe that, technically, no budget has been signed since some conditions were attached and the document sent back to the National Assembly for alteration.
That the Federal Ministry of Finance also failed to provide a breakdown of the "signed" budget also points to the fact that the "signing" was merely cosmetic. The president signed the budget in secret, defying the known tradition of previous years when it was done in full public glare, fuelling suspicion that the budget may not have been signed.
The suspicion is further fuelled by the failure of the finance ministry to make available a breakdown of the signed budget unlike in the past when details of the signed budget were readily available to allow for public analysis.
According to Wale Abe, chief executive officer of the Financial Market Dealers Association of Nigeria (FMDA), signing a public document like the budget of the country behind closed door means that the budget has not been signed.
Okechukwu Unegbu, former president of the Chartered Institute of Bankers of Nigeria (CIBN), said that, as it were, there is no way anybody can implement such a budget.
Samir Gadio, a London-based emerging markets strategist with Standard Bank, said the final shape of the 2013 Appropriation Bill will hopefully be made public in the near future.
LEADERSHIP gathered that the decision to keep sealed lips over the breakdown is not unconnected to the grey areas identified in the budget approved by the National Assembly (NASS).
An inside source at the Ministry of Finance told LEADERSHIP that the executive has decided not to accept the major alterations made to the 2013 budget by the NASS. Among the areas of disagreement between the executive and the legislature are the inclusion of constituency projects in the budget and the provision of zero budget for the Securities and Exchange Commission (SEC).
Accordingly, it has decided not to make the breakdown public until the differences are sorted out.
The president signed the budget in the understanding that that the Act is to be further referred to the National Assembly for amendment to accommodate some of the hitherto grey areas that the two parties had reached consensus on.
While President Jonathan sent a budget of N4.92 trillion to the National Assembly for approval last October, the National Assembly returned an approved budget of N4.98 trillion, that is, N63 billion higher.
Sketchy highlights of the signed budget gleaned by LEADERSHIP indicated that the National Assembly had increased statutory transfers from N380.02 billion proposed by the executive to N338.97 billion. Also the capital expenditure was jacked up from N1.54
trillion to N1.62 trillion while the recurrent expenditure was reduced from N2.412 trillion proposed by the executive to N2.38 trillion, indicating a difference of N26 billion. Only the provision for debt service was left untouched at N591.76 billion.
Gadio said, at this stage, it appears that the National Assembly has been successful in raising the oil price benchmark to USD79 per barrel versus USD75 per barrel in the draft put forth by the finance ministry. This is consistent with the multi-year stance of parliament which has typically sought to impose a more expansionary fiscal stance than that proposed by the government.
"There are few countries in Africa where parliament systematically pushes spending up, even though it is controlled by the same party that won the presidential contest," said Gadio.
In this context, one can understand why the MPC of the CBN recommended creating an independent body that would set up the oil price benchmark based on tangible economic fundamentals and oil price projections.
An upward trend in the oil price benchmark in coming years would be problematic not only because the oil price is unlikely to increase sizeably from current levels, but also given that the effective fiscal breakeven point has generally been much higher as illustrated by the modest accumulation of Excess Crude Account (ECA) proceeds (only USD9.2 billion [3.5 per cent/GDP]).
In solving the benchmark puzzle, Unegbu wondered how a board which will not implement the budget of a company force on the managing director what the budget midget must be.
Abe said the only thing the National Assembly could do is to ensure close monitoring of budget implementation.
Gadio went further to say that the reality is that the budget of the federal government is only a part of the fiscal puzzle in Nigeria.
What really matters is the federally consolidated fiscal position at the three-tier level (including the budget of the federal government and states) that also factors in above-the-line expenditure and the balance of the excess crude account.
This aggregate approach would be in line with international best practice since one would be able to compare Nigeria's overall revenue as a country (rather than federal government revenue) with total public expenditure across the board.
"At this stage, only the IMF attempts to calculate this ratio (-0.4 per cent/GDP in 2012; expected 2.8 per cent/GDP in 2013), but the Nigerian authorities have yet to provide similar estimates".
"Even in the absence of precise and official federally consolidated fiscal figures, we suspect Nigeria's fiscal position is balanced at best despite the elevated oil price as illustrated by the marginal proceeds of the excess crude account.
Indeed, the excess crude account is, in a sense, the residual of the fiscal equation in Nigeria and a key indicator to monitor in this regard", said Gadio.
Meanwhile, the presidency has declared that, contrary to the claims of the opposition Action Congress of Nigeria, the nation's economy is not in danger of collapse as all globally recognised indices indicate that the Nigerian economy is stable and on an upward beat.
A statement signed by the senior special assistant to the president on public affairs, Dr Doyin Okupe, described the claim by the ACN as lacking in substance and runs contrary to the verdicts of reputable international rating agencies who have consistently upgraded the country's economic ratings in the last one and a half years.
According to the presidency spokesman, contrary to the claim of the ACN that the cost of producing a barrel of oil had "skyrocketed" to 35 dollars in 2012 from 4 dollars in 2002, the actual cost of production stands at approximately 17 dollars per barrel. The cost of oil production per barrel had never risen as high as the opposition claims.
Even at the height of restiveness in the Niger Delta area and its consequential effect on the upstream oil sector, the per barrel cost of oil production in Nigeria never rose above 18 dollars.
When compared with a sum of between 50 and 70 dollars per barrel spent on production of shale oil by the United States of America, the cost of producing oil in Nigeria, which is 17 dollars per barrel, as well as a prevailing sale price of over 100 dollars per barrel does not support the alarming claim of the opposition, he said.
The statement added that the second leg upon which the ACN based its wrong assertions is similarly laden with deceptive undertones. "For a fact, there are incidents of crude oil theft which had existed for several decades before this administration came on board. However, the truth is that this is currently being tackled through proactive steps by the government.
The opposition is most probably aware of the fact that President Jonathan recently secured the cooperation of the prime minister of the United Kingdom and the French president on measures to prevent refineries in Europe from buying crude oil stolen from Nigeria.
"Similarly, the Jonathan administration has provided more and better surveillance boats for the Nigerian Navy to enhance patrol of our coastal waters. This has resulted in arrest of several vessels engaged in oil theft and these were well reported in the Nigerian print and electronic media."
The presidency drew the attention of the opposition political party to the Petroleum Industry Bill currently before the National Assembly which, it said, was conceived by President Jonathan to provide for best practice processes for acreage availability, bidding and awards and therefore address the problems of dwindling oil and gas exploratory opportunities and corruption, among other problems in the sector.
It added that the need to diversify the Nigerian economy and reduce dependence on oil has also been the driving force of the federal government's massive investment in agriculture in a manner unprecedented in the annals of Nigeria. "In the year 2012 alone, the agricultural sector accounted for over 75 per cent of all non-oil export, the highest output in 25 years."
While agreeing that there is indeed a need to reduce the cost of governance at all tiers of government in Nigeria, the statement explains that that President Jonathan has shown practical commitment through a reduction in recurrent expenditure from 74 per cent in 2011 to 71 per cent in 2012 and 68 per cent in the 2013 budget, adding that the medium-term target is to reach 60 per cent recurrent expenditure.
The statement said it is of concern that a political party, individual or any organisation worth its salt would choose to ignore the positive rating of the Nigerian economy by reputable international rating agencies in the last one and a half years of the Jonathan administration but rather conjure imaginary figures to make wild claims.
"One wonders if the ACN would have ignored the ratings by Fitch, Standard & Poor's, Moody's and JP Morgan if those bodies had turned in a negative verdict on the Nigerian economy.
The only conclusion one can draw from this is that the opposition has once again chosen the myopic and jaundiced path of public policy analysis rather that base its assessment on verifiable, objective indices.
Unfortunately, a matter as sensitive as a nation's economy ought not to be subjected to this fashion of blind politicking."
While assuring Nigerians that the federal government remains committed to implementing sound economic policies and development of the nation's infrastructure, the presidency urged politicians to exhibit statesmanship in addressing issues of critical nature rather than seeking to score cheap points in a desperate manner.