8 July 2013

Nigeria: The Deepening Budget Crisis


The nation is currently witnessing a budget crisis; no thanks to the long-drawn battle between the executive and the legislature over the 2013 budget amendment. Omololu Ogunmade explores the various phases of the crisis that the 2013 budget has undergone and outlines the underlying issues and effects the situation is having on the nation.

The Preamble

In the annals of Nigeria's fiscal years, 2013 will not be forgotten in a hurry. It is to say the least, one year that witnessed a dramatic irony. Dramatic irony, because the year ordinarily ought to set the pace both in budget appropriation and implementation being the first time that the Appropriation Bill was passed ahead of the new fiscal year. But despite this, the year appears to be the worst in terms of budgeting experience and implementation as barely five months to the end of the year the implementation of the budget has been mired in a crisis.

Till date, ministries, departments and agencies (MDAs) are still waiting for the release of funds for the execution of projects for which money has been appropriated in the 2013 budget. Only recently, Minister of Power, Professor Chinedu Nebo, accompanied by the Minister of State for Power, Mrs. Zainab Kuchi, sought the help of the Senate Committee on Power for the release of first quarter allocation to the ministry to enable them carry out the responsibilities imposed on them.

Nebo practically told the committee that the ministry was handicapped by the non-availability of funds to execute necessary projects, saying it has had to depend on last year's allocations to run the challenging power sector. According to him, even though a little sum of money had been budgeted for operations in the sector in the first quarter of the year, nothing had been released to the ministry.

The experience is undoubtedly the same in every MDA and for many hapless Nigerians; it has remained a mystery waiting to be unravelled. This is moreso that almost eight months after the budget was passed, the government is still waiting for another document that will guarantee its full implementation, thereby holding the nation hostage. This is no thanks to a costly game by both the executive and the legislature. Hence, it looks incredible that in July when the government ought to be tidying up the preparation of a new budget for the next fiscal year, it is still confused on how to implement the appropriation for the current year.

The Genesis of the Face-off

On December 20, 2012, the National Assembly made history when it passed the N4.987 trillion 2013 appropriation bill presented by President Goodluck Jonathan in September last year. Jonathan had proposed N4.92 trillion but the legislature jacked up the figure to N N4.987 trillion. Both the early presentation and attendant passage were hailed by the general public which looked up to a robust and more beneficial fiscal year.

But signs that the early passage would turn out a bomb wrapped in aesthetic parcel began to surface when it was discovered that two weeks after the passage, the budget had not been transmitted to the president by the federal parliament. However, the curiosity of the Nigeria media, championed by THISDAY, forced lawmakers to eventually transmit the budget to the executive on January 15, 2013, almost a month after its passage. The National Assembly blamed the delay in the passage on what it described as purely mechanical and bureaucratic problems.

Whereas reliefs had swept through many that the implementation of the budget would soon begin following the transmission of the bill to the president preparatory to his giving his assent, the end of that phase only heralded yet another arduous chapter of the budget story as it soon became public knowledge that the president would not assent to the bill because the National Assembly had allegedly introduced into the budget almost additional N100 billion.

This sum was aside the N150 billion appropriated for the operations of the legislature in the budget. This discovery did not go down well with the executive which felt the huge sum would not make the budget implementable. But when confronted with the question on the additional budget, the lawmakers denied it and described those who raised the alarm as mere attention seekers. The alarm was first raised by an unnamed presidential aide in far away Switzerland who blamed the legislature for Jonathan's inability to sign the budget. There was a claim at the time that the National Assembly opted to raise the budget following the executive's decision not to include constituency projects in the budget as it had been the case in the past.

Therefore, the controversial N100 billion which allegedly delayed the presidential assent to the bill was earmarked for the implementation of projects in various constituencies of the lawmakers. It was alleged that the decision of the executive to omit appropriation for constituency projects in the 2013 budget was the deliberate decision of the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, who reportedly felt that after a whopping N150 billion had already been earmarked for the running of the legislative institution in the year, budgeting for their various constituencies again would be a misplaced priority.

Thus, despite the required statutory 30 days within which the president must sign the budget as stipulated in the 1999 Constitution, Okonjo-Iweala told the nation several days after the transmission that signing the budget during the time was not feasible because there were grey areas that needed to be thrashed out between the executive and the legislature.

Against this background, there was a parley between the executive and principal officers of the National Assembly where it was said that the president should sign the budget first while he could propose amendments to it in order to address the identified grey areas. It was on this premise that Jonathan signed the budget on February 26. The Amendment Debacle Assenting to the bill however ended the second phase of the budget squabble, leading the nation into yet the third and toughest chapter which has till date presented no hope of resolution. Indeed, on March 14, Jonathan submitted the 2013 budget amendment proposal to the National Assembly and urged the lawmakers to treat the proposal with urgency.

In the amendment bill, the executive made slight addition to the earlier budget passed by the National Assembly last year. It replaced the earlier N4,987,220,425,601 contained in 2013 Appropriation Act with N4,987,382,196,690 in the (Amendment) Bill 2013. Jonathan also sought to appropriate a total sum of N2.4trillion as recurrent expenditure as against the N2.3trillion passed on December 20, 2012. The president further sought approval for N1.588 trillion as capital expenditure as against the N1.6 trillion approved by the parliament last year.

Of the total N4.987 trillion in the new proposal, N388 billion was earmarked for statutory transfers while N591.7 billion was meant for debt servicing. Jonathan also made references to certain clauses inserted into the budget by the National Assembly which in his own opinion transferred the powers of the executive to the legislature and therefore sought correction to them.

Among his concerns in the amendment was the zero appropriation for the Securities and Exchange Commission (SEC) as well as a clause in the Act that prohibits the commission from spending any revenue it generates. He described the move as dangerous and capable of crippling the operations of SEC. He also rejected clauses in the budget which ordered the executive to brief the legislature every quarterly on the budget performance.

But since March 14, when the president proposed fresh amendments to the budget, the National Assembly has not hidden its determination to play around the budget until the year eventually comes to an end. While both the Senate and the House of Representatives had at different times, suspended debates on the bill; the House finally showed its hand last week, when it formally threw out the amendment proposal 24 hours after Jonathan returned the State of the Nation Address Bill passed by the National Assembly on May 13.

In throwing out the bill, the House claimed that presenting amendments to budget after passage was unconstitutional and hence it would be unconstitutional for them to consider and pass the bill. Both Jonathan and Okonjo-Iweala cried foul, saying the action could be detrimental to the nation's interest.

In doing this, members of the House put into consideration a point of order raised on June 5 by Hon. Yakubu Dogara where he said it would be unlawful for the House to consider the proposal. Following the point of order, the Speaker, Hon. Aminu Tambuwal, asked the House Committee on Rules and Business to examine the issues contained in Dogara's point of order and report back to the House. While presenting its report to the House on June 26, Chairman of the Rules and Business Committee, Hon. AlbertSam-Tsokwa, noted that though the Appropriation Act could be amended, the way the executive prepared the amendment bill fell short of the nation's extant laws.

He argued that instead of the amendment bill, Jonathan's purpose could have better been served by a supplementary budget. "The purported amendment bill, a five-clause bill, is completely and totally silent on what and which sections of the 2013 Appropriation Act it seeks to amend or repeal or enact. So, it was silent on the schedules or what aspects to the 2013 Act it seeks to amend or repeal. Honourable members may wish to note that while the 2013 Appropriation Act appropriates the total sum of N4,987,220,425,601 for the 2013 fiscal year, the purported 2013 Appropriation Act (Amendment) Bill 2013 seeks to appropriate a total sum of the N4,987,382,196,690.

"Clearly, what the Amendment Bill 2013 seeks to appropriate is more than what was appropriated for the 2013 fiscal year in the 2013 Appropriation Act. That is to say, the executive would appear to be seeking additional funds. Obviously, this cannot be achieved through an amendment bill. The answer lies in a supplementary appropriation under Section 81 (4) of the constitution. At best, the Appropriation Act 2013 Amendment Bill of the president, for want of a better description or expression, is in the words of Hon. Dogara a '2013 Appropriation Bill N0 2,' an alien, a stranger or indeed and interloper in our constitutional arrangement," Sam-Tsokwa submitted.

As though the submission of Sam-Tsokwa fulfilled the yearning of the entire House, members opted to breach parliamentary rule which ordinarily prohibits clapping in the chamber or committee rooms as the presentation was accompanied by a resounding applause. And with the submission apparently securing the overwhelming support of members, Tambuwal hit the gavel in acknowledgement of members' desire and forthwith, the bill was thrown out.

Enters the Newest Amendment

After the rejection of the amendment bill, Jonathan prepared a fresh amendment, which Senate's spokesman, Enyinnaya Abaribe, described as a more voluminous document than even the original 2013 Appropriation Bill itself. Whereas, the president had been diplomatic in his earlier amendment proposal, he opted to go to the specifics this time with a view to letting the entire public know what the issues really are as far as the 2013 Appropriation is concerned as he opted to spell out the details of the acts of the lawmakers which in his view impede any meaningful implementation of the 2013 budget unless the amendment is passed.

Without mincing words, Jonathan enumerated a number of projects designed for execution through the 2013 budget but which he insisted could not be implemented because the lawmakers had diverted original appropriations to places of their own interests. He therefore appealed for their co-operation by restoring such funds so that such projects could be implemented. In his avowed commitment to appeal to the lawmakers to consider the amendment, Jonathan opted to label some projects with such words as "critical", "important", and others in the perceived order of importance.

In a letter addressed to both Tambuwal, and the Senate President, Senator David Mark, dated June 26 and entitled: "Re: 2013 Amendment Budget," Jonathan said: "You will recall that I had transmitted the 2013 Amendment Budget proposal to the National Assembly on 14th March, 2013.

However, following further consultations, I am forwarding a new version of the categorised 2013 Amendment Budget proposal indicating changes proposed across the expenditure categories. The capital projects have now been designated as follows: 'critical' is designated as (i); 'important' is designated as (ii) and 'others' designated as (iii)." The president then proceeded to list some capital projects whose allocations he said were reduced by the lawmakers and therefore appealed to them to restore the original appropriations "so as to promote national development." Such projects included major roads such as the Lokoja - Abuja highway for instance, whose appropriation, he said, was reduced by N4 billion, thus implying that unless such money is restored, the Abuja -Lokoja highway, which often records fatal accidents resulting in loss of many lives, will remain a death trap for a long while.

In the same vein, Jonathan listed Kano-Maiduguri Road whose appropriation he said was reduced by the National Assembly by N3.5 billion; dualisation of Ibadan-Ilorin Section 2 reduced by N5.5 billion; rehabilitation of Jebba bridge reduced by N1.25 billion; rehabilitation of burnt marine bridge and Iddo bridge reduced by N1 billion; special intervention fund for emergency roads and bridges washout across the country reduced by N6.28 billion as well as the dualisation of Obajana junction to Benin reduced by N4 billion, among others.

Also listed by the president was millennium development goals/ Human Immunodeficiency Virus (HIV)/Acquired Immune Deficiency Syndrome (AIDS) ARV drugs allocation reduced by N1 billion; routine immunisation vaccines reduced by N1.75 billion; malaria programme procurement and distribution of insecticides reduced by N0.8b; payment of pledge for onchocerciasis recertification cut by N0.12b; National Trauma Centre, Abuja reduced by N0.1 billion.

On power, Jonathan also disclosed that the National Assembly cut N16.3 billion from the votes earmarked for various power projects, including the 215 mega watts dual fired plant, which he said was reduced by N2.25 billion. Other cuts he mentioned were second Kaduna-Kano 33kv DC lines reduced by N1.5 billion; Gombe-Yola-Jalingo 330KV SC line reduced by N0.6b; Maiduguri 330/132 KV sub-station reduced by N0.3b; Kaduna-Jos 330 KV DC reduced by N0.5 billion and Omotsho-Epe-Ajah 330 KV DC line reduced by N0.8 billion.

On rail transportation, Jonathan informed the legislature of the reduction by N1.4 billion construction of Abuja-Kaduna rail; Jebba-Kano rail line rehabilitation by N0.5b; procurement and rehabilitation of wagons/locomotives reduced by N1 billion and insurance of locomotives reduced by N0.2b.

On education, he said allocations to various projects were reduced to the tune of N5.64, including allocations to national library project which was cut by N2 billion, while on Subsidy Reinvestment Programme (SURE-P), Jonathan said: "We all appreciate the fact that unemployment is one of our major concerns in this country today. Considering the gravity of the situation, I would like to bring up the issue of the budgetary allocation to the community services, women and youth employment programme under the SURE-P. "Against our proposal of N27 billion, the National Assembly allocated N9 billion. This cut will have adverse effect of severely undermining our capacity to create the jobs needed for our teeming unemployed youths, women and physically challenged citizens. In this regard, I crave your co-operation to restore the SURE-P budget.

"You will further recall that the personnel cost was cut across all MDAS which will make it difficult to meet government's obligations to its workers. I therefore seek your kind understanding for the restoration of the said cuts in order to maintain industrial harmony. It is my hope that this submission will help the work of the Senate to consider and pass 2013 amendment budget proposal expeditiously," Jonathan pleaded.

Now, the Crux of the Matter

With Jonathan's last letter to the leaders of the National Assembly, he had put the legislature on the spot by the fresh revelation contained in the letter which gave clear insight into the budget controversy.

The face-off between the two arms of government over the budget has been generating reactions from members of the public. This reporter listened to one of the programmes on a broadcasting station where people reacted to these disclosures with annoyance. Speakers and callers on the programme said the lawmakers should have rather used their positions to address problems on roads, power, education, transport and unemployment instead of reducing their appropriations.

Some individuals even submitted that if the lawmakers travel by road and witness the tragedy and agony that befall Nigerians on a daily basis, on the Abuja-Lokoja highway for instance, they would have increased its appropriation instead of diverting it. Others also said the lawmakers ought to be bothered that there is no standard road leading to the federal capital where they operate.

But in defence of its action, the National Assembly said there was nowhere it is done that budget would be returned to the executive without tinkering with it. This came even as Okonjo-Iweala cried out last week that unless the National Assembly promptly passed the amendment proposals, payment of workers' salaries would be difficult as from September. This notwithstanding, Abaribe had said the amendment bill was not part of Senate's agenda now even though the House had said it might reconsider the fresh version sent again by the president.

According to Abaribe, before the National Assembly can have time to consider the amendment, it will not be earlier than September when it will return from its long vacation which will commence in August. Nevertheless, what the face-off between the executive and the legislature on the 2013 appropriation portends, according to watchers, is that the year 2013 may end up a wasted fiscal year with the total sum contained in the signed budget not be used to uplift the well-being of the people.

This is more so that such monies are now withheld under the guise that appropriations in the budget are not implementable unless the amendment is passed. But the legislature holds the opinion that with the already signed budget, the nation can drive growth across the country unimpeded.

Already, the current budget stalemate has begun to take its tolls on various programmes and projects across the country. For instance, the proposed realisation of 10,000 mega watts of power by the executive in December this year has now been postponed as Nebo had in May announced that the vision could not be achieved earlier than December 2014.

There are also notions that if both the executive and the legislature fail to shed their egos and put the interest of the nation that they were elected to serve into consideration by mutually doing what is right on the budget, it would be an affront to the people for the executive to later come up with another budget for the year 2014 if it doesn't implement the 2013 budget.

Also, there are views that it would be unpatriotic of the legislature to later roll up its sleeves to legislate on a new budget if fails to play its role well on the 2013 budget. The vast majority of opinions on the matter now are that the two arms of government are sitting on a keg of gun powder by holding the nation to ransom and failing in their statutory responsibilities to the nation.

This notion became popular as reports last week tied the legislature's refusal to consider the appropriation to the alleged refusal by Okonjo-Iweala to release N100 billion constituency projects' funds to members. The matter appears to have gone out of hands now to the extent that a national affair is allegedly being handled as personal matters as reports had said government had planned to use the delay in releasing the constituency funds as a weapon to whip the lawmakers into action.

On the other hand, the legislature is said to have exploited the delay in the release of constituency funds as a weapon to hold down the amendment bill until constituency funds are released. This has literally become the case of "do me, I do you" while the nation groans under the pains of the non-implementation of the budget and virtually everything may soon be at a standstill if the trend continues. Besides, this unhealthy development in experts' perspectives will further take its toll on the next fiscal year as projects for the current fiscal year will be pushed into next year while fresh funds will be appropriated.

By and large, it is noted that given this confusion, the already worsened infrastructural problems will be aggravated while the economy may begin to witness stunted growth. How long shall this game last? This is now one question seeking an answer.

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