THE TROUBLE WITH NIGERIA’S 2010 BUDGET
All is not well with Nigeria’s 2010 budget and those who should know have since been warning that it might just collapse like a pack of cards in the next couple of months.
Already, there are fears that the current financial pressure on the Federal Government may just be one of the consequences of this development, which may affect project execution in several states and local governments where Internally Generated Revenues are (IGRS) not too robust.
But there are worries that if this trend of event were to continue for long, recurrent obligations of the three tiers of government may suffer severe set back as many may find it difficult to pay staff salaries and emoluments.
Having been formulated at the peak of political and economic stalemate occasioned by the ill-health of the late President Umaru Yar’Adua, coupled with the adverse consequences of the global financial meltdown, not many are surprised that its vital components have remained deficient and highly-flawed.
Although the N4.6trillion budget has already been approved by both houses of the National Assembly and accented to by President Goodluck Jonathan about a month ago, development and budget experts within and outside government have since concluded that the assumptions that informed its formulation were overtly ambitious and misleading when evaluated against the realities of the moment.
At the moment, sentiments so far expressed by various groups are considered too weighty that even the National Assembly and the executive are now contemplating a downward review of the projection made therein.
If these adjustments are eventually adopted, the implication is that several development projects meant to kick-start the economy may just be put in the cooler at least for now pending when the situation improves.
The latest turn of events could be worrisome for administration officials most of whom may just be planning to leverage on these projects to oil their political machinery ahead of the 2011 general elections.
It was perhaps on the basis of the above dismal record that the Jonathan administration (so it seems) set out to launch the 2010 budget which was anchored on the need to create a vibrant and robust economy that would ginger the productive capacity.
Addressing the newly-reconstituted Federal Executive Council (FEC) last month President Jonathan charged the ministers to hit the ground running with their work-plans for the implementation of the budget, considering the country has lost ample time due to the political stalemate arising from Yar’Adua’s ill-health. The government had sent a proposal of N4.4 trillion to the National Assembly with a deficit of N1, 32trillion or 4.05 per cent of the Gross Domestic Product (GDP).
After due consideration of the Appropriation Bill, the National Assembly passed an appropriation of N4.4trillion with a deficit of N1.52 trillion or 4.66 per cent of GDP, which the executive council hopes to meet the targets set for Nigerians this year. Federal Government’s assumptions for the budget were based on a production capacity of 2.35million barrels per day, a benchmark price of $67 per barrel and an average exchange rate of N150 per dollar.
However while signing the budget, the president expressed the hope that if faithfully implemented, it would accelerate national development and make life a bit more comfortable for the ordinary man.
It was therefore not surprising that the Minister of State for Finance, Mr. Remi Babalola, in line with these sentiments, early this year gave an insight into how the 2010 Appropriation Bill would liberate the economy in the interest of the citizens.
While acknowledging some of the challenges that tended to frustrate previous efforts at kick-starting the economy, the government vowed it would not fail to implement the budget seen as the largest in the Nigeria’s history. It was obvious that government’s optimism was predicated on certain economic fundamentals which it considered favourable to its course at the point of articulating the document, but which have since been faulted following some of the recent developments in the domestic and international economy.
With oil prices remaining well above the 2010 budget benchmark, government was convinced the amnesty deal brokered by the late President Yar’ Adua would continue to guarantee uninterrupted seismic activities and crude oil production in the Niger Delta. It was in the light of this confidence, that government set some benchmark that many considered outrageous.
This thinking was further bolstered by the fact that the second round of banking reform which came on stream last August has reached a crucial stage where the government can easily predict the direction of the economy, considering it has been actively managing liquidity in the banking industry over the period.
Just like Mr. Babalola explained, the government had already put in motion a series of fiscal measures to further stabilize the economy.
His argument was further bolstered by the Finance Minister Olusegun Aganga, who assured the budget would not suffer any significant setback in terms of financing and implementation. According to him one ways to finance the staggering deficit was through government’s plans to raise about $500 million bonds from the international capital market, stressing that the Jonathan administration would encourage heavy spending in productive areas that will yield social and economic returns to the citizens.
Aganga said the Finance Ministry would in addition focus on managing national revenue to guard against leakages in the system, enhancing the quality of expenditure and managing excess revenue. One area of leakages that Aganga may need to take a serious look at, according to some observers, is the emoluments of members of the National Assembly and top administration officials. But notwithstanding the high hopes the government had about the budget, critics and even some of its officials have not hidden their fears about the budget and its faulty foundation.
Outside the bogus and glaring discrepancies contained in the budget observers are deeply pained that emoluments of public officers would eventually take a sizeable portion of the appropriation, leaving the rest of the citizens poorer. The claim by public officers, deficit finance and debt service commitments are too phenomenal for comfort, said a top government official who pleaded to remain anonymous.
He was concerned for instance, that the budget made provision of N200million for the rehabilitation and furnishing of the houses of 10 principal officers of the Presidency and an additional N100million for IT installations in the President’s Office.
In addition, the Senate is to spend about N15billion as sitting allowance and another N270million for retreats. In the budget, N2.077 trillion has been earmarked for capital expenditure while N1.85trillion is for recurrent expenditure. However, even as there is an indication the Federal Government have may review the basis of the budget, it has been reported that members of the National Assembly are already agitating for increase in their emoluments from N9billion to N15billion an indication that quarterly allowances for each of the 360 members from N27billion to N42billion with each member expected to part with a minimum of N150million annually.
There are also hints that Senators are also warning up to seek about N10illion each in a quarter.
It was further muted that a $915million World Bank loan recently granted the country was meant to enable her pay the huge wagebill of public officers including governors, local government officials and senior officials of government.
However, midway into the budget implementation, there are fear in that the budget may hit the rock if urgent measures are not taken to fine tune its contents against current realities. The reality is that Nigerians may soon be confronted with some of the worst economic realities of the generation as the country may end this fiscal year more broke and devastated. Only last week, speculations were rife that the National Assembly may scale down the budget by between 35-40 per cent, an indication that several critical projects may be abandoned by the administration for lack of funds.
Director-General of the Budget Office, Dr Bright Okogu, recently confirmed for instance, that the final figures signed into law by President Jonathan was about N200billion above the N4.6 trillion approved by the National Assembly, even as he stated that efforts are being made to harmonize the figures to ensure easy implementation. As expected, a meeting of the Federal Accounts Allocation Committee FAAC and the executive scheduled penultimate Friday was deadlocked as state Commissioners for Finance, who are members of the FAAC, rejected the N452billion presented for sharing among the federating units by the government.
The FAAC members had wanted government to pay arrears from an already depleted $4.3billion Excess Crude Account which had accumulated since January, from the $57/ pb and the $67 benchmark for this year, forcing the, Mr. Babalola to warn that government may be compelled to review the basic assumptions for the budget if the trend continued.
He noted that if the government continues to augment revenue sharing from Excess Crude Account, the country may run into serious problems over the next three months since the account was currently not quite healthy Speaking in a television programme recently, Governor of the Central Bank, Mallam Lamido Sanusi, predicted that the 2010 budget may not succeed since it was premised on totally unrealistic oil price assumption.
The CBN boss said the apex had advised the government to hedge its oil price to minimize the impact of any future decline in oil prices. According to him, the production quota of 2.3million barrels per day was unrealistic since the oil fields in Iraq are coming back to production in 2010, while President Barack Obama has allowed oil companies in the US to drill in the offshore of locations in the United States, pointing out that these developments were likely to reduce Nigeria’s OPEC quota this year.
So, we have defined a budget that is not likely to succeed, stressing that the only way out was for the nation to hedge the $67 benchmark price against any fluctuations in the course of the year.
However, doubts about the budget has not stopped from acting out its interventionist roles where necessary to ensure the basic components of the economy do not grind to a halt. Only recently, the CBN provided a total of N500billion for intervention in the energy and agricultural sectors.
According to the apex bank, the whole idea was to ensure effective refinancing of existing loans owed banks by the real sector particularly the SMEs. Meanwhile as if to confirm fears of the looming dangers ahead, Nigerians woke up recently to the startling revelation that the foreign reserves which rose to an all-time high of over $65billion under the immediate past Obasanjo administration has suddenly been depleted by the current administration in its attempt to augment the lean inflows into the Federation Account, raising fresh doubts as to how the Jonathan’s government intends to finance an estimated N1.5 trillion deficit in the 2010 budget.
The reason for this apprehension is the fact that the Budget which is unarguably the highest in the nation’s history, may hit the rock due to the non-availability of funds to prosecute key developmental projects earmarked for implementation. With a budget size of N4.6trillion and a deficit of N1.5trillion which observers consider a threat to price and exchange rates stability, given the benefit of hindsight of history with regard to deficit management and the impending general elections early next year, raising fears in some quarters that tougher times awaited Nigerians in the months ahead.
But while there are strong indications that the National Assembly may be forced to scale down the appropriation bill by as much as 35 to 40 per cent due to concerns that revenue forecasts may not be achieved at the end of the day, many still think that the lack of appreciable progress in infrastructural rehabilitation would indeed rob off adversely on various sectors of the economy and possibly make things more difficult of the ordinary man.
The earliest signs that all may not have been well with the Nigerian economy came only last month, when the Accountant-General of the Federation (AGF) Alhaji Dan Kwanbo, raised the alarm that the Federal Government may have been broke and might therefore, find it a bit difficult to finance and implement the 2010 budget. The AGF, for instance was worried that the administration had in an attempt to augment the deteriorating resources continued to dip hands into the foreign reserves meant to sustain her import bills.
Only recently, the Ikeja branch of Manufacturers Association of Nigeria (MAN), issued a statement that capacity utilization has dropped to about 27 per cent from 40 per cent at the end of 2009, with growing concerns that the situation may deteriorate further if government fails to take urgent corrective measures.
Among other considerations, the association cited harsh operating environment including high energy costs among its major challenges.
The Organized Private Sector (OPS) still believes that the biggest challenge facing manufacturers remains the power sector, because despite being rated as the greatest obstacle to economic development, job creation and poverty alleviation, the sector has failed to improve even with the huge injection of public sector funds by the administration. Not even the decision of President Jonathan to personally manage the sector has given manufacturers any hopes that the situation would improve at least within the current financial year.
Commenting on the direction of the budget early this year, Minister of State Babalola, explained that the economy will run on a positive and optimistic note as the Federal Government would establish special intervention funds to provide credits for commercial farming and support necessary agro- processing linkages to sustain the industry. He added that improvement in the rating would depend on the nation’s ability to sustain non-oil growth and raising capita income by addressing infrastructure through investment and reforms.
Babalola said the government has set up a monitoring and evaluation system that uses special electronic templates to track and report on actual output and outcomes achieved by Ministries, Departments and Agencies of government to what was actually delivered by them. The minister pointed out that policy priorities of the government will include building a robust and resilient economy, improving public finance management, enhancing the efficiency of the government expenditure as well as eliminating inefficiencies, leakages and rents, seeking activities in the downstream petroleum sector through deregulation.
He also listed diversification of the productive structures in agriculture and SME sectors, enhancing domestic resource mobilization and putting additional fiscal measures that would help stimulate the economy. While enjoining the citizenry to look beyond the immediate challenges to build a new and strong Nigeria that represents the collective pride of present and future generations he stated that the economy would record appreciable performance and remain resilient in 2010 given government’s efforts.
But in an interview earlier in the year, the Lagos State Commissioner for Local Government and chieftaincy Affairs, Mr. Rotimi Agunsoye, attributed the problem with Nigeria’s economic growth to government’s failure to allocate substantial amount of money to the local government to boost grassroot economic growth.
According to him, ‘The economy is not growing as expected because some powerful people believe that there is the need to have a powerful centre that is not serving the economic benefit of the larger population of the country’. He said that the country can develop faster if states and local governments are constitutionally empowered to handle most of the activities that are critical to the well being of the people.
Commenting on the latest inflation figures released by the Federal Bureau of Statistics, an economic commentator, Razia Khan, warned that tougher times awaited Nigerian if the current increase in inflation rate fails to abate in the near future.
Khan, who is the Head of Macroeconomics and Regional Head of Research, Africa Global Research at the Standard Chartered Bank, noted that the rise in inflation to 12.5per cent in April from 11.8per cent year on year in March was a worry in the context of continued easy monetary policy, and the looming inflation risks ahead. She, however, pointed out that the development was unlikely to signal any change in policy rates.
According to her, ‘With monetary growth still subdued, higher food inflation – up from 13.5per cent in March to 14.3per cent y/y in April – appears to have been a key driver of the increase in the headline rate of inflation. The reasons for this are most likely structural, and there is little that monetary policy can do to rein in ‘inflation’ of this nature.’
Going forward however, whatever the short-term dispute around arrears and the delay to the FAAC allocation currently pressuring liquidity in the money markets, warning that the amount of government spending envisaged pose considerable risks to the likely inflation profile. In the absence of reforms that might help the economy overcome some of its structural rigidities, any further substantial rise in monetary aggregates will pose some risks to prices, given the backdrop of still-weak demand.
Rather than react by increasing policy rates – the effect of which would be somewhat questionable, she advised there should be a deliberate effort by government to allow for gradual appreciation of the naira to rein in any future price pressures. Given that banks are in aggregate still flush with liquidity, she argued that the transmission mechanism of Naira (NGN) appreciation was likely to be more effective than conventional interest rate policy in containing future inflation.
An analyst, Mr. Eze Onyekpere stated recently that the budget was doomed to fail from inception, stressing that the huge deficit was not a good measure of fiscal prundence and does not augur well for predictability of funding. He contended that although fiscal deficits may be premised on the need for substantial intervention in essential services to maintain aggregate demand, promote economic growth and reduce poverty, this should be balanced against the hazards of unsustainable government expenditure.
Even within government circle, there are apprehensions that the budget may fail to achieve its targets.
His views were in tandem with what the Director General, Nigeria Institute for Social and Economic Research (NISER), Prof Tunji Akande, who warned that prospects for economic growth were uncertain amidst lingering economic challenges. The NISER boss noted, among other things, that the international oil and gas market has remained unstable while prices have been largely volatile.
With manufacturers still operating below 29 per cent capacity, overall 7.53 projected GDP growth may be difficult to achieve. According to a former president of the Lagos Chamber of Commerce and Industry, (LCCI) Asiwaju Solomon Onafowokan, the level of deficit in the economy will pose serious risks to the economy which can trigger inflation, swell lending rate and weaken the purchasing power of average Nigerians.
The former LCCI boss was also not comfortable with the level of debt service projection of N517billion, warning that if the situation was not well managed Nigerians may soon land in another domestic debt trap
He described the provison as amounting to about 40 per cent of total capital budget pointing out that the development was indefensible.
But if the budget fails as predicted, it may be because government policies over the years have failed to address the challenges of the real sector. It was against this backdrop that the President of NACCIMA, Chief Simon Okolo, advised the Federal Government to urgently implement policies that will energize the interface of industry and agriculture as part of efforts to attain the millennium development goals.
By October 1, 2010, Nigeria would have attained 50 years as an independent sovereign state. Ordinarily, this proverbial golden jubilee of her nationhood calls for celebration since it is a point where her economic and political potentials ought to have given hope to her distraught citizenry as with other nations currently rated in her category.
Indeed for most, golden years are epochal and usually the peak of most lives and careers. It should also be a period for stocktaking that helps those involved to set new goals and pursue new priorities.
But whether this can really be said of Nigeria in the light of recent developments, as she turns 50 in October would indeed be a matter for debate. This is because rather join in the celebration of quality achievements by leadership, the citizens have continued to recount tales of woes expressed in mindless deprivation of the people, unemployment, disease, hunger and corruption in high places.
With the abysmal degeneration of basic infrastructure across the country, the global assessment of Nigeria as one of the poorest in the world at the moment can be directly linked to her inability to invest in the lives of her people despite the huge provisions often made for such purpose. A cursory look at the history of budgeting in the country since 1960, shows that the successive administrations have failed to implement up to 70 per cent of budgets meant for any given financial year, a development that has affected the financing of development projects.
The 2011 Budget
The 2011 budget was prepared by the president of the country and his executive committee. It was indeed a test of the unelected president who took over power due to the death of his predecessor Umaru Musa Yaradua, who died on 5 May 2010. The 2011 budget was the first budget that the Goodluck Jonathan administration has put together and the eyes of the entire nation are on his performance and capability, nonetheless. International organization such as theInternational Monetary Fund has also voiced their support with the Jonathan administration to reduce fiscal deficit for 2011 to 2013.
In December 2010, a budget of 4.236 trillion naira (18% less than 2010 budget) was prepared by the administration and was presented to the House of Representative on 15 December 2010. At the budget speech, the president of the federation called the budget; “a budget of fiscal consolidation inclusive economic growth and employment generation. The focus of this Administration is to establish and strengthen the sound macroeconomic environment that Nigeria needs to ensure the prosperity of our citizens”.
Why Jonathan refused to sign 2012 budget, Budget committees to meet this week
It will be recalled that the Senate and the House of Representatives on March 15 passed a budget of N4.88 trillion with a benchmark of $72 per barrel. The vote was increased from N4.65 trillion proposed by the Executive.
A source said: “The main bill was submitted two weeks ago, but the government did not get the details until March 28.
“These details were about 3,000 pages and upon the receipt of these, the Budget Office and the Ministry of Finance worked round the clock to analyse the details.
“The Budget Office had completed the analysis yesterday but it noticed some technical errors in the bill as passed by the National Assembly.
“These technical errors have to be cleaned up before the Budget Office can advise the President to assent the 2012 budget or not.
“For example, there are some ongoing projects in the Niger Delta but no money was allocated for their completion. The funds meant for the projects were put elsewhere.
“Also, since the National Assembly raised the benchmark to $72 per barrel, it means automatically that statutory funds for the NDDC and the Universal Basic Education Commission (UBEC) will go up. But the reverse was the case in the bill sent.
“We have many other errors like that which we need to clean up.
Another official in the Budget Office said: “The budget has not been sent to the President for his signature because of some “irregularities” with the budget the legislators passed.
“The irregularities noticed in the 2012 budget by the ministry and the Budget Office had to do with some components of the budget like the administrative capital which the Executive had drastically reduced to free up more money for infrastructure development. The National Assembly retained some of the Administrative Capital.
“Administrative capital deals with the funds in the budget set aside for the provision of office furniture and equipment, which the government believes could be forfeited to make more money available for other serious capital projects – in line with the administration’s desire to deliver on social infrastructure.
“Also, the budget figures for the Legislature were said to have been jacked up by the National Assembly. This does not go well with the Executive.”
Despite these irregularities, the Budget Office official said President Jonathan is anxious to sign the 2012 Budget into law.
The official also denied any friction between the executive and the legislature, stating that “the executive has done its ground work to ensure that there is no conflict of interest between both arms of government.
President signs 2012 budget
On April 13th Mr Jonathan signed into law a N4.697trn federal budget for the 2012 calendar year, aimed at fiscal consolidation, inclusive economic growth and job creation (the National Bureau of Statistics estimated that the unemployment rate was 23.9% in 2011). At the signing ceremony in Abuja the president said that, as well as the N4.697trn budget expenditure, an additional N180bn had been earmarked for special projects under the Subsidy Reinvestment and Empowerment Programme (Sure-P). This brings the total spending plan for this year to N4.877trn, which is 2.7% above the N4.749trn total spending in the initial budget proposals presented to parliament in December. Mr Jonathan explained that his original proposals, which assumed that the government would fully deregulate the downstream oil sector, had to be reworked to make N888bn provision for petrol subsidy after the administration opted for partial subsidy removal (January 2012, Economic policy). Mr Jonathan said that N1.34trn had been budgeted for capital expenditure in 2012, with the focus on completing viable projects. Furthermore, the government would endeavour to involve the private sector in the funding of critical infrastructure projects, he maintained.
Jonathan signs Nigeria’s 2014 budget as Defence gets 20 per cent
Out of a total budget of N4.962 trillion, the allocation to the defence sector took about N968.127 billion.
The Federal Government on Friday finally released to the public the 2014 budget approved by the National Assembly and signed by President Goodluck Jonathan.
The budget was signed by the President on Friday.
Presenting the approved figures in Abuja, the Minister of Finance, Ngozi Okonjo-Iweala, said out of a total budget of N4.962 trillion, the allocation to the defence sector took about 20 per cent, totalling N968.127 billion because of the growing insecurity situation in the country.
Out of the total provision for the sector, Mrs. Okonjo-Iweala said between January and April, government had disbursed about N130.7 billion to relevant authorities, including the army, navy, air force, police, and civil defence.
Of the disbursed figure, about N85.9 billion was to take care of the personnel costs of the agencies, which was handed to the military authorities for direct payment to their personnel.
She said based on the president’s contingency last year, some money was also used for the payment of additional N24.8 billion, while another approval by the President of N3.8 billion was still being processed.
Assuring that government has done its best to disburse as and when due monies to agencies under the defence sector as needed for their operations, the minister said there were other requirements that needed extra allocation, including those for joint task force and special operations against terrorism.
“No amount of budgetary provision can be enough for the military,” she said. “The military all over the world that engages in war does not always have enough, particularly in this new type of war against terror, which requires equipment to assist them. I don’t think the Nigerian military would be different from any other in the world in the same circumstance.”
Mrs. Okonjo-Iweala said government needs to spend expeditiously to ensure the defence sector receives the right support to prosecute their counter-insurgency operations.
On specific policies designed to help create jobs and grow the economy, the minister said the operations of the Nigeria Mortgage Finance Corporation launched early this year by President Goodluck Jonathan would commence in June with adverts inviting the initial 10,000 prospective beneficiaries of the mortgage finance programme.
She identified the scheme as some of the direct benefits that would accrue from the budget, and said government deliberately introduced the policy to support mortgage refinancing schemes to promote greater liquidity in the economy for housing.
“Government has been working since January to put in place all the relevant institutional frameworks and policies that would support and pick up additional mortgage financing in the economy for housing production. By the beginning of June, government would begin to advertise for people who would benefit from the initial 10,000 mortgages for low income earners,” she said.
She said other sectors through which the government has introduced policies in the budget to grow the economy and help create jobs include manufacturing, agriculture, automobile, aviation and solid minerals, where there would be lower preferential tariffs on equipment to encourage more participation.
She said the delay in signing the budget by the president has minimal impact as it did not hamper the running of the economy.
This, she said, was because of the provision in the constitution, which allowed government to continue the implementation of the budget up to 50 per cent based on the previous year’s budget before the approval of the new budget.
“Implementation of the budget has not impeded the impact of the performance of the economy, as salaries and debt service have been paid as and when due; while N200 billion capital budget has been released for the first quarter, the second tranche is to be released next month,” she said.
On the N53 billion padding in the budget by the National Assembly, the minister said it was scattered through the capital and recurrent budget to beef up allocations in certain sectors including the police spending, army and other security agencies.
The Director General, Budget office of the Federation, Bright Okogu, who provided the details of the revised budget, said the approved Medium Term Expenditure Framework, MTEF, was based on $77.5 per barrel benchmark price for oil as against N79 per barrel last year.
He said the exchange rate was left at N160 to the dollar as in 2013, with real gross domestic product, GDP, growth rate put at 6.75 per cent.
Mr. Okogu said on the basis of the various assumptions, the aggregate revenue for the three tiers of government before applying the sharing formula stood at N10.88 trillion, with the Federal Government’s share at N3.73 trillion, compared to N4.13trillion in 2013.
While total expenditure was N4.695 trillion, recurrent non-debt spending, made up of salaries, overheads, and other transfers was about N2.455 trillion; provision for debt service, N712 billion; statutory transfers to identified entities like the National Assembly, Niger Delta Development Commission, Universal Basic Education, National Human Rights Commission and others, N408.69 billion.
Provision for capital expenditure is N1.119 trillion as against N1.59 trillion in 2013. When the capital component of the MDAs that got the statutory transfers is added, the figure for capital expenditure rises to N1.287 trillion.
Allocation for the Subsidy Reinvestment and Empowerment Programme, SURE-P, activities is N268.37 billion.
Mr. Okogu said the fiscal deficit ration of about 2 per cent of GDP before the rebasing was reasonable, as it fell below the 3 per cent rate allowable under the provisions of the Fiscal Responsibility Act requiring government to keep the deficit in the annual budget.
Third Time Lucky: Jonathan signs 2015 budget away from public eye
A report has disclosed that President Goodluck Jonathan has signed the 2015 Appropriation Bill into law.
The Punch disclosed that the President Jonathan signed the budget into law two days ago without the knowledge of the public, but could not confirm why the President had kept the development away from public knowledge.
The 2015 budget was passed by the Senate on April 28, after the passage of the same bill by the House of Representatives on April 23, with an expenditure outlay of N4.493tn, up from the N4.425tn proposed by the Executive.
Some Nigerians had expressed concern over whether the bill would be signed into law before the change of Government on May 29 or whether it would be left to the incoming Government, which may still prepare a supplementary budget.
The report disclosed that the budget was signed by the President immediately after the document passed by the National Assembly was transmitted to him.
The Special Adviser to the President on Media and Publicity, Dr. Reuben Abati, also confirmed that Jonathan had signed the budget “some weeks back”.
While passing the budget, however, the Senate slightly reduced the N2.607,601,000,300 proposed by the Executive to N2.607,132,491,708 as recurrent expenditure, simultaneously scaling down the capital expenditure from the N642,848,999,699 estimated in the proposal to N556,995,465,449.
The Chairman, Joint Senate Committee on Appropriation and Finance, Mohammed Maccido, noted that the details of the figure approved by the Senate in the document were not different from the version passed by the House of Representatives.
He maintained that the budget would be driven by the $53 oil benchmark, an exchange rate of N190 to one US dollar, 2.2782m per barrel crude oil production per day, and a deficit gross domestic product of -1.12 per cent.
The budget also put fiscal deficit at N1.075tn; N953bn for debt service and N375.6bn as statutory transfers.
Education has the highest allocation in the budget with N392.3bn, followed by the Military which gets N338.7bn. Police commands and formations will receive N303.8bn.
N237bn was allocated to the health sector, N153bn for the Ministry of Interior and N25.1bn was budgeted for the Ministry of Works.
This is the third year in a row that President Goodluck has signed the budget into law without the knowledge of the general public.
Prior to the signing of the 2013 budget, Jonathan and successive heads of government had been signing the fiscal document in the presence of media representatives and some members of the public, including the leadership of the National Assembly, except for the period when the late President Umaru Yar’Adua was sick and members of his kitchen cabinet claimed that he signed the budget on his sick bed abroad.
President Jonathan signed the document away from public eye in 2013 because of the bad blood that existed between the Executive and the Legislature at the time.
That year, Abati only issued a statement announcing that Jonathan had signed the bill into law.
Also last year, Jonathan signed the 2014 budget in secret and handed it over to the Minister of Finance, Dr. Ngozi Okonjo-Iweala, and the Director, Budget Office, Dr. Bright Okogu, for implementation, two days after he signed it.
Abati had explained then that Okonjo-Iweala was not around when the President signed the budget, hence the need to formally it hand over to her.
‘President can sign budget without seeing details,’ National Assembly says
The comment was made by the Chairman of the House of Representatives Committee on Appropriation, Abdulmumin Jibrin via a statement released on Wednesday, March 30, 2016.
The National Assembly has said that President Muhammadu Buhari can sign the 2016 budget without knowing all the details inside it.
The comment was made by the Chairman of the House of Representatives Committee on Appropriation, Abdulmumin Jibrin via a statement released on Wednesday, March 30, 2016.
It reads:
“We wish to make the some clarifications, following media reports suggesting that withholding of assent to the 2016 appropriation bill by the presidency is due to the failure of the national assembly to send the budget details to the presidency alongside the appropriation bill.
“Ordinarily, the national assembly should not have responded to the issues raised, but we are duty-bound to put the issues into perspective and put records straights even though we doubt very much if the presidency will issue such statement knowing full well the challenges the budget has faced so far.
“The general public should note that the MTEF and 2016 budget proposal came to NASS very late. You will also recall that a lot of dust was raised over different versions of the budget circulated in the national assembly. Further, some ministers disowned the content of the budget during defence before NASS.
“Amid these inconsistencies and discrepancies, the NASS had been deeply engrossed in perfecting the anomalies, ironing out of the wrinkles and stretching the twists inherent in the 2016 appropriation bill.
“In order for the nation to move forward and avoid stagnation of administrative processes, the tradition is that the bill is passed and forwarded to the presidency for assent, while the lawmakers continue to work on the details.
“There is nothing abnormal about this practice and yet nothing abnormal about a president assenting a budget before or after seeing the details. In any case, the budget details are usually sent within a week or two after passing the budget.
“In view of the inconsistencies, errors, omissions and padding that characterised the 2016 budget, it would be unpatriotic of NASS to forward the budget details without being extra-careful, meticulous and cautious in discharging its duties. This is to ensure we do not make same mistake that the executive made.
“The NASS holds the president in high esteem and will continue to support him. There were several instances where we demonstrated our support to the present administrations in the past.
“At the risk of sounding immodest, the NASS approved the President’s Special Advisers without hitch, approved ministerial nominees without rancour, approved supplementary budget without delay and displayed a rare show of patriotism in the receipt and passage of the 2016 MTEF and budget.
“The 2016 budget is the most challenging budget the NASS has ever passed in its recent history. Taking into account the many controversies and omissions, particularly in NYSC, prisons, pensions, personnel shortfalls, among others, the budget failed in many respects to connect with the policy thrust of the government.
“Given the foregoing efforts, it is therefore unfair for accusing fingers to be pointed at NASS when the presidency defers or delays assent to the budget. Nowhere in the world that a budget is presented to the parliament, and expect it to be passed warts and all without subjecting it to the rigours of scrutiny, debate and painstaking processes and inputs of the parliament.
“The NASS will continue to exercise its constitutional duty of appropriation to the latter. While recognising the President’s power to withhold assent, the NASS is also constitutionally required and has power to veto. But we don’t want that to happen and we don’t see this happening in this case.
Jibrin issued the statement after Buhari refused to assent to the budget without receiving details from the National Assembly.
Why I won’t sign 2016 budget in a hurry — Buhari
President Muhammadu Buhari on Thursday explained why he would not hurriedly assent to the 2016 passed by the National Assembly.
He said he would critically review the document before assenting to it, according to a statement by Femi Adesina the special adviser to the President on media and publicity.
Speaking at a meeting with the United States Secretary of State, John Kerry, in Washington DC, President Buhari said in view of the controversial alteration and padding of the budget proposals, he needed to review the appropriation bill to be certain that its contents tallied with the authentic budget proposal presented to the National Assembly.
“Some bureaucrats removed what we put in the proposal and replaced it with what they wanted,” Mr. Buhari said. “I have to look at the bill that has been passed by the National Assembly, ministry by ministry, to be sure that what has been brought back for me to sign is in line with our original submission.”
Declaring that his administration will continue to vigorously prosecute its war against corruption, President Buhari sought and received an assurance from Mr. Kerry that the United States Government will facilitate the repatriation of all stolen Nigerian funds found within the American banking system.
“It will greatly help our country if you assist us to recover all our stolen funds which we can establish to be within your financial system,” the President told Mr. Kerry.
Responding, the Secretary of State said that he has been told that the stolen Nigerian funds were in “billions of dollars”.
“It’s not easy to hide that amount of money and we are pretty good in tracing them,” Mr Kerry assured President Buhari, adding that relevant United States Government Officials will meet with the Chairman of Nigeria’s Economic and Financial Crimes Commission to discuss further cooperation in that regard.
Mr. Kerry applauded the Buhari administration’s success in rolling back the Boko Haram insurgency, saying the United States will continue to give Nigeria all possible support to ensure that the terrorist sect is finally eliminated as a threat to national and regional security.
The Secretary of State also praised President Buhari’s clear order that Nigeria’s Armed Forces must show greater regard for the human rights of persons in the theatre of operations against Boko Haram.
Acknowledging that the United States has been of great help to his administration in the retraining and re-equipping of the Nigerian Armed Forces that has resulted in the significant success already achieved against Boko Haram, President Buhari said the Federal Government was now working very hard to restore full normalcy in the North Eastern states.
“Boko Haram no longer holds any local government area. We are reconstructing damaged facilities and preparing the police to take over and reassert civilian control over areas affected by the insurgency,” the President told Mr. Kerry.
From my observation, I found out that:
- 2010 Budget was signed into law in April;
- 2011 Budget was signed into law in May;
- 2012 Budget was signed into law in April
- 2013 Budget was signed into law in February;
- 2014 Budget was signed into law in May;
- 2015 Budget was signed into law in May;
- 2016 Budget is not yet signed into law – today is April 9!
While Nigeria has experienced a change of government from an opposition to ruling party; the state of Nigeria economy has remained the same. The question is, what has really change about Nigeria’s Budgetary System or process? Nothing! Drama year in year out; the economy keep rising, falling, falling and rising…the Government still cycles itself; perpetuating Nigeria’s economic underdevelopment through their actions and inaction.
Former President Goodluck at a time refused to sign the passed budget into law; now President Buhari is “taking his time” in signing the passed budget into law; yet, Nigerians are dying, lacking and even leaving the country in search of greener pastures abroad. I rest my case here!
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It is well with Nigeria.