By Kemi Yesufu
On Wednesday December 14, President Muhammadu Buhari for a second time carried out the annual ritual of presenting the Federal Government’s 2017 budget to a joint session of the National Assembly.
A day before Buhari laid the budget, the House of Representatives passed for second reading, the 2017-2019 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP). The document which is a precursor to the budget was referred to the joint Committee on Appropriations, Finance and Loans, Aids and Debt Management. It contains plans for capital expenditure for 2016 which increased to N635.77 billion. It also has a revenue target of N4.169 trillion (against N3.856 trillion in 2016) and total expenditure of N6.687 trillion.
A further breakdown of the MTEF showed the Gross Domestic Products (GDP) is expected to grow at 3.02 percent in 2017, with crude oil benchmark pegged at $42.5 per barrel and 2.2mbpd oil production; foreign exchange pegged at N350/$ while fiscal deficit was pegged at 3 percent. But as expected, members from the main opposition, the Peoples Democratic Party (PDP) expressed doubt on Federal Government’s ability to realise the three-year budgetary estimates.
Minority Leader, Leo Ogor, as well as other lawmakers, Linus Okorie, Jones Onyereri and Dennis Amadi, argued that the 2.2mbpd crude production target is unrealistic judging by the activities of Niger Delta militants, adding that the current situation would equally have negative impact on revenue projections. But speaking in support of the plan, Deputy Speaker, Yussuf Lasun, said with the use of strong fiscal and monetary tools by government, the goals set are achievable.
The Deputy-Speaker who opined that government’s projections are realistic, however stressed the need to find a lasting solution to militancy in the Niger-Delta, increase the tax base, re-invest recovered looted funds, diversify the country’s revenue sources and block leakages in Ministries, Department and Agencies.
The Deputy Speaker said the Federal Government deserved support on the plan, saying, “With current price level of $50 per barrel and Nigeria’s current output of 1.9mbpd, the estimates are conservative enough especially with OPEC output freeze last week.”.
Back at the budget presentation ceremony, Buhari in his speech explained that the ministry of Works, Housing and Power received a proposal of N529 billion while the ministry of Transport got N202 billion.
He also disclosed the increase in the Judiciary’s budget from N70 billion to N100 billion. On recurrent expenditure, he said N482.37 billion will be spent by the ministry of Interior, N398.01 billion by the ministry of Education, N325.87 billion by the ministry of Defence and N252.87 billion by the ministry of Health.
Special Intervention Programmes will gulp N150 billion while Defence will get N140 billion for capital expenditure. In the breakdown, Water Resources will get N85 billion, Industry, Trade and Investment will get N81 billion. Similarly, Interior Ministry received N63 billion for capital expenditure and Education will get N50 billion for same.
Universal Basic Education will get N92 billion, while Health gets N51 billion. The Federal Capital Territory will receive N37 billion, while Niger Delta Ministry gets N33 billion. Niger Delta Development Commission on the other hand gets N61 billion.
About N100 billion has been provided in the Special Intervention programme as seed money into the N1 trillion Family Homes Fund which the President said will underpin a new social housing programme.
Speaker Yakubu Dogara, in his speech on the day laid out his opinions on how the national budget can make the desired impact, saying time has come for the Appropriation Bill to be handled by the Executive and Legislature in the most effective fashion. He called on the president to collaborate with the National Assembly to extend the 2016 budget implementation period to May 2017 in order to give more time for the capital component of the budget to be implemented appreciably.
Dogara who gave the closing remarks on the day observed that government has to brainstorm and come up with more ways to deliver the promised change to Nigerians, adding that the rich few are only safe when the majority poor feel that government is doing what it can to improve their lot.
“As I counseled last year, an Appropriation Act must be allowed to run for an uninterrupted period of 12 months, for the Executive to have enough time to execute it. This means that both Mr. President and the National Assembly must find a way to continue the execution of the 2016 Budget especially the capital component till May 6, 2017, which is 12 months from the date Mr. President signed the 2016 Appropriation Bill.
“This is also the clear intendment of the definition of a Financial Year in Section 318 of the Constitution. The problem is that most often, the recurrent component of the Budget is implemented to an appreciable level, but the capital component execution is very low. It is crystal clear that the capital component of the 2016 Budget cannot realistically be implemented for only six months period considering the time required for procurement processes and the raising of the revenue including loans by government. Except something is done, this will result in yet another failed budget. A vicious cycle repeated every year. We must therefore put on our thinking caps and ensure that the change promised Nigerians is reflected in our budget process, as we cannot really make appreciable progress as a nation without significant implementation of the Capital component of the Budget.”
“It is certainly frustrating that we go through the annual budget cycle/process of budget presentation by Mr. President, processing of same by the National Assembly, passage and signing into law every year, without unlocking the full potentials of such Budgets for our citizens. This is because implementation and execution of the agreed Budget is always a major challenge year in year out. Sometimes, implementation rate is as low as 30 percent, most times it is never higher than 50 percent at the best of times. This has led to unacceptably high rate of abandonment of projects and distortions in Nigeria’s economic planning. Of course, this is an inherited problem for Mr. President as he has only effectively passed through one Budget cycle.”
Assuring the president of the National Assembly’s cooperation to bring the desired change to Nigerians, he urged the president to add effective budget implementation, distorted budget cycle and abandoned capital projects /white elephant projects, to the list of things, in addition to corruption, that he must kill.
Rather disappointingly, unlike his speech during the presentation of the 2016 budget, Dogara didn’t say much on how the House will ensure effective oversight of Ministries, Departments and Agencies (MDAs) in terms of implementing budget 2017. This is especially when that function of lawmakers is one many would not likely score the House high for 2016. The Speaker also didn’t mention the approach to be adopted by the House to improve on its performance on the timeliness of its work on 2016 budget, which many say wasn’t good enough, with regard to making improvement with the 2017 budget. Majority, if not all Nigerians would like the 2017 budget passed as quickly as possible. For the 2016 budget, a good number of the Standing Committees in the House put in a lot of work to meet the deadline of submitting their reports to the Appropriations Committee, with some good interventions coming from them. For example, the House Committee on Youth Development discovered a shortfall in funding for the National Youth Service Corps (NYSC) programme that would have left thousands of graduates stranded and this led to the variance being corrected. The House also was pivotal to increasing the budget for the Economic and Financial Crimes Commission (EFCC) allocation in order for the agency to complete its headquarters and have more funds for operations.
Undoubtedly, all eyes will be on the House to see if it would use the 2017 budget to fully restore its reputation which suffered a big hit when suspended former chairman of the Appropriations Committee, Abdulmumin Jibrin accused Dogara, Lasun,Ogor and Majority Whip Alhassan Doguwa of illegally inserting projects into the budget. All four principal officers of the House have denied any wrong doing. Jibrin who also accused 10 chairmen of Standing Committees of padding the budget and the entire House of systemic corruption was suspended for a year for breaching the collective privilege of the House and bringing the Green Chambers to disrepute. The handling of the allocation for constituency projects in the 2017 budget is another issue that could lead to crisis. Jibrin had accused the four principal officers of taking for themselves N40 billion out of the N100 billion allocated for constituency projects in the 2016 budget and unlike in times past, first term lawmakers are kicking against the tradition of principal officers, influential ranking members and chairpersons of State Caucuses getting preferential treatment when it comes to zonal intervention projects.
Both lawmakers and keen observers would also be looking out to see how Jibrin’s replacement, Mustapha Dawaki will manage the physically and mentally tasking assignment of coordinating the work of the House on the budget. Daily Sun had exclusively reported plans by the National Assembly to jack-up its allocation from N115 billion with a target of going as high as N150 billion, the same figure Edo State budgeted for 2017. There is likely to be a backlash from the public and how the National Assembly manages the negative response to an increase of its budget will be part of the story of the 2017 budget.
Lawmakers Speak
Daily Sun spoke with lawmakers on how the House can avoid the pitfalls of the 2016 budget and they were forthcoming with suggestions. For the Minority Leader, he said : “First you have to take note of the date when the budget was presented and the fact that we had to go on Christmas break. But when we resume, we will do our best to ensure that the budget is passed as soon as possible.
“I can assure you that the process will be more transparent. We already operate an open and transparent process, it’s just that some people like to give a dog a bad name, to hang it. We will make sure that NGOs and relevant stakeholders are involved in the process. But ultimately, there is no way the National Assembly will return the budget to the Executive the way it came”.
Also speaking on how the House can impress with its work on budget 2017, chairman of the Committee on Legislative Budget and Research, Timothy Golu threw the challenge back to the executive. This is as he pleaded that the National Assembly needs enough time to do a thorough job. “Concerning the 2017 budget, we expect that things will be done differently. The president tagged it the budget of recovery and growth. We pray that he means this. We hope that with this budget, Nigeria can recover from its loses, that Nigeria will recover from the not so impressive implementation of the 2016 budget, which we can blame on the unrealistic assumptions for that budget. The figure of 2017 budget is higher. But for many, what is most important is not the figure of the budget, rather how it will be implemented”, he opined.
Giving assurances that meeting the aspirations of Nigerians is key to the House, its spokesman Abdulrazak Namdas said the Green Chambers will apply the federal character principle. “ What I can say is that with the 2017 budget, we will ensure that federal character is upheld and that capital projects and critical interventions are spread across the country equitably. If we look at the budget and notice that it is lopsided, we will not allow it. We will sit and make sure that all regions get a fair share of capital projects. We will insist that there must be a fair sharing of resources.
“But I also agree that for the 2017 budget, we have to show more experience and we must be seen to be transparent. But don’t forget that with the 2016 budget, the National Assembly and the president were handling the budget for the first time. Now, it is expected that both sides will be more efficient with the second budget we will be working on”, Namdas stated.