Another budget face-off looms

President Muhammadu Buhari presenting the 2018 Budget proposal at the National Assembly joint sitting in Abuja …recently.

• Presidency Playing To The Gallery-Ibrahim
• Senate Won’t Compromise Due Process

Strong indications emerged at the weekend that the country may be heading for another season of budget showdown, as the executive and the legislative arms seem to be holding divergent views on the plan to reset the budgetary cycle back to the traditional January to December.

President Muhammadu Buhari, on November 7, tabled the N8.6 trillion 2018 spending plan before the National Assembly.

Up till this moment, no serious legislative action has been taken by the National Assembly, even though it is barely three weeks to the end of year break. The implication is that the budget re-setting plan billed to come into effect on January 1, 2018 may still remain elusive.

In fact, the Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper  - the baseline and guide for which the budget is anchored is yet to be approved by the legislature, which has not hidden its desire to “frustrate” the budget reset plan on the suspicion that the executive is trying to stampede it into rushing to approve the proposal without due process.

This position, which appears to be resonating among majority of the lawmakers was further reinforced and defended by the Chairman, House of Representatives Committee on Insurance and Actuaries Matters, Olufemi Fakaye on Friday, while speaking at this year’s Nigeria Deposit Insurance Corporation (NDIC) Seminar for Business Editors and Finance Correspondents of Nigeria (FICAN) held in Kano State.

Speaking on the theme: “The Role of Nigerian Banking Sector: Opportunities, Challenges and the Way forward, “Fakeye said: “It is impossible that we are going to pass the 2018 Budget in December. Remember, the budget or Appropriation Bill is just like every other bill and there is a procedure that a bill goes through before its passage. We are not going to circumvent the process. I think the executive arm needs to put its house in order. If they wanted early passage of the budget, they ought to have brought it or time.

“We are hearing of plans to roll-over capital projects of 2017 into 2018, yet the executive has gone ahead to borrow $5.5 billion with the plan to plough $2.5b of that borrowing for the implementation of the 2017 capital projects that would be rolled over to 2018. Excuse me sir, does that not confuse you?

“The law recognises budget as a 12-month cycle. Our position is that the capital component of the 2017 budget, which we approved should continue till it concludes the cycle in June next year, otherwise there was no need to borrow to implement the 2017 budget when we want to start another budget cycle in January 2018…The whole thing is confusing to us and like I said before, nobody is going to stampede us into that kind of confusion,” Fakeye stated.

Buhari while laying the budget proposal before the National Assembly regretted that: “The late passage of the 2017 budget has significantly constrained budget implementation. As you are aware, the 1999 Constitution authorised necessary Federal Government expenditures prior to the 12th of June 2017, when the 2017 Appropriation Act was signed into law. This year, we have worked very hard to achieve an earlier submission of the Medium-term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), and the 2018 Appropriation Bill. Our efforts were to avail the National Assembly with sufficient time to perform its important duty of passing the Appropriation Bill into law, hopefully by the 1st of January 2018. It is in this spirit that I solicit the cooperation of the legislature in our efforts to return to a more predictable budget cycle that runs from January to December,” the President appealed.

Meanwhile, some Economists  and social commentators have suggested options to avert the repercussion of the impending budget face-off.

One of them is Professor of Economics and Executive Chairman, Society of Analytical Economics, Prof Godwin Owoh, who countered the idea, arguing that it goes against the spirit and letter of Section 382 of the Nigerian Constitution, which clearly spells out the way and manner in which appropriations are to be undertaken.

According to Owoh: “The issue of rolling over of budgets was never contemplated by the constitution because it clearly states that every budget year must run for 12 months, and should there be any cause for a delay, the President shall order the withdrawal from the Consolidated Revenue Fund of the Federal Government, the sum for the purposes of running of government, an amount not exceeding as the same approved in the preceding year, until such a time that a new fiscal plan is approved, and the President is authorised under that section of the constitution to do this without resort to any organ of government, including the National Assembly. The idea of rolling over a plan to another is a misnomer and an illegality because the matter of appropriation is a constitutional matter. The Nigerian economy has been run on a wrong interpretation. This is the time to correct this.”

Owoh doubted the preparedness of the executive to actualise a reset of the budget life cycle.
His words: “The best solution to our budget crisis is to reset the budget year to run from January to December. But it is not likely that this is going happen given the way and manner that the executive is carrying on. Firstly, most of the nominations for confirmation forwarded to the National Assembly have not received the clearance expected from the Legislature.

Secondly, and most importantly, the executive has a very poor accounting and record keeping culture. Most of these government agencies have not undertaken proper audit of their respective establishments to show how the funds they have reviewed in the past were spent so that lawmakers can approve new funds for them. This is one area where delays arise from. I don’t see them repenting overnight, that is why I don’t see the likelihood of a January 1, 2018 Appropriation. The President should just prepare to take the bull by the horn by terminating the 2017 plan in December and starting a fresh plan in January, using the power vested in him to appropriate, in line with the provisions of Section 382 to begin implementation based on the 2017 appropriation.”

The Senate is, however, foreclosing the chances of compromising any of its rules, or laws guiding budget preparations in a bid to achieve the much-canvassed reset of the budget life cycle.

Yesterday, it insisted that it wont be blackmailed into submission by the executive, which it said, was unserious with actualising its desire, and was only playing to the gallery.

This emerged just as the leadership of the two chambers of the National Assembly are still struggling to calm frayed nerves over the failure of the executive to execute a groundswell of capital projects provided for in the 2017 budget.

Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Rafiu Ibrahim, told The Guardian in a telephone interview that even though the Senate would want to cooperate with the Presidency on the need to reset the life cycle of the budget, the executive arm has not demonstrated that it was actually serious in that regard.

Ibrahim, who is also a member of the Senate Committee on Appropriation, stated that it is now left for the executive to present to the National Assembly, all details regarding revenue and expenditure with regards to all key institutions of government in good time to facilitate the budget process.

The lawmaker, who is also a member of the Senate joint committee preparing the 2018 to 2020 Medium Term Expenditure Framework  (MTEF), and Fiscal Strategy Paper (FSP), said the executive would, at best be day- dreaming to expect that the National Assembly would compromise due process in preparing the budget.

“They (the executive) have set their own agenda by presenting the budget even though behind time. We are working on it by going through all due processes. We will not compromise any part of the process,” Ibrahim said, adding, “from the start you can see that it is the executive that is not serious about it. We invited them for MTEF discussion last week, the most important agencies like the CBN, NNPC were not there. So, you can see that the ball is back to them. They are the ones who are not serious now. They should do their homework before playing to the gallery by saying that they want to reset”

On his part, Vice Chairman, Senate Committee on Public Accounts, Foster Ogola, declared that lack of proper coordination in the executive, as well as insufficient knowledge on budget preparation matters were issues that have continued to affect this administration, particularly on national budgeting system.

He submitted that it has become obvious that the executive arm of government cannot comply with the requirements of the law regarding the MTEF on annual basis.

The lawmaker is of the view that to avoid a national embarrassment occasioned by breaches during budget preparation, it may be helpful to amend the Fiscal Responsibility Act to allow MTEF presentation to be once in five years.

He added that all national budgets within these five years should be based on the existing MTEF.

Ogola lamented that, “while the Act stipulates that the MTEF be presented to the National Assembly four months to the end of the year, the 2018 to 2020 MTEF was sent to the Assembly in October. Worse still, the 2018 budget was presented to the joint session of the National Assembly in November when the consideration of MTEF had not even begun in the legislature. You know that the President is supposed to base the preparation of the budget on the MTEF, as approved by the National Assembly. These are not just clear breaches of the law, but have become national embarrassment.”

It was however learnt that the leadership of the two chambers of the National Assembly have resolved to pacify many lawmakers, who are still very displeased with the executive over the refusal to implement key capital projects provided for in the 2017 budget.

Only about N450 billion have been released out of the N2.2 trillion appropriated for capital projects in the 2017 budget.

This has made the execution of the constituency projects impossible in most parts of the country, a development, which lawmakers are not prepared to ignore.