Hon. Aminu Tambuwal
By Ndubuisi Francis, Onwuka Nzeshi and Dele Ogbodo
The cold war between the legislature and the executive played out Wednesday at the presentation of the 2013 Appropriation Bill, where both arms of government expressed divergent views on the appropriate oil benchmark for next year’s budget.
While the House of Representatives expressed dismay that the 2013 budget estimates were based on $75 per barrel even after it had recommended a slight increase to $80 per barrel, the presidency defended its action.
The House also scored President Goodluck Jonathan low on the implementation of the 2012 budget and used the occasion to raise some of its grievances against the executive arm of government.
House Speaker, Hon. Aminu Tambuwal, said interim reports from the field oversight conducted by the House committees on the 2012 budget implementation scored the budget implementation low in fund releases as well as utilisation of available resources.
Tambuwal, in his remarks shortly after the presentation of the 2013 Appropriation Bill, said the poor implementation of the 2012 budget had become a great challenge to all arms of government particularly the lawmakers.
He said that the provisions of Section 8 of the Appropriation Act which states that approved budgeted funds must be released to Ministries Departments and Agencies (MDAs) as at when due were being violated.
On the benchmark controversy, Tambuwal explained that the recommendation of an increase in the oil benchmark was to enable the government to raise more revenue and reduce the deficit component of the budget, which has been rising yearly.
He recalled that the 2012 budget contained a deficit and the main source of funding this deficit was domestic borrowing.
“Figures emanating from the Debt Management Office regarding domestic borrowing are however worrisome. At a whopping $33.6 billion, government appears to be monopolising domestic borrowing to the unhealthy exclusion of the private sector. This is certainly a matter of concern because global statistics on sustainable debt-GDP ratio percentages cannot continue to be used as guide for an economy that is not keeping pace with global trends.
“In our effort to address this concern, only yesterday (Tuesday), in passing the 2013-2015 Medium Term Expenditure Framework (MTEF), which is the basis for annual budgets, the House resolved to raise the oil price benchmark from $75 per barrel to $80 per barrel with the objective that the difference of $5 per barrel be channelled exclusively towards reducing the deficit in the budget and consequently reducing domestic borrowing for same purpose by 66 per cent. This will make available these loanable funds to our private sector which will stimulate the economy and jobs creation for our teeming unemployed youths,” Tambuwal said.
He said that whereas the Legislative Agenda of the House prescribes that “the draft budget be submitted at least three months prior to the start of a fiscal year” the practice over the years has been late submission of budget and poor implementation of same after its passage by the parliament.
He however noted that the laying of the 2013 budget estimates early in October reasonably meets the expectations of the parliament.
He disclosed that already, the House has begun work on a bill for the amendment to Section 82 of the 1999 Constitution to ensure early presentation of budget and its impressive implementation.
The speaker also reminded the executive on the need for the government to compose the Public Procurement Council provided under the Public Procurement Act, as a way of enhancing the budget implementation.
The speaker also observed two critical omissions in the MTEF document, which are the non-reflection of the revenue from gas, running into billions of dollars, and external borrowing.
He also expressed worry over the management of Nigeria’s foreign reserves, which stood at $41.48 billion as at October 4.
The National Assembly, Tambuwal said, was becoming increasingly concerned about the disregard for its resolutions and public comments by certain functionaries of the executive on same. He cited the Senate resolution on the Bureau of Public Enterprises (BPE), the House resolution on the state of insecurity of the nation, requesting the president to visit and brief the House, the House resolution on the Security and Exchange Commission (SEC), the concurrent resolution of the two chambers on Bakassi, among others, as those that the executive had treated with levity.
In his remark, Senate President David Mark assured the president that the National Assembly would ensure that the 2013 budget, when passed into law, would be closely monitored to ensure its accountability, probity, transparency and full implementation.
He was optimistic that the budget would address some of the various economic, political and social challenges currently facing the country.
He urged the president to consistently ensure the timely presentation of the budget like he did yesterday.
According to him, this will allow for a meticulous and exhaustive consideration and debate by the lawmakers before passing it into law.
On whether the National Assembly would tinker with the Appropriation Bill, he said: “Our stand is that parliament is constitutionally empowered to make inputs. What the constitution enjoins Mr. President to lay before the National Assembly are mere estimates, not immutable figures. And once the estimates are so laid, their consideration becomes subject to the constitutionally prescribed modes of exercising legislative power.”
Apparently in a reaction to the House stance on the oil price benchmark for the budget, Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, told reporters in Abuja, shortly after the budget presentation, that the nation should exercise caution given the volatility of the global oil market.
She also said the 2013 Budget proposal made a provision for N971 billion for fuel subsidy as against the 2012 figure of N888 billion.
According to her, the sensible price that will shore up the economy and promote macro-economic stability is $75.
The minister stated that the benchmark "is based on an econometric module that estimates five and 10 years moving averages. Government cannot just take the number from anywhere; you have to have a basis for developing the benchmark," adding that the legislature "can smooth it out with a dollar here or there, to round it up”.
The $75 benchmark, the minister added, is similar to that of other oil-producing nations, citing Algeria's $37, Venezuela's $50, Qatar $55, Kuwait $60, Saudi Arabia $60, Oman $75 and Angola $77.
“What the government is proposing is within the ambit of what other countries are proposing; we don't see any country with $80 benchmark," she said.
According to her, the $75 benchmark "will safe guard what is precious to the economy, which is the macro-economic stability of the country,” adding: “If we go with a high benchmark, a lot of liquidity will be thrown into the system, because it’s not just the Federal Government we have to worry about.”
“The benchmark also affects the money that goes to the states; so even if you are trying to reduce Federal Government's fiscal deficit, the states are not under that obligation— they will be spending and that will throw up a lot of liquidity which can lead to higher inflation, depreciation of the exchange rate, which will force the Central Bank of Nigeria (CBN) governor to raise interest rates, which is not pleasant for the private sector," she said.