Mr. Frank Nweke Jr

‘The Executive and Legislature Should Not be at Loggerhead over Budget Implementation’
 
Following the recent face-off between the executive and National Assembly over budget implementation, Director-General, Nigeria Economic Summit Group (NESG), Mr. Frank Nweke Jr, tells Kunle Aderinokun that since the executive has the responsibility of running the budget, it has the final say on implementation   
 
 
What do you think about budget implementation in Nigeria?

I am not unaware of the recent controversy trailing the issue of budget implementation in Nigeria. It is not new, having had the privilege of serving in the cabinet at some point. I understand the dynamic over the implementation of budget and the difficulties that could be encountered in trying to ensure efficient of effective budget implementation.
But I wouldn’t say that I was very happy with the approach of the National Assembly during the past couple of weeks when they then threatened to impeach the president on account of non-budget implementation. And the reason for that is not far-fetched. I think that with the security situation in our country today, the poverty situation, the social situation, political situation, I didn’t think it was appropriate for them to try to further overheat the polity in that way. Especially because the budget had been signed into law only four months prior and if you look at all the issues you have to deal with in trying to implement budget, these are pretty cumbersome issues.
Now I am not holding brief for either the executive or legislature, but I think that over a four-month period and with the comments by the minister of finance, I think it is understandable that there difficulties. Whilst we want things to be better, but for a four-month period, I think what has been achieved is quite good.
 
Do you think the National Assembly was really involved in the formulation of the budget?

I do know from experience that the executive takes steps to consult a cross-section of stakeholders, not least, the National Assembly for obvious reason- the budget will eventually go to them for consideration and for passage into law. I know that the federal government normally consults civil society groups, business associations and even individuals in some cases. I do recall that the challenge has always been the issue of who has responsibility for budget planning, which has responsibility for initiating expenditure and who has responsibility for passing the budget. And in my view, in our constitution, it is the executive that has responsibility for economic management, it is the executive that has responsibility for budget planning, it is the executive that has the responsibility to initiate expenditure, whilst it is the clear and express responsibility of the National Assembly to pass the budget into law. I can even go further to say that whilst they may reduce the size of an expenditure plan, they may not increase it. However, my position is very clear and that is, why is we are afraid as a people, as government, as Nigerians, to test our constitution? If the executive feels for instance that the National Assembly is over-reaching itself, what stops the executive from seeking interpretation of the relevant portions of our constitution from the Supreme Court –the third arm of government- or indeed, why can’t civil society initiate such as action, or why can’t the National Assembly, if they feel that they are on their right, why can’t they also seek interpretation. Why are we afraid to seek interpretation of our constitution?
 
What role has the NESG as an organisation representing the private sector been playing, in budget formulation?

As a matter of fact, the NESG is an advocacy group representing a significant portion of Nigeria’s private sector and our focus is the adoption of policies conducive to good governance. For instance, we have been concerned about things like the quality of our infrastructure, the issue of security, jobs, social policy because of their potential to impact on human capital development. Today, I can say that our members are very concerned about the insecurity in the nation and indeed, all citizens of this country. We have had reasons to make representation to government because some of members who are involved in manufacturing and production activities have had their businesses seriously undermined. Today they do not have access to markets in northern parts of the country.
What has then happened is that because they cannot sell as much as they used to, they have had to reduce their production activities. In reducing their production activities, they had to lay off people and this has caused a lot of altercation between them and the people being laid off. That exacerbates the unemployment situation, reinforces the poverty situation and these are things we don’t need right now. If you look at the underlying causes of the crisis in the north, in the South-south, or even in the South-east where kidnapping is rampant, it points to the fact that over several years, we failed to make the kind of investment needed in the social sector, in education and healthcare. So if you have a situation of insecurity, which has undermined business, the capacity to produce and keep people in employment, you are exacerbating the poverty situation and the social dimensions of the insecurity.
So, as a group for instance, we are deeply concerned about this. Also look at the issue of infrastructure, while will it take a truck 11 days to carry goods from Lagos to northern parts of this country? These are the types of reports we get from our members. So when we engage with the ministry of finance and the budget office on the budget, we are harping on things such as infrastructure , security, investment in the social welfare, education, skills development, vocational training.
I had a meeting with some officials from the World Bank, part of it was the inability of graduates to be useful or the fact that most fresh graduates are hardly useful to any employer. So they came to us to develop a programme for impacting basic writing and communication skills for post NYSC graduates. So, those are the kind of thing that we would be interested in, on an on-going basis. Power? I need not say anything because whether as a business or individual, all of us know what is happening in that sector. Of course, we would continue to push for government to make the necessary investment and also to create a conducive environment for the private sector to take advantage of the opportunities that are there.
 
There have always been controversies over the composition of the budget- recurrent and capital. Do you think the budget is aligned more towards recurrent?

Absolutely, the structure of our national expenditure is hardly sustainable. There is no way we can develop this country with the structure of our expenditure. A situation where you spend nearly 80 per cent of your entire earnings on recurrent expenditure and overhead, leaving the bulk of your citizens without amenities, without infrastructure, without critical social services, there is no where you can go with that.

Caption: Mr. Frank Nweke Jr

 
Following the recent face-off between the executive and National Assembly over budget implementation, Director-General, Nigeria Economic Summit Group (NESG), Mr. Frank Nweke Jr, tells Kunle Aderinokun that since the executive has the responsibility of running the budget, it has the final say on implementation   
 
 
What do you think about budget implementation in Nigeria?

I am not unaware of the recent controversy trailing the issue of budget implementation in Nigeria. It is not new, having had the privilege of serving in the cabinet at some point. I understand the dynamic over the implementation of budget and the difficulties that could be encountered in trying to ensure efficient of effective budget implementation.

But I wouldn’t say that I was very happy with the approach of the National Assembly during the past couple of weeks when they then threatened to impeach the president on account of non-budget implementation. And the reason for that is not far-fetched. I think that with the security situation in our country today, the poverty situation, the social situation, political situation, I didn’t think it was appropriate for them to try to further overheat the polity in that way.

Especially because the budget had been signed into law only four months prior and if you look at all the issues you have to deal with in trying to implement budget, these are pretty cumbersome issues.
Now I am not holding brief for either the executive or legislature, but I think that over a four-month period and with the comments by the minister of finance, I think it is understandable that there difficulties. Whilst we want things to be better, but for a four-month period, I think what has been achieved is quite good.
 
Do you think the National Assembly was really involved in the formulation of the budget?

I do know from experience that the executive takes steps to consult a cross-section of stakeholders, not least, the National Assembly for obvious reason- the budget will eventually go to them for consideration and for passage into law. I know that the federal government normally consults civil society groups, business associations and even individuals in some cases. I do recall that the challenge has always been the issue of who has responsibility for budget planning, which has responsibility for initiating expenditure and who has responsibility for passing the budget.

And in my view, in our constitution, it is the executive that has responsibility for economic management, it is the executive that has responsibility for budget planning, it is the executive that has the responsibility to initiate expenditure, whilst it is the clear and express responsibility of the National Assembly to pass the budget into law. I can even go further to say that whilst they may reduce the size of an expenditure plan, they may not increase it. However, my position is very clear and that is, why is we are afraid as a people, as government, as Nigerians, to test our constitution? If the executive feels for instance that the National Assembly is over-reaching itself, what stops the executive from seeking interpretation of the relevant portions of our constitution from the Supreme Court –the third arm of government- or indeed, why can’t civil society initiate such as action, or why can’t the National Assembly, if they feel that they are on their right, why can’t they also seek interpretation. Why are we afraid to seek interpretation of our constitution?
 
What role has the NESG as an organisation representing the private sector been playing, in budget formulation?

As a matter of fact, the NESG is an advocacy group representing a significant portion of Nigeria’s private sector and our focus is the adoption of policies conducive to good governance. For instance, we have been concerned about things like the quality of our infrastructure, the issue of security, jobs, social policy because of their potential to impact on human capital development.

Today, I can say that our members are very concerned about the insecurity in the nation and indeed, all citizens of this country. We have had reasons to make representation to government because some of members who are involved in manufacturing and production activities have had their businesses seriously undermined. Today they do not have access to markets in northern parts of the country.
What has then happened is that because they cannot sell as much as they used to, they have had to reduce their production activities.

In reducing their production activities, they had to lay off people and this has caused a lot of altercation between them and the people being laid off. That exacerbates the unemployment situation, reinforces the poverty situation and these are things we don’t need right now. If you look at the underlying causes of the crisis in the north, in the South-south, or even in the South-east where kidnapping is rampant, it points to the fact that over several years, we failed to make the kind of investment needed in the social sector, in education and healthcare. So if you have a situation of insecurity, which has undermined business, the capacity to produce and keep people in employment, you are exacerbating the poverty situation and the social dimensions of the insecurity.

So, as a group for instance, we are deeply concerned about this. Also look at the issue of infrastructure, while will it take a truck 11 days to carry goods from Lagos to northern parts of this country? These are the types of reports we get from our members. So when we engage with the ministry of finance and the budget office on the budget, we are harping on things such as infrastructure , security, investment in the social welfare, education, skills development, vocational training.

I had a meeting with some officials from the World Bank, part of it was the inability of graduates to be useful or the fact that most fresh graduates are hardly useful to any employer. So they came to us to develop a programme for impacting basic writing and communication skills for post NYSC graduates. So, those are the kind of thing that we would be interested in, on an on-going basis. Power? I need not say anything because whether as a business or individual, all of us know what is happening in that sector. Of course, we would continue to push for government to make the necessary investment and also to create a conducive environment for the private sector to take advantage of the opportunities that are there.
 
There have always been controversies over the composition of the budget- recurrent and capital. Do you think the budget is aligned more towards recurrent?

Absolutely, the structure of our national expenditure is hardly sustainable. There is no way we can develop this country with the structure of our expenditure. A situation where you spend nearly 80 per cent of your entire earnings on recurrent expenditure and overhead, leaving the bulk of your citizens without amenities, without infrastructure, without critical social services, there is no where you can go with that.

Unfortunately, it is very easy to get people to attack you and all sort of things, but at the time that other parts of the world were reducing their personnel cost, reducing their recurrent budget, we chose to increase our own. And labour would hear none of it and so with others that don’t understand what the issue is all about. But today where are we? A situation where you increase the minimum wage by almost 60 per cent is just incredible. So it is the manifestation of some of those actions that we are seeing today.

One critical question, which a lot of people have not answered till today is- what is the total number of civil servants we have in this country? Even if you were to aggregate the federal and states together? They are less than one million and yet, we spend our entire earnings paying their salaries. So where is the funding for capital expenditure going to come from? But another dimension is the quality of our expenditure as well. There are certain sectors from which tremendous savings could be made. And I know that there is a committee headed by Prof Anya Anya, which looked at the issue of the quality of public expenditures and made some very far-reaching recommendations.

More recently as well, the federal government had also set up a committee headed by Steve Oronsaye to also look at the issue of the proliferation of parastatals and government agencies and see where we can make savings. They have also made extensive recommendations. So the question remains what will government do with all of these things? But I want to say that base on the document that the minister of finance released recently, showing the medium term expenditure framework, it is quite encouraging because it takes cognisance of the need to reduce fiscal deficit. She is also taking congnisance of the need to reduce the ratio of recurrent to capital budget and further increasing capital allocation to about 31.5 per cent. She is also taking congnisance of the need to reduce public borrowing and the need to also pay local contractors.
Now from the perspective of planning, I want to commend her. But we do know clearly that it is not going to stop there. This budget, when it is ready, will go to the National Assembly. So the question will be, what will the National Assembly do with it? We hope that the budget will get to the National Assembly on time because when you talk about delays in the passage of budget, the executive is also culpable. So if the budget is able to get to the National Assembly by September this year, I tell you, it would be a landmark and so the National Assembly will have time to consider it, pass it and hopefully, maybe for the first time, we can start budget implementation from January and run till through December and avoid a situation whereby the thing spills over into the following year.
 
Part of the reasons the budget is usually over-bloated is the tinkering by the National Assembly tinkers. What is your comment on this?

For me, I am very clear in my mind that because you have a ministry for planning, you have a budget office; you have a ministry of finance, who are professionals and have a better view of the revenue profile, they understand the dynamics and know how to structure any expenditure plans. I believe that it is the responsibility of the executive to manage the economy of this country. I am not in any way suggesting that the National Assembly must not do their oversight function, but I am saying that the people whose responsibility it is constitutionally must be allowed to do their job. And that each time that people, out of personal interest, had distorted the budget, it completely destroys every planning effort that had been put in place by government. It has shown to be counterproductive. That is why I said earlier that we need to challenge the interpretation of the constitution by the National Assembly. The executive can seek interpretation of that section of the budget. Civil society can seek interpretation of that aspect of the budget; the National Assembly can also seek interpretation of that aspect of the budget. While we have not done it so far is what I don’t understand.
 
Recently the minister of finance said the budget was implemented 56 per cent and the National Assembly disagreed. What do you think of the entire scenario?

First of all, I find it entirely frustrating when the impression is created that the executive and legislature are in competition. These are two distinct arms of government, but they are all in the service of the Nigerian people. I believe that they should have a common interest which should be the development of the country. And I would also encourage both the executive and legislature to continue to explore ways to better serve the Nigeria people.
But when you look at the entire budget cycle, you see that we must seek to improve the way we do things. Now with respect to the issue of budget implementation, I am saying, based on statements and personal conversation with the ministry of finance, to the effect that certain amount had been released, and that amount of money, represented 56 per cent of the entire funds released at that point in time. It is just four months since the budget was signed into law and I am saying that, if that is the case, them it is not bad. But can we do better? Absolutely we can do better. I know that with Ngozi’s track record, she is committed to making things happen, working with her colleagues. I believe that the administration is under significant pressure and therefore I will be surprised if the entire ministers don’t feel this pressure to perform to show that the transformation agenda is on course.
 
How do you think the relationship between the Executive and National Assembly in terms of budget can be smoothened?

First of all, it is important for both arms of government to understand that they are not in competition. They cannot afford to be in competition. Secondly, I believe that it is appropriate for both arms to engage in ongoing consultations. That is the only way you can build trust. I believe that if they are more involved in the planning, it would make for much easier and smoother passage of the appropriation bill and for easier implementation of the appropriation law when it is eventually passed. And I know that there was time when we had a budget office in the National Assembly where there are professionals that have the necessary background in economic and development planning and therefore are in a better position to engage on behalf of the National Assembly on a regular basis.

Unfortunately, it is very easy to get people to attack you and all sort of things, but at the time that other parts of the world were reducing their personnel cost, reducing their recurrent budget, we chose to increase our own. And labour would hear none of it and so with others that don’t understand what the issue is all about. But today where are we? A situation where you increase the minimum wage by almost 60 per cent is just incredible. So it is the manifestation of some of those actions that we are seeing today.

One critical question, which a lot of people have not answered till today is- what is the total number of civil servants we have in this country? Even if you were to aggregate the federal and states together? They are less than one million and yet, we spend our entire earnings paying their salaries. So where is the funding for capital expenditure going to come from? But another dimension is the quality of our expenditure as well. There are certain sectors from which tremendous savings could be made. And I know that there is a committee headed by Prof Anya Anya, which looked at the issue of the quality of public expenditures and made some very far-reaching recommendations.

More recently as well, the federal government had also set up a committee headed by Steve Oronsaye to also look at the issue of the proliferation of parastatals and government agencies and see where we can make savings. They have also made extensive recommendations. So the question remains what will government do with all of these things? But I want to say that base on the document that the minister of finance released recently, showing the medium term expenditure framework, it is quite encouraging because it takes cognisance of the need to reduce fiscal deficit. She is also taking congnisance of the need to reduce the ratio of recurrent to capital budget and further increasing capital allocation to about 31.5 per cent. She is also taking congnisance of the need to reduce public borrowing and the need to also pay local contractors.
Now from the perspective of planning, I want to commend her. But we do know clearly that it is not going to stop there. This budget, when it is ready, will go to the National Assembly. So the question will be, what will the National Assembly do with it? We hope that the budget will get to the National Assembly on time because when you talk about delays in the passage of budget, the executive is also culpable. So if the budget is able to get to the National Assembly by September this year, I tell you, it would be a landmark and so the National Assembly will have time to consider it, pass it and hopefully, maybe for the first time, we can start budget implementation from January and run till through December and avoid a situation whereby the thing spills over into the following year.
 
Part of the reasons the budget is usually over-bloated is the tinkering by the National Assembly tinkers. What is your comment on this?

For me, I am very clear in my mind that because you have a ministry for planning, you have a budget office; you have a ministry of finance, who are professionals and have a better view of the revenue profile, they understand the dynamics and know how to structure any expenditure plans. I believe that it is the responsibility of the executive to manage the economy of this country. I am not in any way suggesting that the National Assembly must not do their oversight function, but I am saying that the people whose responsibility it is constitutionally must be allowed to do their job. And that each time that people, out of personal interest, had distorted the budget, it completely destroys every planning effort that had been put in place by government. It has shown to be counterproductive. That is why I said earlier that we need to challenge the interpretation of the constitution by the National Assembly. The executive can seek interpretation of that section of the budget. Civil society can seek interpretation of that aspect of the budget; the National Assembly can also seek interpretation of that aspect of the budget. While we have not done it so far is what I don’t understand.
 
Recently the minister of finance said the budget was implemented 56 per cent and the National Assembly disagreed. What do you think of the entire scenario?

First of all, I find it entirely frustrating when the impression is created that the executive and legislature are in competition. These are two distinct arms of government, but they are all in the service of the Nigerian people. I believe that they should have a common interest which should be the development of the country. And I would also encourage both the executive and legislature to continue to explore ways to better serve the Nigeria people.
But when you look at the entire budget cycle, you see that we must seek to improve the way we do things. Now with respect to the issue of budget implementation, I am saying, based on statements and personal conversation with the ministry of finance, to the effect that certain amount had been released, and that amount of money, represented 56 per cent of the entire funds released at that point in time. It is just four months since the budget was signed into law and I am saying that, if that is the case, them it is not bad. But can we do better? Absolutely we can do better. I know that with Ngozi’s track record, she is committed to making things happen, working with her colleagues. I believe that the administration is under significant pressure and therefore I will be surprised if the entire ministers don’t feel this pressure to perform to show that the transformation agenda is on course.
 
How do you think the relationship between the Executive and National Assembly in terms of budget can be smoothened?

First of all, it is important for both arms of government to understand that they are not in competition. They cannot afford to be in competition. Secondly, I believe that it is appropriate for both arms to engage in ongoing consultations. That is the only way you can build trust. I believe that if they are more involved in the planning, it would make for much easier and smoother passage of the appropriation bill and for easier implementation of the appropriation law when it is eventually passed. And I know that there was time when we had a budget office in the National Assembly where there are professionals that have the necessary background in economic and development planning and therefore are in a better position to engage on behalf of the National Assembly on a regular basis.

But when you look at the entire budget cycle, you see that we must seek to improve the way we do things. Now with respect to the issue of budget implementation, I am saying, based on statements and personal conversation with the ministry of finance, to the effect that certain amount had been released, and that amount of money, represented 56 per cent of the entire funds released at that point in time. It is just four months since the budget was signed into law and I am saying that, if that is the case, them it is not bad. But can we do better? Absolutely we can do better. I know that with Ngozi’s track record, she is committed to making things happen, working with her colleagues. I believe that the administration is under significant pressure and therefore I will be surprised if the entire ministers don’t feel this pressure to perform to show that the transformation agenda is on course.
 
How do you think the relationship between the Executive and National Assembly in terms of budget can be smoothened?

First of all, it is important for both arms of government to understand that they are not in competition. They cannot afford to be in competition. Secondly, I believe that it is appropriate for both arms to engage in ongoing consultations. That is the only way you can build trust. I believe that if they are more involved in the planning, it would make for much easier and smoother passage of the appropriation bill and for easier implementation of the appropriation law when it is eventually passed. And I know that there was time when we had a budget office in the National Assembly where there are professionals that have the necessary background in economic and development planning and therefore are in a better position to engage on behalf of the National Assembly on a regular basis.