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Ending Nigeria's Annual Budget Impasse

27 Feb 2013

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By Odilim Enwegbara

Effective budgeting requires clear set deadlines enshrined in the new constitution

Angry—yes, the Nigerian people are. Deepening the widespread anger is not only because there's little being done to put the battered economy on the growth path and save millions of Nigerians from endemic poverty, especially watching an unending 2013 budget bickering. It is because, as most have now come to conclude, the President's increasing preoccupation with his 2015 reelection.

Gauging how widespread this bottled up anger has become was the raging mob I met recently. In their countless justifications to why this is administration seems to care less about fixing the economy, the anger came down to this: ''If the bread and butter problem of the poor cannot be taken seriously; if millions of jobless youth roaming the streets cannot be provided jobs or believe that there are chances of getting employed in the near future, as the delay in signing the 2013 budget shows, then, what should be the plausible explanation for one to believe in this government? Should any serious government be such reluctant to negotiate differences with lawmakers, at least demonstrate readiness to meet them halfway?''

After listening to the emotions accompanying their disappointment, even though I felt short of words, I took the courage to see reasons with them. Sitting on the fence, I agreed isn't what makes a great leader, especially in a country where the earlier signing of budget could be a matter of life-and-death. Practical negotiation skills for great leaders are only second to the ability to hiring the best team as the greatest leadership gifts. And every great leader has them in abundance. It was out of the abundance of these negotiation skills that President Franklin Roosevelt was able to cleanup America's economic mess notwithstanding the ferociously uncompromising Congress he encountered. China's Deng Xiaoping not only stopped China from hitting the bottom pit but also took the provincial economy of his beloved China to a dominant position into the world stage because he was a master negotiator, outsmarting those change-averse communist comrades.

Okay, let's for the benefit of doubt exonerate the President from these blames, especially because he already has an economic team supposedly responsible for engaging the lawmakers to the extent of ensuring that the bickering over the appropriation bill is never allowed to get messier. What should have been better achievements a proactive economic team to make than successfully courting and carrying members of the various committees of both chambers along in the team's effort to getting the budget passed in its favor, rather than allowing the absence of negotiation deteriorate to the present blackmail and mud-throwing?

Mind-boggling is the least way to describe the ongoing blame game, especially the bombshell from President's Chief Economic Adviser, Mr. Nwanze Okidegbe, who few days ago announced that the President's reluctance to sign the budget has more to do with ''the non-inclusion of budgetary vote for the Securities and Exchange Commission (SEC).'' Unbelievably Mr. Okidegbe proudly told Nigerians, you know what, this train on which over 170 million of you onboard should remain grounded until the 2013 budget captures the SEC. In other words, he believes that if this is a serious country the economic team should be applauded for continuing the face-off.

If a team hired to turnaround a badly managed economy, but after 18 months on the job, rather than turn it around, it has made matters worse, should the team be singing its own songs of praises or should become sober for its failure? In a serious country, which Nigeria is not yet, especially where the President knows that his presidency is fully accountable to the people who elected him, not to anyone else, shouldn't he compel himself to choose between the people and his incompetent economic team? In short, are 18 months not enough time to replace an inept economic team with a better new team made up of men and women with extraordinary vision and mental rigor, with patriotic and selfless toughness, and with extreme boldness and out of the box mentality? Or are there no lessons to learn from Stephen Keshi's recent excellent outing that won the country the 2013 AFCON Cup? Had he insisted in fielding the country's big names, should he have won the cup? Shouldn't a President eyeing a reelection in 2015 come to recognize that should the economy under his watch continue on the slippery slope, he should be ready to face angry electorate at the polls?

Budgeting in modern economies is usually started so early so as to have enough time not only for debating, passing, and singing the budget into law but also for its timely implementation. But would these countries have stuck to these strict deadlines, were they not enshrined in their constitutions? How to bring to an end budget bickering in Nigeria is by making sure the constitution sets clearly defined deadlines on: when to have the budget presented , when to have the budget passed, when to have the budget signed into law, and when to have the budget implementation commenced and terminated.

Like it's the case in modern economies, the constitutionally set deadlines for the budget should be: Presentation of budget not to exceed 30 April; passage not to exceed September 30; signing into law not to exceed October 30; and implementation to begin exactly on January 1 and to end December 31 of the fiscal year. Procurement and implementation planning should be timed not to exceed December 15.

In every modern democracy where the efforts of lawmakers it is to ensure that the country's budget always reflects grassroots interests, why should our own lawmakers' same efforts earning them such bad name as 'budget mutilators?' Should we have to go to such extent of cheap naming calling and mud-throwing by our so-called 'all-knowing' technocrats and expect to grow our democracy? In other words, if we continue allowing these technocrats get away with such argument that before the President signs the budget, the 'dirty hands' of the lawmakers that have touched the budget should be thorough bathe off the budget, then, should what we have in place rather than a representative democracy becomes a democratic dictatorship? Therefore, allowing this dangerous development to go on is to make some unelected technocrats believe they love Nigeria and Nigerians more than the elected representatives of the people.

In amending the 2007 Fiscal Responsibility Act, besides ensuring that 90 per cent is the minimum capital budget to be implemented in any given fiscal year, also on no account should any unspent capital budget be spent on recurrent budget. In other words, any unspent capital budget should be returned to the treasury if and only if it is specifically for future capital projects. That is the only way to make it extremely difficult for the executive to stall the capital spending either because it is deficit financed or because it is how to buy enough time to postpone the implementation of the capital projects.

The amended constitution should also mandate governments at all levels to ensure that not less than 50 per cent of their recurrent spending is internally generated. This will require that no revenue generating agency of government is allowed to dip its hands into the revenues it generates since all agencies of government will henceforth have their annual expenditures captured in each year's appropriation act. For this reason, Section 22 (2) of the 2007 Fiscal Responsibility Act which reads, ‘‘The balance of the operating surplus shall be paid into the Consolidate Revenue Fund [CRF] of the Federal Government…'' when amended should read, ''All the revenues generated by government agencies shall be fully paid into the Consolidate Revenue Fund of the Federal Government.''

To ensure that the story that constituency projects delay each year's budget signing is no longer allowed to fly, constituency projects should be made legal in the constitution to the extent that the amended constitution should give room for a maximum of 5 per cent of the capital budget for constituency projects because constituency projects are in all modern representative democracies for playing a critical role in blossoming representative democracy. If not committing political suicide, of course, the absence of constituency projects as practical democratic dividends to their constituencies, lawmakers should ultimately be sending themselves on a political self exile. That is why accusations that constituency projects are responsible for delays in procurement planning should have no justifications whatsoever especially because procurement planning only begins after the appropriation bill is passed and signed into law. Should the maximum percentage of the budget to be spent on constituency projects be clearly captured in the constitution, the ongoing incessant blaming of constituency projects for retarding implementation planning should be ended. However, for purposes of accountability and transparency, never should our lawmakers be allowed either access to the constituency project money or to be allowed to directly influence constituency project implementation and supervision.

Also to be fully reemphasized is the mandatory Annual Cash Plans and Disbursement Schedule as stated in Sections 25 and 26 of the 2007 FRA, which the Minister of Finance for no known reasons seems to be ignoring in her budget implementation planning. Had she come up with budget implementation cash flow template, obviously, there is no way she or the Federal Executive Council (FEC) should be illegally disbursing cash by turning their weekly Wednesday FEC meetings into a weekly lobbying ground for the arbitrary budget implementation, when obviously such meeting should have been purely where national economic policies and strategies are appraised and sharpened.

Bringing these unending controversies to an end through proactive lawmaking requires that both the legislative and executive branches are on the same page when it comes to thinking through the annual budgeting. For this to happen, the legislative branch should establish the National Assembly Budget Office (NABO). Like US Congressional Budget Office (CBO), NABO should have its core staff composed of some of Nigeria's finest economists and public policy specialists. So that besides their presence helping moderate the current executive's excesses, they should be fully responsible for carrying out the proper re-ordering of budgetary provisions, including setting targets: for the overall budgetary revenues and expenditures; for fiscal deficit and public debt financing; and above all, for providing the lawmakers with authentic periodic forecasts and analyses of the global economic trends as they strategically affect budget planning in Nigeria. In short, the presence NABO should as a matter of fact immediately put a stop to the insults our so-called know-it-all technocrats currently heap on the country's custodians of its economic and political sovereignty.

Enwegbara is a MIT educated specialist in money and financial matters. He can be reached by phone at: 07038501486.

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