President Goodluck Jonathan
Abimbola Akosile and Ebere Nwiro
Experts on development and the economy have carried out a preliminary review of the Appropriation Bill 2013 based on President Goodluck Jonathan’s address to the National Assembly, with calls for increased allocation to capital projects and agriculture.
The detailed study was carried out by the Centre for Social Justice (CSJ), a non-governmental organisation headed by Mr. Eze Onyekpere, for the Citizens Wealth Platform (CWP).
In the review, Onyekpere, a legal practitioner, examined key issues in the N4.92 trillion budget proposal and made recommendations to the National Assembly and other concerned stakeholders in the polity.
According to the review, “the 2013 Appropriation Bill continues with the tradition of the 2012 Budget as a budget of fiscal consolidation with inclusive growth and still anchored on four major pillars namely: macroeconomic stability, structural reforms; governance and institutions and investing in priority sectors.
“It is based on the following macroeconomic indicators: oil production of 2.53 million barrels per day (mbpd); a benchmark oil price of $75 per barrel; exchange rate of N160/US$; projected growth rate of 6.5 per cent down from the 6.85 per cent proposed in the Fiscal Strategy Paper. Like the MTEF, there is no projected inflation rate. The aggregate expenditure is N4.92 trillion, which is a 5 per cent increase over the N4.7 trillion appropriated in 2012.
“The budget is coming at a time Nigeria's economic outlook has been upgraded by Nigeria’s inclusion in the J.P Morgan’s Emerging Market Bonds Index signifying increased investor confidence in the economy”, the experts noted.
The review hailed the early presentation of the budget on October 10 as definitely a step in the right direction, which would improve capital budget implementation in 2013 and enhance the realisation of fiscal targets.
It noted that capital expenditure, at 31.3 per cent of the budget, although an increase from the appropriation in 2012, was not the way to go for a country with a huge infrastructure deficit. The expectation is for increased allocation to capital expenditure, rising to a minimum of 40 per cent of the overall budget in the medium term, Onyekpere and his team added.
“The allocation to education (even though it excludes allocations for Universal Basic Education Commission, Education Trust Fund and Petroleum Technology Development Trust Fund) is very low at 8.67 per cent of the budget, and has not met the international standard of 26 per cent of the budget. Coming at a time of the virtual collapse of every segment of the education sector, it needs to be upwardly reviewed.
“The allocation to the health sector at 5.68 per cent is paltry considering the need for resources to meet the targets set nationally and internationally for the health sector requiring at least 15 per cent of the budget.
“Agriculture and Rural Development at 1.65 per cent of the budget is extremely a meagre allocation. Considering its contribution to the GDP projected at 38.4 per cent of the GDP in 2013 and the new concept of value chains improvement, the budgetary provision should be enhanced.
“The allocations to security (Defence and Police) of over 13.5 per cent of the budget appear like throwing money at national problems. Despite increased appropriations in recent years, the security situation has degenerated. Thus, what is needed to contain the security threats may not necessarily be increased funding but the application of more intelligent solutions and greater value for money management of available resources”, the experts added.
Among recommendations from the above analysis, the National Assembly was urged to review the estimates, cut down areas of waste and increase the capital budget, especially for critical infrastructure in roads, railways and for human development in health and education, etc, while the budget for agriculture should also be increased.
“The National Assembly should reduce its N150 billion allocation to N100 billion. It should expeditiously consider and approve the Petroleum Industry Bill to ensure that the reforms will be in place before the end of the first half of 2013. The benchmarks for oil production and the price of crude are realistic and should be retained.
“The idea of financial releases by the Ministry of Finance for projects without cash backing is unsupportable by the clear provisions of the FRA. It is either budgeted sums are released or not.
“The Bureau of Public Procurement and relevant budget monitoring agencies should conduct a comprehensive study on the factors anchoring the perennial poor capital budget implementation and use the results and recommendations of the study to cure the existing mischief in the budget implementation system.
“The President should immediately inaugurate the National Council on Public Procurement, while the Board of SURE-P should comprehensively report to Nigerians about their stewardship and management of funds entrusted to their care”, the review recommended.
Onyekpere also recommended that gender targets, indicators and benchmarks should be mainstreamed in the future formulation of the budget activities of all MDAs, while the executive should present the revenue expected from gas and their proposal for external borrowing.