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The Budget Controversy

17 Feb 2013

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As the Executive and National Assembly strive to  resolve the controversy brewing between them over the 2013 budget, Vincent Obia examines the consequences for the fiscal year, particularly now that the nation has lost the advantage of two months early preparation and submission of the budget to the lawmakers in October last year would have provided…

When  on  December 20 last year the National Assembly passed the 2013 budget, which President Goodluck Jonathan had presented to the legislature last October 10, many Nigerians were pleasantly surprised that for the first in the Fourth Republic a budget year was about to run its full course. Under normal circumstances, a budget year runs from January 1 to December 31, but this has been a remote experience for the country since 1999. Presenting a budget to the federal legislature and getting it passed before the budget year was a feat no previous political dispensation since 1999 had achieved.

Nigerians, thus, had good reason to hope that the 2013 budget would run from January 1 to December 31. But, alas, they were wrong. The hope of an unabridged budget year has been dashed once again. The nation has already lost two months advantage.

The 2013 budget is dogged by controversy, a ding-dong battle of wits has raged since December last year over the budget. The National Assembly said it passed a harmonised version of the budget on December 20 and remitted same to President Jonathan the day after, December 21, before proceeding on the yuletide vacation. But it emerged soon after that what was remitted to the president was the appropriation bill yet to be backed by the breakdown that would form the basis of a presidential assent. Both the chairman of Senate Committee on Information, Mr. Eyinnaya Abaribe, and Special Adviser to the President on National Assembly Matters, Senator Joy Emodi, confirmed that much.

“The National Assembly has not transmitted the details of the budget. Until he sees the budget, it would be inappropriate to expect him to sign it,” Emodi was quoted as saying. “The president is not refusing to sign, as some have claimed. Even though the summary of the budget has been transmitted, he is waiting for the details. The details are still being put together by the relevant committees of the National Assembly.”

Chairman, House Appropriation Committee, Hon. John Enoh, was reported as saying, “The way we passed the budget and immediately went on break meant that a few things were left undone. Only broad figures were passed. Therefore, it would take about two weeks after we resume for us to put the detailed figures together. It is a misnomer to say that a budget has been approved.”

But the details were eventually transmitted to the president on January 15. The National Assembly members resumed from their recess on January 16. And since the details were sent to the president it has been a ding-dong affair between the two arms of government.
Many analysts were agreed that under the present situation, “Both in law and in fact, the budget has not been passed,” as Director, Centre for Social Justice, Mr. Eze Onyekwere, a lawyer, put it.
The president is yet to sign the budget, and the 30 days duration within which the legislature can override his assent will lapse on February 26 – if the non-working days are eliminated.

The present disagreements have dragged the country back to the same old problem of abridged fiscal year.
But a more ominous angle to the budget question, according to analysts, is the contentious provisos added to the budget by the National Assembly before its remittance to the president. They are replete with knotty innuendos that made many fear that the budget controversy might be drawn-out. There is the question of the oil price benchmark, which the legislators raised from the executive-fixed $75 per barrel to $79 per barrel.

Then there is the issue of zero allocation to the Securities and Exchange Commission, whose director general, Arunma Oteh, has had a running battle with the House of Representatives. She had been appointed head of SEC in January 2010 after series of trading scandals led to a crash of the capital market and loss of over 60 per cent of its value. No sooner had she taken charge than she removed Professor Ndi Okereke-Onyuike as chief executive of the Nigerian Stock Exchange and embarked on far-reaching reforms. Okereke-Onyuike was widely criticised for doing little to avert the abuses that wrecked the market during her nearly 10-year-tenure.

Oteh was suspended by the board of SEC in June last year following investigation into spending to mark 50 years of the capital market in Nigeria. But she was reinstated barely one month later on July 18 by the federal government, which cleared her of fraud but cautioned her for administrative lapses. The government said its decision was based on the recommendations of its external auditors, PricewaterhouseCoopers. The recall met resistance from some SEC staff and the House of Representatives.

She had been called back despite a recommendation for her sack by a House ad hoc committee that investigated the near collapse of the capital market, which had just submitted its report to the lower chamber at the time. There were mutual allegations of corruption between her and chairman of the House Committee on Capital Market and Institutions, Hon. Herman Hembe, with his deputy, Hon. Ifeanyi Azubougu, during the capital market probe.

Many believe the bickering between Oteh and the House was behind the National Assembly’s zero allocation to her agency. Though, the legislature alleged extra-budgetary expenses and the House had in recommending her sack said she was not qualified to head the SEC. But other agencies of government, like the Central Bank of Nigeria and Nigerian National Petroleum Corporation, were also accused of spending outside their budgets.

But SEC was singled out in clause 10 of the Appropriation Bill, which states, “All revenues, however described, including all fees received, fines, grants, budgetary provisions, and all internally generated revenue shall not be spent by the Securities and Exchange Commission for recurrent or capital purposes or for any other matter nor liabilities thereon incurred except with prior appropriation and approval by the National Assembly.”

It is trite law that appropriation must precede expenditure in all public institutions. But the way SEC was isolated seemed tantamount to its abolition, since it was stripped of ability to undertake essential functions like payment of salaries.

The president is also said to be withholding his assent from the budget because it was riddled with constituency projects. These issues in the 2013 budget controversy raise two critical questions. One, what are the limits of the legislature in matters of appropriation? And, is it customary for the legislature to send a passed budget to the president for his assent without including the necessary details?

Immediate past senator for Lagos East constituency of Lagos State, Senator Olorunimbe Mamora, sees nothing wrong with remitting the budget to the president in the hope of working out the details at a later date. “It is not unusual, particularly, where the legislature is working towards a deadline. I want to believe that the National Assembly wanted to pass the budget before proceeding on the Christmas/New Year holiday.”

Mamora believes where there is understanding between the legislature and the executive the essential volume, comprising the sectoral allocations, could be passed and forwarded to the president while the details are being worked on. He frowns on the disproportionate allocation of funds in favour of recurrent expenditure, saying, “We should work towards a situation where the capital budget would be big enough to address the infrastructural difficulties in our country.”

On the crude oil benchmark, Mamora says by increasing the rate, the legislature simply wanted to prevent the executive from having so much money that are hardly applied properly to solving the country’s myriad problems.  Mamora, however, believes, “It is the zeal with which the budget is implemented that matters because that is what will benefit the people at the end of the day.”

Implementation of the budget was the subject of fierce disagreements between the National Assembly and the executive last year. The legislature had criticised the executive for poor implementation of the budget, with the House of Representatives even threatening to impeach the president if the budget was not fully implemented.

The budget implementation controversy, it does seem, may resurface in the year, with the current delay in the enactment of the appropriation act.

As for the zero allocation issue, experts have proposed exploration of the legal window. Analysts say the executive should invoke the original jurisdiction of the Supreme Court to determine if the legislature has the powers to starve a government institution of funds, thereby effectively abolishing its existence without repealing the law setting it up.

There is also the allegation in some quarters that the legislators had hastened to pass the 2013 budget based on an understanding with the presidency that funds would be approved for the completion of their outstanding constituency projects for which about N100 billion was appropriated in last year’s budget. Indications are that the president might have reneged on the agreement, which fuelled fears of a protracted argument over the budget.

But whether the arguments about the budget are conducted in the court or on the political turf, the adverse effect will not be lost on the polity. The masses who are used to living like municipalities unto themselves, providing virtually everything for themselves – as Governor Adams Oshiomhole once said in his days as labour leader – would get more isolated.

All these carry serious implications for security and the foreign investment drive that government at various levels seem to treasure so much.   

Tags: Politics, Nigeria, Featured, Budget Controversy

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