Last year when the eighth Senate, under the leadership of Dr. Bukola Saraki, rejected the 2017-2019 Medium Term Expenditure Framework and the Fiscal Strategy Paper (FSP) submitted by President Muhammadu Buhari, the upper chamber was subjected to media attacks. Some described the decision of the Senate as unpatriotic.
The decision of the Senate to reject the MTEF came barely 48 hours after it rejected the president’s borrowing plan over technical errors for non-attachment of details of the plan. The decision to reject the MTEF proposal was pursuant to the adoption of a Point of Order raised by former Senate Majority Leader, Senator Mohammed Ali Ndume, at the plenary. Ndume had described the MTEF as an “empty” document lacking in details.
The MTEF is an annual, three-year rolling expenditure plan. It sets out the medium-term expenditure priorities and hard budget constraints against which sector plans can be developed and refined. The MTEF also contains outcome criteria for the purpose of performance monitoring. It sets out the financial details upon which the budget for the succeeding year is predicated. In summary, it is the financial paper which serves as a working tool for the budget. It would be right to say that there would be no budget without the MTEF
The media and civil society organisations in their seeming contempt for the Red Chamber abused the Senate action to no limit. But the eighth Senate, which comprises of seasoned technocrats, business moguls, former governors and politicians, stood its ground and demanded that the right thing be done. Some critics questioned the rational behind the Senate’s rejection of the MTEF.
Some argued that since the International Monetary Fund and the civil society groups had accepted the financial details of the MTEF, the Senate should just rubber stamp the financial document that would determine the 2017 budget. The senators refused to do that because they understand that they were elected to protect the people’s interest. The Senate knows the problems of the people and is determined to effect a reasonable change with the 2017 budget.
The eighth Senate, with its belief that the MTEF as submitted by the executive was unrealistic, queried how feasible it would be to fix the foreign exchange rate for 2017 at N290 to the United States Dollar and the crude oil production at over 2.1 million barrels per day without taking adequate measures to address the militancy in the Niger Delta.
However, three months after Buhari forwarded the 2017, 2018 and 2019 MTEF and FSP to both the Senate and House of Representatives for approval, the upper chamber has after thorough deliberations finally passed the document.
First, the upper chamber, with the interest of the nation at heart, approved the adoption of N305 to the US dollar as the exchange rate as proposed by the executive for the 2017 budget. It also approved $44.5 per barrel as oil benchmark price for 2017 budget as against the $42.50 per barrel requested by the president. This was in view of the continuous rise of the price of crude on the international market.
Regarding the foreign exchange, after harmonising with the House of Representatives, the Senate directed that the Central Bank of Nigeria should, as a matter of urgency, initiate measures to close the gap between the parallel market and the official exchange rates.
Aside from increasing the oil benchmark from $42.50 per barrel, as requested by the executive, to $44.5 per barrel for 2017 budget, all other projections by the executive were retained by the Senate.
When the executive asked for nearly $30 billion loan, it did not tie the loan to specific projects, which was one of the reasons the request was turned down. But in approving both domestic and foreign borrowings, the Senate insisted that they should be on project-tied basis and that for additional borrowing, government must remain focused and ensure it used the funds for critical projects that will increase productivity and also contribute to financing the debt.
Before giving its nod for the near $30 billion, the Senate said, “Globally acceptable ratio of debt to GDP is 56 per cent. Nigeria still operates within its country specific ratio of 19.39 per cent of debt to GDP. This implies that Nigeria can still potentially borrow or increase its country borrowing limit.
“Total outstanding external debt stock is at $11.26 billion, thus, Nigeria’s external debt has been rising at an average of 9.2 per cent per annum. In the case of domestic debt, the total domestic debt stock of the federal government is $37.44 billion. In 2017 FGN is projecting an additional borrowing of N2.321 trillion, comprising N1.253 trillion (domestic) and N841.067 trillion (foreign).”
What are the lessons from this? It simply shows the eighth Senate as not only matured, but also in tune with the realities on ground. The Senate is showing capacity to do what is right and to say no to what is wrong. It is what the late Chinua Achebe would describe as “rebuff a child with the right hand and accept the child back with the left hand.”
The framers of the 1999 Constitution were not engaged in a fantasy when they stated clearly that the National Assembly shall approve all budgetary expenditures. And they were not oblivious of the importance of the MTEF. It is clearly stated that the MTEF shall dictate any budgetary provision. It is not ideal that the MTEF should be approved after the budget has been submitted. The proper thing is that the MTEF should guide the budget preparation, hence it is expected that it should be submitted at least two to three months before the budget is introduced. It is, therefore, logical that with the passage of the MTEF, the debate on the 2017 budget can commence.
In all, it should be seen that there is no friction between the executive and legislature on policy. One thing is common to both arms of government: both are out to improve the welfare and well-being of the citizenry. No arm of government should be seen to be championing hardship upon the electorate. The Presidency and the National Assembly are partners in progress in the task of moving Nigeria forward.
The passage of the MTEF documents that paved the way for Senate deliberations on the 2017 budget at the plenary last week shows the eighth Senate as not only capable of carrying out its legislative duties, but also disposed to transparency and passionate about issues that affect the welfare of Nigerians.
–– Okocha is Special Assistant to the Senate President on Print Media.
