By Uba Sani
You may argue that it is early days yet in the life of the 9th Senate of the Federal republic of Nigeria, presided over by Senator Ahmed Lawan and you will not be wrong. Inaugurated on 11, June, 2019, the current session of the upper chamber of the National Assembly is barely six weeks old. Even then, two days after our inauguration, we proceeded on a short recess to enable the leadership and the bureaucracy carry out some housekeeping, especially the allocation of offices to all Senators. We resumed duty on 2 July and were scheduled to embark on our annual long vacation on 31 July.
However, out of sense of duty and patriotism, we decided to delay the commencement of the Senate’s already scheduled annual vacation by one week to screen nominees for ministerial appointments by President Muhammadu Buhari.
We returned to Abuja to begin our legislative work late September. As such, the ninth Senate has effectively been on legislative duties for less than four months. Four months may be too short a time to deliver a verdict on an institution with a four-year lifespan; yet as the wise saying goes, the morning usually gives a hint on how the day would go. Therefore, while it may be hasty to embark on a wholesale evaluation of the performance of the Red Chamber for now, I think the Ahmed Lawan led Senate has demonstrated uncommon focus and determination to make a difference in the task of rebuilding Nigeria in the few months it has been in session.
I can authoritatively confirm to Nigerians and friends of Nigeria that since assuming Office as the President of the Senate, Distinguished Senator Ahmed Lawan has successfully deployed his legislative experience to shepherd all of us, his colleagues towards the patriotic duty of working for our nation and our people, starting from when he convinced us to delay our initial plan to go on vacation to screen President Buhari’s ministerial nominees. The 9th Senate has since followed the unprecedented step up with other achievements and initiatives with potential to totally transform the country in its relatively short term of existence.
Key among these is the successful passage of the amendment of the Deep Offshore and Inland Basin Production Sharing Contract 2004 (amendment) Bill 2019. The bill, originally part of the Petroleum Industry Bill, seeks to carry out amendment of the PSC Act which has been due since 2008. Foremost transparency agency in the extractive sector, the Nigeria Extractive Industries Transparency Initiative (NEITI) had in a policy brief published in March 2019 indicated that our beloved country lost between $16.0 billion and $28.61 billion in 10 years as a result of failure to carry out the review when it was due in 2008. According to NEITI, the Act should have been reviewed in 2004 when the price of oil crossed $20 per barrel and in January 2008 which was 15 years after the PSCs were signed.
This, NEITI noted, is in accordance with section 16 (1) of the Act which stipulates that “the provisions of the Act shall be subject to review to ensure that if the price of crude oil at any time exceeds $20 per barrel, real terms, the share of the Government of the Federation in the additional revenue shall be adjusted under the Production Sharing Contracts to such extent that the Production Sharing Contracts shall be economically beneficial to the Government of the Federation.” Indeed, there have been attempts to review the law, just like the other aspects of the PIB in the past. But it was believed that the International Oil Companies (IOCs) benefiting from lack of action over the Act had resisted the move, using strong lobby groups to ensure that such attempts were not successful.
But working with the executive and across party lines in both chambers of the National Assembly, Senator Ahmed Lawan broke the 10 years’ jinx with the successful passage of the amendment, which, according to some estimates, may result in additional income of $1.4 billion annually to Nigeria from oil exploration.
No wonder, President Muhammadu Buhari described the amendment as “a landmark moment for Nigeria,” when he signed it into law in London early November. A combination of complicity by Nigerian politicians and feet-dragging by oil companies have, for more than a quarter-century, conspired to keep taxes to the barest minimum above $20 per barrel – even as now the price is some three times the value. “For the first time under our amended law, 200 million Nigerians will start to receive a fair return on the surfeit of resources of our lands. Increased income will allow for new hospitals, schools, infrastructure and jobs,” the President was quoted as saying of the significance of the law in a statement released by one of his media aides.
Yet, the Nigeria Tax and Fiscal Law Amendment Bill (Finance Bill) that we recently passed into law in the Senate is no less significant in terms of helping to generate revenue necessary for improving the lots of Nigerians. Unarguably, the most ‘popular’ concern about the bill was the proposal to increase Value Added Tax (VAT) from five per cent to 7.5 per cent.
The fiscal legislation is a comprehensive one aimed at streamlining Nigeria’s tax system to ensure that the government gets revenue needed for investment in infrastructure and other social services for the country. The passage of this Finance Bill involved the amendments of seven taxation related Acts – Companies Income Tax Act, Cap C21 2004 (as amended to date); Value Added Tax Act, Cap VI, LHN 2007 (as amended), and Customs and Excise Tariff (Consolidation) Act, Cap C49, 2004, Personal Income Tax Cap P8, LFN 2007 (as amended); Capital Gains Tax Act Cap C1, LFN 2007; Stamp Duties Act Cap S8, LFN 2004, and the Petroleum Profit Tax Act (PPTA) 2004. The amendments involved comprehensive, robust review of Nigeria’s tax laws with the goal of achieving a tax-to-gross domestic product (GDP) ratio of 15 per cent by 2023, up from the six per cent that it is presently.
The Finance Bill, as amended, would promote fiscal equity by mitigating instances of regressive taxation, as well as introduce tax incentives for investment in infrastructure and capital markets. While passing the bill, virtually all of us in the Senate were unanimous in our agreement that the bill, when signed into law by the President, would support small businesses in line with the on-going “Ease of Doing Business Reforms” and raise revenues for the Government. And contrary to the opinion of some people, it must be clarified that the modifications of the fiscal rules around taxation in the Bill are clearly aimed at creating an enabling business environment aimed at minimizing the tax burden for Micro, Small and Medium Enterprises (MSMEs)
While a few of my colleagues and others outside the National Assembly have made heavy weather out of the increase in VAT rate, the fact is that most common day items in terms of food and other essential items are now VAT free as stipulated in the new law. The President of the Senate, Distinguished Senator Ahmed Lawan was also emphatic that the passage of the Finance Bill is not to put ‘tax burdens on the ordinary people,’ but to create avenue for more revenues to provide services and infrastructure for Nigerians, including the ordinary people.
It was also particularly exciting for me when the President of the Senate indicated that the passage of the Bill will be complimented by a vigorous oversight over Federal Government’s agencies through the statutory oversight function of the National Assembly to ensure that agencies of government meet their revenue targets. And typical of Lawan, despite protestations from some of our colleagues, he was able to ensure that the Bill was passed in a bi-partisan manner.
Of course, the passage of the Finance Bill was just a precursor to the historical passage of the 2020 Appropriation Plan by both chambers of the National Assembly last Thursday. Lawan had, when campaigning to be elected to lead the 9th Senate promised to return the country to the January to December budget cycle which was last in operation in the country under the military rule. Since Nigeria’s return to civil rule, lawmakers had taken between three to six months to pass the Appropriation Bill every fiscal year. The results were that the President, each respective year, only got to sign the bill into law many months into the New Year. There have been arguments between the executive and the National Assembly over where to put the responsibilities for the delay, but the fact is that none of the two sides are blameless on the issue. But Senator Ahmed Lawan came to office with a clear cut blueprint drawn out from his experience as one of Nigeria’s most seasoned lawmakers and with the determination to work with the executive to ensure that the country returns to the January to December budget cycle.
Working very harmoniously with the leadership of the House of Representatives, Senator Ahmed Lawan activated his plan after the President presented the 2020 Budget proposal of N10.33 trillion to the joint session of the National Assembly on October 8, 2019. The President of the Senate subsequently adjourned plenary sessions of the Senate, declaring the month of October the sole window for all budget defence activities at committee levels, while asking all Ministries, Departments and Agencies (MDAs) to appear before the respective committees in both chambers of the National Assembly to expeditiously defend their Budget estimates on or before October 28.
I am well aware that there were cynics across the country who believed that the Senate President was only out to impress the President. The good thing is that such cynics have been proved wrong. In spite of the hitches here and there, the two chambers of the National Assembly succeeded in passing the 2020 last Thursday. The concurrence between the two chambers in the variation of the budget figure from N10.33 trillion presented by the President to N10.59 trillion by both chambers as we passed the budget during our respective plenaries before we adjourned last week indicated the kind of cooperation and smooth working relation the red and the green chambers has forged under the current chairman of the National Assembly. Presidential assent to the Bill would return the country to the January to December budget cycles which analysts have spoken so much about, especially regarding restoring and retaining investors’ confidence in the economy and other benefits. Returning the budget to the January to December cycle will also help in the execution of the capital component of the budget, especially, the much needed rehabilitation of our roads before the rains will set in, among other benefits.
A day before the passage of the Appropriation Bill, we also in the Senate, passed the Public Procurement Act (Amendment) Bill, 2019. The amendments seek to review the mobilization fee for contractors, create an e-procurement model and provide a time frame for procurement processes. According to the President of the Senate, the amendments will end the ‘big bottleneck’ associated with procurement process in Nigeria. The upward review of contractors’ mobilisation fees from 15 to 30 per cent in the amendment as many have noted, would help end the phenomenon of abandoned projects in the country. If signed into law, the Federal Government will have no choice but to establish the much sought-after National Council on Public Procurement. Therefore, the Ahmed Lawan led Senate would have helped to infuse greater transparency and accountability in Nigeria’s procurement processes as well as to ensure that contractors deliver on the jobs they were awarded.
There is no doubt that, unlike its predecessors, the 9th Senate under Distinguished Senator Ahmed Lawan has demonstrated ability to set targets and ensure their realizations on time and on schedule. While the Senate has been operating under a less acrimonious atmosphere than in the past, the Senate President has also shown that it is possible to forge a healthy working synergy between the National Assembly and the Executive. The good thing as those of us inside can confirm, is that the harmonious working relationship between the two branches of government has not translated into master-servant relationship.
While avoiding unnecessary confrontations, the Senator Ahmed Lawan led Senate is ever ready to assert its independence when there is need to do so. This is already being demonstrated in our insistence and resolve not to attend to the budget of the Niger Delta Development Commission, NDDC, until President Buhari inaugurates the new board of the Commission that has been confirmed by the chamber. Recall that just before the confirmation of members of a new board for the NDDC led by Benard Okumagba as nominated by the President, the Minister of Niger Delta, Senator Godswill Akpabio, appointed an ‘interim board’ that is unknown to the law establishing the Commission. But the President of the Senate, pursuant to the view of overwhelming majority of Senators insisted that the Senate will not have anything to do with the strange arrangement and will certainly not welcome the members of the interim board to the National Assembly for the defence of NDDC’s budget.
Therefore, one can only laugh at the mischievous misrepresentation of what the Senate President said when he met with the Chairman of the Presidential Advisory Committee Against Corruption, Prof Itse Sagay recently. Distinguished Senator Ahmed Lawan had at that meeting promised that the Senate is ready to receive and consider any request from the President. But some commentators, out of mischief, had interpreted this to mean a willy-nilly surrender of the Senate to the executive. But nothing could be farther from the truth. What he actually meant was that President Buhari is too patriotic and nationalistic to bring to the National Assembly, any bill that will not bode well for the country. In anyway, Senator Lawan is always conscious of his position as just first among equals and thus, allows open debate on all issues irrespective of party affiliations. Perusals of media reports on activities of our activities thus far in the Senate will confirm this. Therefore, there is no way Distinguished Senator Ahmed Lawan can ram bills down the throat of Senators.
In the same regard, I can also confirm that the President of the Senate does not interfere in our jobs at Committee levels. Rather, he allows the Committee chairpersons free hands over their respective committees and only comes in when his attention is drawn to the fact that one MDA or the other is not cooperating with a respective committee, particularly in the very critical areas of budget defence and oversight. The President of the Senate is also stepping up capacity building for Senators, especially those of us that are new in the upper chamber of the Assembly, to equip us to effectively undertake our constitutionally assigned duties. He has also committed himself to constitutional and electoral reforms. The Senate under senator Ahmed Lawan is surely breaking new grounds and deserves the support of all to continue to work for the good of the country.
Senator Uba Sani is the Chairman of the Senate’s Committee on Banking, Insurance and other Financial Institutions