OUR COUNTRY, OUR BUDGET (A critical Analysis of Nigeria's budgeting system)

An Extract From A LECTURE
Delivered by Senator representing Abia South Senatorial District, at the 2015 Faculty of social sciences Annual lecture, University of Benin on the 19th of August 2015.

Brief Biography 

Senator Eyinnaya Harcourt Abaribe is a Nigerian politician Born March 3, 1955 who was elected to the Abia-South Senatorial District of Abia State in the Senate of Nigeria in April 2007.He went to the University of Benin, where he received a bachelor's degree economics in 1979 and a master's degree in economics in 1982. He lectured at Edo State University from 1982 until 1985. 

"A budget simply means a statement of intention and a guide to the achievement of the fiscal and monetary goals of the government for the period in question. Wikipedia defines it as a 'quantitative expression of a plan for a defined period of time'. In other words,  a spending plan to achieve a desired result.

Nigerian budgets,  in simple language,  have become a cesspit of corruption and a platform that promotes official financial profligacy, malfeasance and brigandage.

At this point i would enter a caveat: i am a senator,  a member of the National Assembly so loathed by many a member of the public for carting away 'jumbo pay' from the national treasury. We have been accused of appropriating colossal pay to ourselves. In my thinking, the National Assembly is the proverbial 'fall-guy' ; held responsible for every financial mischief in the Nigerian house. The fallacious jumbo pay has become a ready debate topic aimed at galvanizing the hapless public and with it divert their attention from the heist that goes on in every annual budget.

The reality is : the Nigerian public had been boxed into a corner and literally barred from beaming its searchlight on the executive and the corresponding alarming cost of running that arm of government. The ugly fixation on the National Assembly as the villain is given  fillip by its unfortunate placing in the country 's evolutionary processes in democratic governance.  The parliament has variously been at the receiving end of any distortion in governance, hence it is the most harangued and despised because of our long immersion in the waters of military dictatorship. In my thinking, the quick resort to denigrate the institution betrays the executive's aversion to the checks in the system, which the legislature provides.

So, yes,  i belong to the institution accused of carting away '25% of Nigeria's budget'. That accusation was made by the former Governor of Central Bank, five years ago, and since then, everything we have done in the National Assembly has been read by many from the prism of self-centeredness. Now the Emir of Kano, Sanusi got his math wrong, but the weight of the office he occupied gave legitimacy to his figures and made the public believe him without fact-checking his prouncement. I was the Chairman of senate Committee on Information in the 7th Assembly, and i recall when a group of protesting young Nigerians stormed the entrance of the National Assembly 2 years ago based on Sanusi 's figures. I addressed them and explained that the National Assembly actually is located in the lowest rung among the three arms of Government in budget appropriation;that our annual budget has hovered around a paltry 3 and 3.5% of the total budget, compared to what goes to the executive. And this is verifiable. In 2010,  the same year that Governor Sanusi accused us of carting away a bulky 25% of the national budget, the National Assembly 's budget was N154.2billion  out of a total annual budget of N4.6trn Naira. You can bring out your calculator and work out the percentage. Its 3.46%. Compare that to the alleged 25%  and see the wide gap. Was this a case of giving the fog a bad name so as to hang it?  Your guess is as good as mine.

In 2011, the total budget passed was N4.97trn, and the National Assembly's was still N150b. Again, if you compute it, you will get 3%. You can compute it till this year's that has been reduced to N120b which is 2.6%, thus you will see clearly that the National Assembly bas never gone beyond 3.5% of the annual budget. Where then was the 25% talk coming from?  At the time the Emir Sanusi was excoriating  the members of NASS, his CBN overhead that year was about 320b Naira ;double the total budget for the entire; legislative arm ; for an agency. But he had refused to let the National Assembly look into his operating budget citing CBN act. He was not alone. NPA, NIMASA, FIRS, DPR, NCC, NNPC et al all refused the NASS oversight of their operating budget citing their enabling laws despite the Fiscal Responsibility Act and they were backed by the presidency. Considering the recent revelations that an agency like NNPC spent over 45% of its revenues on itself instead of passing same to consolidated revenue fund we can all see how such behaviour impacts the country negatively. But that is topic or another day.

Plus ca change....
Under our laws,  a budget should be sent to the National Assembly for approval from September of every year so that by December the budget Should have been past into law for implementation starting from the 1st of January of the following year. That is ideal. Mostly, it is never so. In my 8 years in the National Assembly, only once has this threshold been met. The French would say "plus ca change, plus ce la meme chose"... The more things change the more they remain the same!

Anomalies and poor implementation
Experience has shown me that there are huge anomalies in the budgeting process in this country, particularly in its implementation and constant duplication of subheads. In fact,  a growing trend to shield the budgets from public scrutiny is the penchant for using allocation to the budget. So, the recourse to pin the National Assembly down without justification is a well-choreographed diversionary tactics.

With regard to implementation, the story is very familiar to all of the us here. Recurrent votes get 100% implementation but barely 30-40% of what we propose in the budget for capital account gets implemented in all the years I've been in the NASS. In actual fact it became a cynical ploy from the Obasanjo years to this moment where only those areas in the capital vote that aligns  with the original proposal of the executive  gets any vote.

2014 Budget As An Example
The breakdown of the 2014 budget shows the trending emphasis on recurrent spending to the detriment of what some analysts refer to as the 'common man priority' ; the Capital budget. Of the aggregate expenditure of N4.850trn recurrent alone gulped a total of N3.575 trn or 76% of the entire budget. Out the amount, personnel cost or salary and wages of MDA's cut the biggest slice of the pie of N1.769trn or 38% of the entire budget. Thus capital expenditure was allocated a meager 24% or N1.119trn. The implication being that development at this rate would be nigh impossible.

2015 Budget
The 2015 budget continued the tradition of brushing aside capital development. It was a far cry from that of the 2014 appropriation both in content and application. Out of the aggregate budget of N4,358 trn, capital expenditure got a paltry 9% amounting to N387.1b leaving recurrent expenditure with a total sum of N3, 970 trillion of 91%. From the recurrent vote, personnel cost got the sum of N1,836.7trillion or 42% of the entire budget while overheads and other service wide votes was allocated N547.8b or 13% of the budget.

It can be seen that the difference is very frightening when one compares the 2015 capital vote of N387b to the N1.119trillion provision in 2014. The reality is that in the circumstance, capital expenditure would be under severe threat in an era of declining oil price. It is even more frightening that what is called overhead and other service wide votes at N547.87b or 13% would get more vote than capital.

Service wide vote

For most of us who do not know, service wide votes is a major component of The Federal Government Ministries, Departments and Agencies earmarked for contingencies and approved by the National Assembly but without projects attached to it.

Nevertheless, the vote has turned out to be one intricate aspect of the budgeting system that has surreptitiously thrown the door wide open for the unprecedented fleecing of the national treasury in the budget. It's not absurd to say that the service wide vote gave impetus to the seeming willful duplications of overheads as exemplified in the forgoing. To date the service wide votes has become a sore point in the relationship between the executive and the National Assembly.

In the 2015 budget, a total sum of N360.94b was set aside for service wide votes. I recall that at the point when the Senate adopted the reports of its joint committee on Finance, National Planning, Economic Affairs and Poverty Alleviation(under Senator Ahmed Makarfi)  that worked on the revised 2015-2017 Medium Term Expenditure  Framework(MTEF) paper on 25th February 2015, forwarded to it by former president Jonathan, it called for the total scrapping of the vote after transfer of funds to the relevant  MDA's. To underscore their readiness to engage the executive on this, Senators in the report approved the report approved the recommendation that N63b earlier earmarked under the vote for Presidential Amnesty Programme be transferred to the Ministry of Niger Delta.

Executive /Legislature Feud
Come to think of it, whose function is it to prepare the budget?  Who's is it to appropriate? The power to appropriate is the sole function of the Legislature.

The executive has always disputed this leading all presidents from 1999 to attempt to push the National Assembly to leave the budgets as presented untouched. When this is not done conflict ensues.
A budget has to capture the needs of the society within the period it is expected to cater for.
Thank You For Listening"

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