Saturday, February 22, 2014

Legislative odds against 2014 budget

The 2014 national budget proposal weathered three stormy sessions before the bill passed the second reading a few days ago at the Senate. SUNDAY ABORISADE considers the various issues debated.
Unlike their House of Representatives counterparts, members of the Senate, two weeks ago, decided to consider the 2014 budget proposal presented to them by the Finance Minister, Dr. Ngozi Okonjo-Iweala, last December although they expressed divergent views on whether it should be passed or returned to the executive because of certain anomalies discovered in it.
A careful observation of the debate, while it lasted, showed that the Peoples Democratic Party senators commended the budget and urged the upper chamber to consider its immediate approval, while members of the All Progressives Congress in the senate, condemned the document and called for its rejection.
They maintained their different positions despite the appeal by Senate President, David Mark, to members to “see the budget from a nationalistic periscope, using a national magnifying glasses to view it instead of  reducing it to partisan politics.”
Senate Leader, Victor Ndoma-Egba, in the lead debate had explained that the budget was premised on the 2014-2016 Medium Term Expenditure Framework and Fiscal Strategy Paper, which took into consideration the heightened global economic uncertainty in 2013.
Ndoma-Egba attributed the drop in the 2014 budget estimates to the challenges occasioned by oil theft, pipeline vandalism and production shut-ins at mining fields which resulted in reduced oil revenue. The drop in the 2014 budget estimates notwithstanding, the senate leader described the budget proposal as a framework that will consolidate and add impetus to the transformation agenda of the current administration.
 Leader of the opposition in the upper chamber, Senator George Akume, stressed the need for the Ministry of Finance to forward to the National Assembly, necessary documents on the Fiscal Responsibility Bill to aid deliberations on the budget estimates. He described the N268.3bn SURE-P funds as an omnibus, being channeled to all sectors and wondered the real purpose of the money.
Senator Issa Galaudu also urged members to support the bill but faulted the implementation of the 2013 budget especially the decision of the Nigerian National Petroleum Corporation to spend a whopping $8bn on kerosene subsidy. Galaudu noted that the poor implementation of budgets had been the major challenge since 1999 because budget had continued to grow.
He said, “From N947bn in 1999 to N4.6trn today, it has grown by over 400 per cent, yet, the impact has not been felt by all Nigerians. There are some bloated expenses. Even with huge security budget, every MDA has security provisions. All these make capital expenditure smaller.”
Senators Paulinus Igwe, Phillip Aduda, and Giang Pajok all supported the passage of the budget but stressed the need to increase allocation to the Federal Capital Territory, security and the judiciary in order to guarantee public safety.
However, most of the APC members, like Senators Ahmed Lawan, Alkali Jajere, Abubakar Yar’Adua, Abdulmumuni Hassan and Babajide Omoworare, who contributed to the debate, condemned the budget and asked members to reject it.
Lawan, who described the budget as anti-masses, said it was packaged to further boost the economic power of top politicians, senior civil servants and high calibre industrialists because 74 per cent was allocated to recurrent expenditure while 26 per cent was voted  for the execution of capital projects. The senator wondered why hundreds of billions of naira was allocated to the Niger Delta region which is currently enjoying relative peace while a meager N2bn was allocated to the North-Eastern part of the country which has been engrossed in crisis for quite some time.
He said, “I want to clarify that I have nothing against the South-South or the Niger Delta. In fact, I have been a supporter of the Niger Delta from my House of Representatives days to this day.
But what I said is that the funds proposed for Defence, that is, for the Army, Air Force, Navy and the Ministry of Defence Headquarters are far low compared to what is earmarked for 30,000 militants and the amnesty programme. The amnesty programme and the 30,000 militants will have N52bn while Defence will have just about N34bn. And what we are saying is that we have a state of emergency in the North-East and that security agents should be well funded. Our state carries the burden of funding security agencies in our place.
“Why don’t we fund these security agencies better when you are taking so much money for what is, in my opinion, not more important than the security of our people. I believe that while fighting insurgency, we need to make provision, special package, special funding, some kind of marshal plan for the North-East. For the proposal of N2bn by the Federal Government, I say we reject it as North-East Development Initiative when compared to N163bn going to the Niger Delta.  Are we serious about tackling the problems in the North-East?”
Lawan asked the National Assembly to rework the budget, leave whatever was proposed for the Niger Delta, but insisted that appreciable funding should be provided in the proposed budget for the North-East. He called for the immediate resignation of Okonjo-Iweala over her alleged failure to reduce the recurrent in the 2014 budget which is 74 per cent.
He said, “What we are saying is that only a small per cent is going to the masses of this country. How do you create jobs and alleviate poverty? The people should be at the centre of concept, application, practicality and implementation of the budget. We cannot have peace so far we spend much of our funds on ourselves. We have to spend the bulk of our funds on the people so that everybody will have something to do and everybody would be safe.”
Yar’Adua said the budget “is not worth the paper on which it was written because it does not hold anything for the common man. Everything in the budget is for the political class, for the rich and the bureaucrat. Is our economy better today than 15 years ago? Are we more developed today than 15 years ago? I want Okonjo-Iweala to resign because she has disappointed us.”
Omoworare said, “Having listened, it looks as if we have surrendered our legislative duties to the executive. The budget belongs to the parliament and it is our responsibility to tinker with it.”
He called for the invocation of Section 82 of the constitution to allow for time to dissect the budget while the document should be sent to the appropriate committees for necessary fine-tuning.
Other senators both within the PDP and the opposition APC who contributed to the debate on the 2014 budget also described the document as anti-people and called on the leadership of the upper chamber to reject it.
Senators Smart Adeyemi and Abdul Ningi, among others, lamented the high recurrent expenditure above capital vote and the continued depletion of the foreign reserves, accusing Okonjo-Iweala of imposing economic policies of the International Monetary Fund and the World Bank on Nigeria.
Ningi cautioned against Nigeria’s dependence on the policies of the IMF; World Bank and other advanced economies of the world, suggesting that Nigeria should evolve an indigenous economic policies that would impact positively on the economy and the citizenry.
He argued that western economies were collapsing, unlike the ‘home-grown economies of India and China,’ which according to him, are waxing stronger by the day.
Adeyemi said, “Okonjo-Iweala should be told in clear terms that the economic policies of the IMF and the World Bank cannot work in Nigeria. The policy must be reviewed. The IMF and World Bank policies cannot work 100 per cent in Nigeria. We don’t need IMF commendations. What we need is what will impact on the lives of Nigerians. We need to concentrate on key areas such as power and other sectors as well as work on budget management.”
The senators lamented that the 76 per cent recurrent expenditure and 24 per cent capital components of the budget were rather lopsided, and therefore far from meeting the needs and aspirations of the people.
Senator Kabiru Gaya noted that the distribution of the allocation in the budget was worrisome and unacceptable. He called on the executive to swap the figures for capital and recurrent.
He said, “The Federal Government budget is the reverse of the Rivers State budget. I wish the budget will be 74 per cent capital and 26 per cent recurrent.”
Senator Gbenga Ashafa said since money was not enough in the capital sector, it was impossible for the economy to witness sufficient growth that could engender employment creation.
Senator Bukola Saraki, while expressing his views on the budget, lamented that the 2013 Appropriation Act was abysmally implemented. He, therefore, insisted that the Executive should be made to account for last year’s budget before the Senate could go into the 2014 estimates.
Senator Ayogu Eze, however, did not see anything wrong with the document. He noted that the budget was well focused and designed to generate employment, pointing out that the problem of budget in Nigeria was never that of content but its implementation.
But Senator Ita Enang, in contrast with the position of some senators, shifted the blame of budget failures in Nigeria from the Executive to the National Assembly but also joined in the call for its rejection.
He said, “The 2014 Appropriation Bill shows a reduced budget sum of N4.6trn as against the N4.9trn for 2013. This is based on reduction in oil revenue, to wit, reduction in the oil benchmark from $79 per barrel to $77.5; reduction in the production estimate from 2.52m barrels per day to 2.38m barrels per day. This loss of revenue is due to the failure of the National Assembly to ensure the implementation of the provisions of the Fiscal Responsibility Act which mandates us to consider and pass budgets.”
However, Okonjo-Iweala, in a statement by her Special Adviser, Mr. Paul Nwabuikwu, roundly refuted the allegations against her by some senators during the budget debate.
Whilst thanking members of the senate who understand the issues at stake, she stated that some senators made allegations and accusations that were not based on facts.
She said, “Though government is continuous and the minister has no desire to shirk her responsibilities, the effort to personalise these issues on the basis of inaccurate information is unfortunate and must be roundly refuted.”
Okonjo-Iweala added that the first point made by some senators was that she was responsible for the rising recurrent expenditure, which according to them rose “from 69 per cent in the 2013 budget to 76 per cent in 2014.”
She said, “This is inaccurate, and at this stage, it is important to recount the recent trend of the government’s recurrent expenditure. The fact is that in 2010, the government awarded salary increases of 53 per cent across the board in the public service, which increased the wage bill from N856.9bn in 2009 to N1.36trn in 2010. At the time, finances were inadequate to back this award, and the government had to increase domestic borrowing significantly to cover the shortfall. This caused a rise in government domestic borrowing from N524bn in 2009 to N1.36trn in 2010, and it is the singular cause of the country’s rising domestic debt profile, from 14.83 per cent of our Gross Domestic Product in 2009 to 17.98 per cent of GDP in 2010.”

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