Why the 2018 Budget may not be passed before April

Why the 2018 Budget may not be passed before April

By Henry Umoru

WHEN President Muhammadu Buhari, on November 7, 2017, presented before a joint session of the National Assembly, a budget proposal of N8.612 trillion for the 2018 fiscal year, which represented 16 percent increase of N7.298 trillion over the 2017 Budget, the Executive arm of government could not have envisaged controversy the document is currently generating.

Buhari, who tagged the 2018 Budget as that of Consolidation, said it will help to actualize the economic growth recovery plan of the administration.

He explained that fiscal operations are expected to result in a deficit of N2.005 trillion or 1.77 percent of GDP, saying the situation was in line with government’s plans under the ERGP to progressively reduce deficit and borrowings.

Of the N8.6 trillion budget, N456 billion is for Statutory Transfer, N2 trillion for Debt Service, N3 trillion for Recurrent-Non-Debt Expenditure, while N2 trillion is for for Capital Expenditure.

Problem with the budget started with the presentation of the 2018-2020 Medium-Term Expenditure Framework, MTEF, and Fiscal Strategy Paper, FSP, to the Senate. The submission of the MTEF usually precedes the presentation of the budget to the National Assembly.

The Senate, on December 8, passed the MTEF/ FSP and set December 19 for the Senate Committee on Appropriations to submit the report of 2018 Appropriation for deliberation and passage.

The senators, in the MTEF documents passed, raised the oil benchmark for the 2018 Budget from the $45 per barrel as proposed by the Federal Government to $47  while daily production was retained at 2.3 million barrel per day, with exchange rate also retained at N305 to $1 .

The $47 per barrel approved by the Senate as oil price bench mark was a dollar higher than the $46 recommended by its joint committee on Finance, Appropriations and National Planning that worked on the MTEF document. The parameters are 2.3million barrel oil production per day , N305 to a US dollar exchange rate, 3.5% GDP growth rate, N5.79trillion projected non oil revenue, N1.699trillion for new borrowings, etc.

The controversy surrounding the 2018 Budget, however, reared their heads from the day debate on the general principles started, just as it was discovered during budget defence by Ministries, Departments, Agencies, MDAs, were not having documents, while some had alleged padding and duplicated items.

When the Minister of Finance, Mrs Kemi Adeosun, appeared before the Senator John Enoh-led Committee on Finance, it queried the Federal Government on its insistence that the 2018 Budget must be passed in January when less than 50 percent    of 2017 Budget implemented.

The Senate also took a swipe at the Federal Government and   requested to know why the 2017 Budget haD no correlation with the 2018 Budget,  insisting that with the  implementation of the present budget and that of 2018 passed in January, it would be poorly done because of the size of Nigeria.

During the debate on the general principles of the budget, senators, who took turns on the 2018 Budget across party lines, did not hide their reservations as they lampooned the estimates, even as many of them declared that the N11trillion collectible revenue proposed in the budget could not be met going by experiences of previous years and called for increase in the oil price bench mark from $45 to $50per barrel.

In his remarks, Deputy Senate President, Senator Ike Ekweremadu, said that without revenue, we would have no money to do the expenditure, adding, “We must point out in the course of the debate how we will be able to reduce the deficit. Ben Bruce has told us that some government agencies should not be in existence anymore.

“We need to point out some of these MDAs that are of no consequence or adding no value in Nigeria so that we don’t keep spending money on them because that way we will be able to reduce the ratio between the capital and the recurrent and of course reduce the deficit. And I hope government will listen to such exposure and be able to do away with such agencies.

“If the government fails to remove those agencies from our budget we have a responsibility to Nigerians to bring bills in order to repeal the laws setting up those agencies and stop wastage of our resources.”

The criticism of the continued when senators described technocrats who prepared the 2018 Budget and “made some unrealistic revenue projections” in the document as a national embarrassment.

Earlier, the Senate Chief Whip, Senator Olusola Adeyeye (APC Osun Central), said since 1999 , he had never seen  the lack of enthusiasm displayed by lawmakers on the 2018 Budget.

He added that the budget should be pruned realistically even if it entails drastic cutting down of allowances of federal lawmakers to generate revenue for capital and infrastructure development in the country.

After debate on the general principles of the budget, the Senate, on Tuesday , December 5, adjourned plenary for  two weeks to allow its standing committees meet officials of MDAs for defence sessions on the budget estimates with the belief that its committee on appropriation would submit report to that effect for consideration when the lawmakers reconvene on December 19.

The Senate, on December 19, took on for presenting before them the 2018 Appropriation Bill, which, according to them, had been “fully padded, full of inaccuracies, errors, inconsistencies, boju boju and abracadabra”.

The lawmakers spoke when they contributed to a Point of Order raised by the Deputy Senate leader, Senator Bala Ibn Na’Allah, APC, Kebbi South who queried the actions of MDAs in the implementation of budgets and defence of budget proposals.

According to Na’Allah, reports from the various committees indicated that budgetary pronouncements made by the President were not in anyway reflective in the submissions being made by heads of the MDAs.

Na’Allah said: “I feel that there are certain aspects that the Senate has so many things to discuss. When we suspended the plenary for two weeks, the intention was to enable committees work. They are supposed to report progress in order to enable the Senate pass the budget before the end of the year or early next year.

“When we suspended plenary, it was with the idea that the committees will swing into action so we can have a tentative date to pass the budget. From what I have seen, we might run into troubled waters. If we have not appreciated what the problems are, it is important for Nigerians to come here and understand what the problem is.

“The template we are using will continue to create problems for us. It was created during the Military era. The template cannot work in our country today. From reports we have had, it is obvious that we have problems. We need to know what the problems are. If we have a 2017 budget that has not been executed today and we are considering the 2018 budget, it means there is a problem.”

Contributing, Senator Barnabas Gemade, APC, Benue North East who suggested that the consideration of the 2018 budget be suspended, however argued that the lifespan of the current 2017 budget be extended till end of March of 2018, adding, “This point of order raised is important because of what the public is waiting for. Our two weeks committee work should have led us to where we will lay the report and pass the budget. As was indicted, we need to appreciate the efforts of the executive who is trying to return the budget year from January to December.

“What we have seen is far from the 40 per cent capital project implementation we were told. In many MDAs, budget performance is hovering between 12 to 15 per cent. In early November, the borrowing plans were brought and we approved it. They said they were going to release more funds. As of now, we cannot say if that is true.

“In defending the budget, MDAs are supposed to bring their 2017 budget performance to committees. When you look at the budget proposals brought here, many things captured in the 2017 budget were not rolled over. Committees and MDAs need to do some work.

“We have to set a date for the implementation of the 2017 budget based on the borrowing plans we approved. I therefore propose that we set March 31st for the 2017 budget to be implemented before we can start working on the 2018 budget. We need to guide against abandonment of ongoing projects.”

Also contributing, Senator Solomon Adeola, APC, Lagos West, wondered why the Senate should consider and approve the 2018 Budget, when the performance of the 2017 Budget was unknown.

“How can we approve the 2018 budget without knowing the performance of 2017 budget? This is abnormal. From the recent budget defences, it is obvious that MDAs are not ready. Year in, year out, the budget performance is low. Last week, a Minister was asked to excuse lawmakers because he did come prepared. He did not come with the necessary documents to defend the budget of his Ministry”, Adeola said.

“We need to show to Nigerians that the National Assembly is ready to approve the budget. Remember that the President during the presentation of the 2018 budget, said the performance of the 2017 budget will attain at least 40 per cent. But that has not been done. I am suggesting that we invite the Minister of Finance to brief us on the performance of the 2017 budget. We need to be told.

“Remember how the Executive submitted the MTEF and withdrew it again. It submitted it and withdrew it again. It shows the lack of seriousness on the part of economic managers of the country.”

On his part, the Chairman, Senate Committee on Public Accounts, Senator Matthew Urhoghide, PDP, Edo South who urged his colleagues to put at bay, pending when the 2017 budget will attain a certain level of performance, said, “I want to say that the budget of 2018 is already bedeviled. For us to be able to determine the 2018, we need to see the performance of 2017. Many MDAs are complaining that what they are getting for recurrent expenditure is not even for them. More worrisome is the capital expenditure.

“Last week, the Minister of Finance announced that N750 billion had been released. If this money has been released, MDAs are yet to get this money. With the envelope budgeting they are doing, we do not know what has been given to MDAs.

“I want to say that every consideration about the 2018 budget should be put at bay. This executive is not serious. Let them tell us what they have done with the 2017 budget. The budget presentation is an annual ritual that is not benefiting anybody.”

Senator Mohammed Hassan, PDP, Yobe South suggested that a small technical committee be set up by the Senate to come up with a standard format on how to handle the 2018 budget, adding, “Many of us have been made to do the work of the executive. We need to set up a small technical committee to come up with a standard format on how to handle the 2018 budget. It is very important to do that.”

Also contributing, Chairman, Senate Committee on the Federal Capital Territory, FCT, Senator Dino Melaye, APC,Kogi West, who described the 2018 Budget as a ‘boju boju’ document, said the budget proposal was “garnished with deception.”

Melaye said, “The President of the Federal Republic of Nigeria, Muhammadu Buhari, said during the budget presentation that the 2017 budget will be rolled over. I took the 2017 budget and went through it page by page. There is no relationship between the two documents. The budget we received was a ‘boju boju’ budget. Why did we package a 2018 budget that was garnished with deception”

“There is about N850 trillion with the CBN. There is an outstanding of N1.5 trillion from collection of stamp duties with the CBN. This money has not been remitted. Yet we took over N2 trillion. We need to strengthen the office of the Accountant-General of the Federation.

“The NNPC was supposed to remit hundreds of billions of naira last year. They did not do that. Yet, we say we are fighting corruption. We cannot continue in sin and ask grace to abound. The issue of discussing the 2018 budget should not even arise. “Enough is enough. We must ensure that the 2017 budget is properly implemented. We must ensure that the budget is an elitist. What they have brought to us is a just a proposal. We need to give Nigerians a budget that will benefit Nigerians.”

Summing up the submission of the senators, Senate President Saraki said, “Truly, it is very disheartening and disappointing because we know how much we have put into the budget process”.

Saraki said, “By now, 2017 budget should have been implemented by up to between 40 and 60 per cent, but this has not been the case. This makes it very difficult for us, we cannot turn into magicians. I continue to appeal that you work within what you have and let us do our best to ensure that we have a budget that is in the interest of Nigerians.

“The executive on their part should sit up and not just make rhetoric, but get down to work. If 2017 budget items are not rolled over to 2018 that is a disaster. Let the executive show some seriousness towards the budget exercise.”

Saraki who maintained that if the executive fails to act, by rolling over the 2017 budget, it will be a disaster as the Senators are not magicians, adding, “Truly, it is very disheartening and disappointing because we know how much we have put into the budget process. How can anybody who is responsible travel at this period when the budget defence is ongoing?

“ By now 2017 budget should have been implemented either 40 or 60 percent, but this has not been the case. This makes it very difficult for us, we cannot turn into magicians. I continue to appeal that you work within what you have and let us do our best to ensure that we have a budget that is in the interest of Nigerians.

“The executive on their part should sit up and not just rhetoric, but really get down to work. If 2017 Budget items are not rolled over to 2018 that is a disaster. It means that most of them are misrepresenting the actual grounds to the leadership of the executive. If the documents are not showing that then that is a carious serious problem. Let the executive show some seriousness towards the budget exercise.” .

With the controversy surrounding the 2018 Budget, the move by the Federal Government to return the country to a predictable January to December fiscal year is not be feasible as there will be no early passage of the 2018 Budget proposals against the backdrop of some senators’ thinking that March or April may also not be achievable in the passage of the budget except the lawmakers decide to close their eyes to the alleged inaccuracies and errors in the budget estimates.

The post Why the 2018 Budget may not be passed before April appeared first on Vanguard News.

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