Two hundred and twenty-five days after the President Buhari submitted a draft copy of the 2018 appropriation bill to the National Assembly, he finally signed it into law yesterday but not without the usual controversy that has become a tradition surrendering the budget in his administration.
On the 7th of November 2017, President Muhammadu Buhari submitted a budget proposal of N8.621 trillion but after more than seven months of holding unto it, the legislative returned a budget of N9.12 trillion, inflated by N508 billion. Now the controversy is if this additional amount approved with the consent of the president or not. Buhari while signing the budget, claimed that he knows nothing about the additional amounts and projects inserted in the budget, but the national assembly says he is not being absolutely honest with the truth.
In his speech at the signing of the 2018 Appropriation Bill into Law at the presidential villa in Abuja, Buhari criticised the national assembly over some of the changes made in the budget claiming that they have cut down provisions for 4,700 projects that was to cost N347 billion and substituted them with a 6,403 projects of their own worth N578 billion.
Because of the additions, Buhari signalled that the 2018 budget might be difficult, if not impossible to implement.
“The logic behind the constitutional direction that budgets should be proposed by the Executive is that, it is the Executive that knows and defines its policies and projects. The 2018 Appropriation Bill targets to consolidate the achievements of previous budgets and deliver on Nigeria’s Economic Recovery and Growth Plan (ERGP) 2017-2020,” Buhari said.
“Unfortunately, that has not been given much regard in what has been sent to me. Many of the projects cut are critical and may be difficult, if not impossible, to implement with the reduced allocation. Some of the new projects inserted by the National Assembly have not been properly conceptualized, designed and costed and will therefore be difficult to execute.”
“Furthermore, many of these new projects introduced by the National Assembly have been added to the budgets of most Ministries Department and Agencies (MDAs) with no consideration for institutional capacity to execute them or the incremental recurrent expenditure that may be required.”
“As it is, some of these projects relate to matters that are the responsibility of the States and Local Governments, and for which the Federal Government should therefore not be unduly burdened,” the president said in his speech.
The President pointed out that another area of concern was the increase in the provisions for Statutory Transfers by an aggregate of N73.96 billion by NASS.
According to him, most of the increases are for recurrent expenditure at a time when the administration is trying to keep down the cost of governance.
He said “an example of this increase is the budget of the National Assembly itself, which increased by N14.5 billion from N125 billion to N139.5 billion without any discussion with the Executive.’’
According to him, the provision for security infrastructure in the 104 Unity Schools across the country were cut by N3 billion at a time when securing students against acts of terrorism ought to be a major concern of government.
The provision for the Federal Government’s National Housing Programme was also cut by N8.7 billion.
A total of N5 billion was cut from the provisions for Pension Redemption Fund and Public Service Wage Adjustment; the provisions for Export Expansion Grant (EEG) and Special Economic Zones/Industrial Parks, which are key industrialization initiatives of the Administration he said, were cut by a total of N14.5 billion.
Also the provision for Construction of the Terminal Building at Enugu airport was cut from N2 billion to N500 million which will further delay the completion of the critical project, he said.
Also raising concerns was the fact that the take-off Grant for the Maritime University in Delta State, a key strategic initiative of the Federal Government, was cut from N5billion to N3.4 billion.
Also, about seventy (70) new road projects have been inserted into the budget of the Federal Ministry of Power, Works and Housing.
In doing so, Buhari said the National Assembly applied some of the additional funds expected from the upward review of the oil price benchmark to the Ministry’s vote.
Regrettably, however, in order to make provision for some of the new roads, the amounts allocated to some strategic major roads have been cut by the National Assembly, Buhari said.
But in an exclusive chat with BusinessDay, a member of the Senate Appropriations Committee, Rafiu Ibrahim (APC, Kwara State), accused the President of playing to the gallery. He said that all the newly introduced projects in the 2018 appropriation act were inserted with the consent of the Presidency.
He wondered why Buhari did not confront the National Assembly leadership when he had budget meetings with its leadership.
“Why did he (Buhari) sign? He shouldn’t have signed. He said he is bringing supplementary or amendment. We are expecting it.”
“He just likes to make drama. Why did he sign? He should have withheld his signature and see what would have happened. We are no longer interested in all this drama. He shouldn’t have signed. He should have confronted us with those (insertions), call the leadership of the National Assembly and confront them.”
“We have done our best, we have passed the budget. The increment we made was in consonance with the Executive, which was as per benchmark. And we spelled out how we would apportion the money. And it was majorly for what their own priority areas they identified,” Ibrahim who chairs the Senate Committee on Banking, Insurance and other Financial Institutions, said in a telephone interview.
He said lawmakers will no longer succumb to the President’s blackmail.
“We don’t believe in him again. He likes to play to the gallery. He should have not signed. He should have withheld his assent. And let Nigerians confront him. Before now, we always want to believe in his age but now some of us that are even younger don’t believe in him again. This is very disappointing. If he is signing the budget, why should he be making such comments? Just like he will go into a public function and be making derogatory comments about the National Assembly, just like he did the last time. We are not going to take all these again.”
“He should send the supplementary budget and if he says that we inserted, we younger ones will make sure that it is not passed. We will insist on our leadership. The way we normally bend for him, we will not allow them to bend again.”
“Then again, if he is bringing supplementary (budget), he should be honest with it, not playing down on our integrity. We will not agree to all this again. He cannot play down on us. He is eighty years old. He cannot continue to play down on our lives,” he said.
It was a similar expression of anger at the House of Representatives as they vowed not to concede to plan by Buhari to turn the legislative arm of government to a rubber-stamp.
In his reaction to the president’s remarks, Abdulrazak Namdas, chairman, House Committee on Media and Publicity said that the House and indeed National Assembly acted in tandem with relevant provisions of the 1999 Constitution (as amended) which confer upon the Legislature, the power of appropriation.
“The House of Representatives is appreciative of President Muhammadu Buhari in signing the 2018 Appropriation Bill into law and wish to make the following observations:
“That the budget is usually a proposal by the Executive to the National Assembly, which the latter is given the constitutional power of appropriation to alter, make additions, costs or reduce as it may deem necessary.”
“The Legislature is not expected to be a rubber-stamp by simply approving the Executive proposals and returning the budget to Mr. President. Therefore, the additions Mr. President complained of in his speech are justifiable.”
“We are on the same page with Mr. President in his desire to return our budget cycle to January-December. By the provisions of the Fiscal Responsibility Act, 2007, the budget estimates should be with the National Assembly around September of the year.”
“In the case of the 2018 budget, the estimates came behind schedule in November 2017, even though this attempt was seen as one of the earliest in recent years. Going forward, we urge the Executive to speed up the reporting time to the National Assembly by complying fully with the FRA.”
“Besides, there were delays that should be blamed on the heads of MDAs. Mr. President will recall that he had to direct ministers and heads of agencies to go to the National Assembly to defend their proposals. This came after the National Assembly had persistently raised the alarm over the non-cooperative attitudes of these government officials. On this grounds, the delay in passing the budget cannot be blamed on the legislature,” he said.
While responding to allegations on the new projects, Namdas said: “On this aspect, we have to remind Mr. President that we are representatives of our people and wish to state that even the common man deserves a mention in the budget by including projects that will directly affect his life positively.”
“Some of the projects designed by the executive, as high-sounding as their names suggest, do not meet the needs of the common man,” Namdas observed.
In response to the allegations on the N73.96 billion increase in the National Assembly’s Statutory Transfers, Namdas explained that: “before 2015, the budget of the National Assembly was N150 billion for several years. It was cut down to N120 billion in 2015 and further down to N115 billion in 2016. In 2017, the budget was N125 billion and N139.5 billion in 2018. This means that the budget of the National Assembly is still far below the N150 billion in the years before 2015.
“While we commend Mr. President for a good working relationship, we also wish to state that we have a job to do, which requires adequate funding as well. The additional costs and projects to the budget were done in good faith for the sole purpose of improving the lives of Nigerians.”
“Finally, we welcome the proposal by Mr. President to forward a supplementary budget to the National Assembly to address other areas of pressing demands and commend the President and the entire executive arm for a cordial working relationship,” the Adamawa lawmaker stated.
However, analysts have expressed different views on the likely impact of the 2018 budget considering its late passage.
Tajudeen Ibrahim, Head of Research at Chapel Hill Denham Securities said the signing of the budget is positive, although there is a major downside.
“There is a major downside around cost of capital expenditure (Capex) by the national assembly. This brings a downside risk for the ability of the 2018 budget to support infrastructural growth,” Ibrahim said.
Razia Khan, Africa Chief Economist at Standard Chartered said “with 2019 elections rapidly approaching, there will not be much room to focus on the bigger, structural measures needed to drive non-oil revenue collection.”
“In recent years, despite significant Naira depreciation, non-oil revenue has largely disappointed budget projections. This is partly because of the weakness of the economy. Higher oil prices will now relieve some of the immediate pressure for reliance on non-oil revenue. This is a concern, given the structural weakness of Nigeria’s revenue mobilisation, which remains woefully inadequate for an economy of its size.”
Bismark Rewane, CEO of economics consulting firm, Financial Derivatives Company (FDC) when asked for comments on the signed budget said it is better late than never.
“The amount signed in the budget is not that significant, as such it is not going to move a needle. Although it is a good thing but it will not change much because it will be limited,” Rewane said by phone.
