• Cuts in critical executive projects blamed for delay in assent to 2017 budget
By Bolaji Adebiyi in Abuja and Obinna Chima in Lagos
Owing to the unending disagreement with the legislature over the extent of its power of appropriation, the executive has resolved to approach the Supreme Court for interpretation of Section 80 of the 1999 Constitution, which grants the National Assembly the power to approve appropriated public funds, presidency sources told THISDAY yesterday.
According to sources, the Muhammadu Buhari administration is determined to end the perennial disagreement over the extent of the power of the legislature to appropriate public funds and would be asking the highest court in the land to determine whether the National Assembly has the latitude to revise estimates proposed by the executive arm of government or not.
Since the return of democratic rule in 1999, there has been a dispute over the legislature’s insistence that it has the power to vary budget estimates presented to it by the executive for approval, referring specifically to Section 80(2) and (3) of the Constitution.
Section 80(2) provides: “No moneys shall be withdrawn from the Consolidated Revenue Fund of the Federation except to meet expenditure that is charged upon the Fund by the Constitution or where the issue of those moneys has been authorised by an Appropriation Act, Supplementary Appropriation Act or an Act passed in compliance with Section 81 of this Constitution.”
Section 80(3) also provides: “No moneys shall be withdrawn from any public fund of the Federation other than the Consolidated Revenue Fund of the Federation unless the issue of these moneys has been authorised by an Act of the National Assembly.”
Section 81 to which Section 80(2) refers, provides: “The President shall cause to be prepared and laid before each House of the National Assembly at any time in each financial year estimates of the revenues and expenditure of the Federation for the next following financial year.”
The executive, while admitting that the power of approval of estimates lies with the legislature, it has contended that the latter’s authority does not include extensive adjustment of the estimates to the extent that the budget is rewritten by the National Assembly.
But the National Assembly has countered that it has the constitutional power to vary and determine the figures once prepared and laid before it by the president, contending that the constitution did not intend the legislature to be a rubber stamp.
The conceptual disagreement has delayed the promulgation of the budget each year since 1999, with each president, from Chief Olusegun Obasanjo to Buhari, withholding assent until an agreement was reached with the National Assembly.
The matter came to a head under President Umaru Yar’Adua, who approached the Supreme Court in 2008 for an interpretation of the constitution but was prevailed upon to withdraw the matter and seek a political resolution.
The political resolution allowed the executive to practically break the appropriation law that allows it to implement the budget according to its whims and caprices.
The problem with the political resolution option, however, was that it resulted in the serial haphazard implementation of the Appropriation Acts, as they were selectively implemented by the executive, laying the foundation for frequent friction with the legislature.
Buhari refused to sign the 2016 budget last year because, as he put it, it was padded, meaning the National Assembly had introduced far-reaching adjustments that were not part of the estimates he laid before it. It was returned to the National Assembly.
But as the year neared the mid-way mark and the disagreement persisted, the president was prevailed upon to sign the budget after an agreement was reached that the National Assembly would pass a supplementary budget that would restore 80 per cent of the original estimates.
The 2017 budget is also going through the same route.
Laid by the president before a joint session of the National Assembly on December 14, 2016, it was not passed until five months later, May 11, 2017, and transmitted to the presidency on May 19, 2017.
Upon receipt of the budget, the presidency sent it to the MDAs for vetting, to be sure that the passed estimates were in line with what was laid before the National Assembly.
More than two weeks after its transmission, the presidency was still vetting the budget, raising speculations that acting President Yemi Osinbajo would withhold assent.
Although the Senior Special Assistant to the President, National Assembly Matters, Senator Ita Enang, denied at the weekend that the acting president was going to withhold assent, THISDAY gathered yesterday that the budget might be vetoed by Osinbajo.
The presidency’s position, according to THISDAY sources, was that the budget as passed is not implementable because several adjustments made to it by the National Assembly have distorted the executive’s plan for the recovery and growth of the economy.
“There is no way the acting president can sign the budget because it has been terribly distorted,” a source said, explaining: “The budget was aligned with our Economic Recovery and Growth Plan and we found that allocations to critical projects that would help us recover from recession and lead us to growth had been cut, making it difficult for us to achieve our objective.”
He said by cutting allocations to those projects, the National Assembly had distorted the objective of the budget, which was to complete all ongoing projects by the end of this year before starting new ones next year.
The source said the National Assembly further violated this objective by introducing about 4,000 new projects, amounting to about N451billion. “What is more unacceptable is that most of these projects are not federal government matters but state and local government matters.”
Some of the critical projects, he said the National Assembly cut their allocations include the Lagos-Ibadan Expressway billed for completion by December, which had N10 billion shaved off its estimate; the Mambilla Plateau Electricity Project that took a N4.5 billion cut; and the Second Niger Bridge that was reduced by more than a billion naira.
He also referred to massive cuts to the recurrent expenditure of some ministries, departments and agencies (MDAs), saying the action would make it impossible for the affected government departments, including the Defence Ministry to meet their obligations to their staff.
THISDAY gathered, however, that negotiations were ongoing between the executive and legislature to resolve the impasse, as a meeting was underway with the principal officers of the National Assembly at press time yesterday.
Concern Mounts over Delayed Budget
Meanwhile, the continuous delay in the signing of the 2017 budget into law may have adverse effects on the Nigerian economy, which is still struggling to exit the recession, experts have warned.
The analysts, who spoke in separate interviews with THISDAY, stressed that Nigerians were yearning for improved living standards, saying that the 2017 budget is an essential tool to help stimulate economic activities.
The Director-General, West African Institute of Financial and Economic Management (WAIFEM), Prof. Akpan Ekpo, pointed out that the delay in the budget’s signing would have adverse implications for the economy.
“First of all, it further erodes confidence that people have in the economy. Then, you delay the implementation of projects. When you do that, you are creating more unemployment and uncertainty in the system.
“There are foreign investors who look at countries’ budgets on the internet to see whether they can come in. So, by delaying the budget, you scare them away. When you delay, monetary policies may not be effective.
“There are also people in the economy who are waiting for the budget to make some positive moves, you further distort their planning,” he explained.
According to Ekpo, even under the military regime, the budget used to be presented on January 1, just as he expressed concern over the perennial issues with Nigeria’s annual budgeting process.
“In economics, there is the three lag structure – recognition lag, administrative lag and operational lag. And once you delay, all those problems start to manifest,” Ekpo added.
Also, a senior lecturer at the Department of Economics, Pan-Atlantic University (PAU), Dr. Bongo Adi said the government “gives signals that contradict the rhetoric that we keep hearing every day”.
Adi stated that “no serious government in the world, confronted with the kind of challenges that this economy finds itself in, would be toying with the issue of its budget”.
“When you talk about the budget, you are talking about the core of governance and administration, because it is the budget that is going to drive the economy and the system.
“So, when the budget is delayed, it simply translates to putting things on hold. Of course, the delay has cost implications and that is what we should be thinking about.
“Just think about somebody in an intensive care unit in a hospital and the person needs oxygen, but there are persons delaying the supply of oxygen. The intention of the person delaying the supply of oxygen is obvious,” he added.
In his contribution, a former bank CEO, Mr. Okechukwu Unegbu, described as unfortunate, the politics surrounding the 2017 budget.
Unegbu who is currently the Managing Director/CEO of Maxifund Investments and Securities Plc, added: “It is unfortunate that we don’t take things seriously in this country and that is why we score low in all development indices compared with other countries in the world.”
According to him, the delay shows that the country’s political leaders don’t care about the dwindling economic fortunes of Nigeria.
He noted that even when the budget is finally signed into law, implementation becomes a problem.
“It is also painful that there are divergent comments from the presidency and ministers about signing the budget into law. So we are all worried. Small businesses are suffering because of lack of direction and nobody cares.
“For an economy in recession, the budget is supposed to be instrumental in reflating the economy, but up till now, it has not been signed. It clearly shows they are not serious,” he added.