Need for Authentication Delays Transmission of 2017 Budget to Presidency

• Senate frowns on non-submission of budgets by FIRS, NNPC, others
• Gives condition for $5.8bn loan request approval, summons Amaechi over exclusion of eastern rail line

Damilola Oyedele in Abuja

Five days after its passage by the National Assembly, the 2017 budget was yet to be transmitted to the presidency for consideration and assent on Tuesday, due to a requirement for authentication of the Appropriation Bill.

Briefing newsmen on Tuesday, Senate spokesman, Senator Sabi Abdullahi (Niger North), explained that the passage of the budget does not automatically mean that the document would be transmitted immediately to the presidency, as the joint Committees on Appropriation still had to authenticate the bill.

The document, he said, was to be transmitted on Tuesday or at the latest Wednesday to the presidency.
Both chambers of the legislature last Thursday had passed the federal spending bill and also adopted the votes and proceedings of their respective plenary sessions, in the bid to fast track the transmission of the document to the presidency.

However, Abdullahi said on Tuesday: “After the budget is passed, the Appropriation Committees have to do some authentication to avoid just any kind of document flying around.

“Any moment from now, today (Tuesday) or tomorrow (Wednesday), it would be transmitted to the presidency. Let us allow those who have been given certain responsibilities do their job, which must include certain protocols.
“Remember that we had to adjourn and reconvene to approve the votes and proceedings to allow them continue the process. If not, they would not be able to do anything on the document.

“If we had waited till today (Tuesday) to approve the votes and proceedings, it means they would have had to start today with the authentication.”

Abdullahi did not clarify what the authentication of the budget meant, but the Special Assistant to the Senate President, New Media, Mr. Omishore Bamikole, in a tweet, explained that each page of the 600-paged document had to be signed by the Chairmen of the Senate and House Committees on Appropriation, Senator Danjuma Goje and Hon. Bala Mustapha Dawaki.

“Over 600 pages of #2017Budget have been individually signed by Chairmen, Budget and Appropriation for @NGRSenate & @HouseNGR,” he said.

Senate Frowns on Agencies

In another development, the Senate also frowned on the breach of the Fiscal Responsibility Act (FRA) by government agencies, which have failed to submit their 2017 budget proposals to the National Assembly for consideration and passage.

Some of the agencies include the Federal Inland Revenue Service (FIRS), Nigerian National Petroleum Corporation (NNPC), Bureau of Public Enterprises (BPE), Nigerian Customs Services (NCS), Nigerian Ports Authority (NPA) and the Securities and Exchange Commission (SEC).

The Deputy Senate Leader, Senator Bala Ibn Na’Allah, who raised the point of order at plenary on Tuesday said it was an offence for such agencies to spend any money yet to be appropriated by the National Assembly.
“The only approach this Senate can take to assist this government in fighting corruption is to insist that gross abuse and misuse of power must be stopped by every government agency.
“The only way we can build our institutions is to radically address the issue of abuse and misuse of power,” he said.

Na’Allah sought permission to raise the matter as a motion tomorrow for debate among the lawmakers.
Ruling on the point of order, Senate President Bukola Saraki condemned the practice whereby government agencies spent money without statutory approval by the legislature.

“We are already in May. How can parastatals be operating without any budgets, especially at this time in the fight against corruption and effort to entrench transparency in governance?
“We need to take this matter seriously, because clearly these agencies are just flouting the guidelines and breaking the law,” he said.
Saraki added that the agencies were supposed to have submitted their budgets since August 2016, in line with the FRA.

“They are supposed to have come with their appropriation documents. We have now passed the 2017 budget without the budgets of the parastatals.
“But if in the middle of May, we are saying we have not received any budget from them, then which money have they been spending and with whose authority?
“We need to look into that and take a decision that may be they can only pay salaries until they bring their budgets here and approvals are given,” Saraki added.

Omission of Eastern Rail Line

The Senate President also revealed that the leadership of the National Assembly was currently in talks with the executive over the non-inclusion of the eastern corridor rail line in the planned expenditure of the $5.851 billion China Exim Bank loan.
Saraki said this in reaction to a motion by Senator Enyinnaya Abaribe, who protested on Tuesday over the omission of the rail line in the executive’s request for approval of the federal government’s 2016-2018 External Borrowing Plan.

Saraki added that all parts of the country must benefit from standard gauge railway lines.
“We are taking up this matter with the executive and that was what led to the amendment of the letter that came from the president.

“The first letter that came from the president did not specify that the South-east, North-east axis must be standard gauge lines.
“Based on the letter that came from the president, we insisted at the leadership level that every part of the country must benefit from the borrowing plan and there must be a standard gauge line and that is included for all sections of the country,” Saraki said.

He added that the loan request has been referred to the Committee on Foreign and Local Debts.
“The point we just need to make here is to ensure that the spirit of the president’s letter is followed through; that is what the emphasis is and I think we should restrict it to that.
“There should be a standard gauge line everywhere. In processing the loan request, we must see sincerity in the spirit of the president’s letter,” Saraki said.

Abaribe, in his motion, had called for suspension of the consideration of the loan request but withdrew the prayer, after the clarification was made by the Senate President.
His prayer seeking the invitation of the Minister of Transportation, Mr. Rotimi Amaechi, to appear before the Senate to explain the reason for the exclusion of the rail project for the eastern corridor was however adopted.

“I observe with dismay that the sections of the rail line that the loan is being sought for covers only a section of the country, that is, the western corridor.
“But I am aware that there is a Railway Master Plan developed by the Ministry of Transportation, which has not been referred to in the current borrowing plan,” he said.
Abaribe added that for the railway projects to have a meaningful impact in the country, all sections of the country must be covered.

“I am concerned that the complete exclusion of the eastern section that links the four zones of South-south, South-east, North-central and North-east and the key cities such as Port Harcourt, Aba, Enugu, Makurdi, Lafia, Gudi, Jos, Bauchi and Maiduguri is inexplicable,” he added.
Contributing to the motion, Deputy Senate President, Senator Ike Ekweremadu, accused the federal government of a lack of commitment to developing the rail line in the eastern corridor.

“I am aware that the federal government has been committed to rehabilitating and upgrading the railway infrastructure in Nigeria since the (Olusegun) Obasanjo administration.
“Regrettably, from the inception of that programme, the federal government has had an attitude with respect to the eastern line, arguing that that line is not profitable and so emphasis has not been placed on fixing that axis,” he said.

Ekweremadu added that while the standard gauge was being considered for the western line, the eastern line remains the old gauge.
“In 2011, the federal government awarded the contract for the rehabilitation of the eastern line from Port Harcourt to Maiduguri to three contractors in three segments, which was about N150 million, but up till now, no work has gone on in that axis.

“The simple reason being that after they generated the initial certificate to get paid, the government deliberately refused to pay them so the project was stalled,” he said.
The Deputy Senate President added that the federal government’s contract with General Electric (GE) was limited to the supply of coaches for the movement of goods and not for passengers, and was not intended to fix the railway lines.

But the Chairman of the Senate Committee on Land Transport, Senator Gbenga Ashafa, described the information in the motion as inaccurate and incorrect, adding that all railway projects approved by the current administration covered all geopolitical zones.

“The Lagos to Kano and Calabar to Lagos railway projects cover all the geopolitical zones and I will show you how: on the Lagos-Calabar coastal line, you will find the rail cutting across Obudu cattle ranch, Calabar-Uyo, Aba-Port Harcourt, Yenagoa-Otuoke, Yenagoa-Ughelli, Sapele-Benin-Agbor, Asaba-Onitsha, connecting Benin is Ijebu Ode, Ore, Shagamu and Lagos seaports,” he said.
He explained that two major states in the South-east – Abia and Anambra – were therefore covered in the railway project, adding that GE has been summoned by his committee to explain what aspect of the contract it was awarded.

“When we are making our point, we should not bring up ethnic sentiments. I agree that all the areas must be covered in the entity called Nigeria by this infrastructure programme because it is the money of the Federal Republic of Nigeria, but government is a continuum.
“The master plan is available and this administration has promised Nigerians that all sectors will be covered by the rail projects,” Ashafa added.

Senate C’ttee Kicks Against Loan Terms

But just as the Senate reached a resolution on the motion raised by Senator Abaribe, its Committee on Foreign and Local Debts faulted some of the terms attached to the $5.8 billion loan being offered to Nigeria by the China Exim Bank for the railway projects.
In particular, the condition requiring that the funds must be used for contracts to be executed solely by Chinese construction firms has raised eyebrows.

The committee chairman, Senator Shehu Sani, speaking at a meeting with the Minister of Finance, Mrs. Kemi Adeosun, on Tuesday noted that local content for the railway projects should have been taken into consideration during the negotiation for the loan, in addition to the quality of the projects.

Sani emphasised that it would be an issue to maintain that only Chinese firms could execute the contracts.
“We have raised it here, that for China to lend us $6 billion and for Chinese companies to execute the contracts, that is an issue. We want a situation whereby local content for the critical parts of the projects are taken into consideration.

“One issue being raised also is the fact that these loans will be for projects that will create jobs. We will not like to see Chinese labourers taking all the jobs,” he said.

He added: “Another issue has to do with the quality of the projects. If we are going to borrow such heavy amounts of money and these loans attract considerable interest, then the trains and the rail lines that will be constructed in Nigeria should match those of Europe, the United States and China.
“We will not like to leave behind a pile of debts for future generations without projects that are commensurate with the loans.”

Speaking further, Sani said some of the states in the country had become so indebted in the last 16 years that they do not qualify for any new loans.
“We have to depart from the culture of the past whereby funds and loans were collected in the name of projects, but were shared with cronies and friends and allotted to political projects. That will not be accepted and that is why this time around, we are being very careful,” he said.

Adeosun, in her submission, told the committee that the major condition tied to the loan was that Chinese firms would execute the projects for which the loans were being sought, adding that the China Exim Bank loan was highly competitive.

The minister added that Nigeria almost lost its credibility in accessing Chinese loans, after the country defaulted in its counterpart funding under the last administration.
This was, however, restored by the president’s state visit to China in 2015, she said.
“Concerning the execution of railway projects, it lies with the Ministry of Transportation. Ours is to facilitate the loan,” she told the committee.