Amid Hiccups, N’Assembly Maintains January to December Budget Cycle
Despite controversies, the 9th National Assembly last Wednesday, passed the 2023 Appropriation Bill, in its bid to maintain its January to December Budget Cycle Policy, a critical part of the Legislative Agenda it has been implementing since 2019, reports Sunday Aborisade
President Muhammadu Buhari on Friday, October 7, 2022, presented the 2023 budget estimates tagged, “Budget of Fiscal Stability and Transition” to the joint session of the National Assembly.
The Budget has a total figure of N20.51trillion, an increase of N750 billion as against the N19.76 trillion projected in the 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, earlier passed by the federal parliament.
The total federally-collectible revenue was estimated at N16.87 trillion in 2023.
Oil price benchmark was pegged at $70 per barrel; with a daily oil production estimate of 1.69 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day).
The exchange rate was pegged at N435.57 per dollar; with projected GDP growth rate of 3.75 per cent and 17.16 per cent inflation rate.
The expenditure comprised of a statutory transfers of N744.11bn, non-debt recurrent costs of N8.27 trn, personnel costs of N4.99 trn, pensions, and gratuities and retirees’ benefits of N854.8bn.
Overheads projection was put at N1.11 trn; capital expenditure of N5.35 trn, including the capital component of statutory transfers; debt service of N6.31 trn; and sinking fund of N247.73bn to retire certain maturing bonds.
President Buhari told the federal lawmakers that the sum of N470 bn intervention fund had been provided for in the 2023 budget estimates to fund tertiary institutions.
He also said in line with the plan to accompany annual budgets with Finance Bills, partly to support the realization of fiscal projections, current tax and fiscal laws/regulations are being reviewed to produce a draft Finance Bill 2022.
With this, he assured that once ongoing consultations are completed, the Finance Bill 2022 would be submitted to the National Assembly to be considered alongside the 2023 Appropriation Bill.
Not comfortable with the huge budget deficits which had characterised the Buhari’s annual budget since 2020, President of the Senate, Dr Ahmad Lawan, on the occasion, proffered suggestions on how to reverse the increasing trend.
Lawan said the nation’s economy was still challenged by dearth of revenues, and the idea of deploying revenues from the Oil and Gas to support the diversification into real sectors like agriculture, manufacturing, mining, among others, which were under serious threat.
According to him, oil thieves had declared war on the country and its people and that if necessary measures were not taken to stop the criminals immediately, the economy would be devastated.
He advised that deficit could be reduced by stopping the theft, and also other options should be considered to source more revenues for government.
Lawan said, “The large scale and massive stealing of our oil, is concerning, as this reduces drastically the revenues available to the Government.
“With conflicting figures, projections have put our losses from this malaise at between 700,000 to 900,000 barrels of crude Oil per day, leading to about 29 to 35 per cent loss in Oil revenue in the first quarter of 2022.
“This represents an estimated total fall from N1.1trn recorded in the last quarter of 2021 to N790bn in the first quarter of this year.
“The situation has worsened. Recently, the loss of our Oil has reached 1 million barrels per day.
“Translated into monetary terms, our loss is monumental. The figures show we are not able to meet the OPEC daily quota of 1.8million barrels per day.
“Mr. President, I consider the Oil thieves the worst enemies of our country. The thieves have declared war on our Country and our people.”
The Senate President suggested taking off some of the major revenue generating agencies from direct funding by placing them on cost of collection of revenues, as was done for Federal Inland Revenue Service (FIRS), Nigeria Customs Service.
In this regard, Lawan said agencies like Nigeria Ports Authority, (NPA), Nigeria Communications Commission, (NCC), Nigeria Maritime Administration and Safety Agency, (NIMASA), among others, could be given encouraging cost of collections of revenues.
Findings by THISDAY Correspondent, however revealed that weeks after President Buhari laid the national budget the federal lawmakers failed to conduct the traditional, critical budget assessment in their various defence sessions with the Ministries, Departments and Agencies (MDAs) because of the fact that the fiscal document contained no significant capital component, being an election year.
While some of the committees conducted their budget defence sessions behind closed doors, others did so in the open but without the critical scrutiny of the documents presented.
Following the suspension of plenary on October 12 to enable members to attend to the MDAs’ budgets, no serious activity was witnessed until the Appropriation Committee announced that chairmen of the various panels should be prepared to submit their reports from the first week in November.
For example, the Chairman, Senate Committee on Appropriations , Senator Jibrin Barau, specifically said the reports on the 2023 budgetary proposals would be laid on the floor of the red chamber on Wednesday, November 30, 2022.
He therefore, urged Chairmen of the various committees to adhere strictly to time table drawn for the consideration of the budget .
Barau voweved that strict adherence was expected from all the committees. He also threatened that budgets of MDAs not worked upon by the committees in charge of their oversight, would be submitted as presented by Buhari.
According to him, budget hearing and engagements with heads of ministries and agencies, by the Appropriations sub – committees, were expected to take place from 13th October to 3rd November while submission and defence of budget reports by the sub-committees, had been fixed for 4th to 11th November 2022.
He added that collation and harmonization of reports by appropriations Committee under his leadership would take place from Friday, 11th November to Friday, 25th November , 2022.
No sooner had the Appropriation panel Chairman handed down the threat than the committees started adopting the quick fix option of ‘take a bow and go ‘ for budget considerations of the MDAs.
Specifically, the Committee on Interior headed by Senator Kashim Shetimma (APC Borno Central), adopted the option for the Ministry of Interior, Fire Service and Correctional Service by telling the Minister of Interior, Rauf Aregbesola , to lay proposed 2023 budgets of the Ministry along with those of the affected agencies and take a bow and go.
Shettima, who is the Vice Presidential candidate of the All Progressives Congress in the 2023 general election, however, said the take-a-bow approach was adopted to enable the heads of the paramilitary agencies to attend to the security challenges confronting the nation, at the wake of the recent terror alert by the United States.
However, the Senate Committee on Special Duties carried out a more diligent duty in its scrutiny of the Ministry of Humanitarian Affairs and Disaster Management when it discovered a whopping N206bn was inserted into the Budget.
The Minister, Sadiya Umar Farouq, promptly disowned the N206bn inserted into it’s Ministry Budget by the Ministry of Finance.
Umar-Farouk who appeared before the Senate Panel on Special Duties to defend 2023 Budget claimed that the Ministry requested for some projects for the North East Development Commission (NEDC) and National Social Safety Net Project in 2022 budget which was not released but the Ministry is surprised that money is now more than ten times of 2023 Budget of the Ministry.
Trouble started when one of the Committee members, Senator Elisha Abbo, asked the Minister about N206 billion in the budget budget.
But, the Minister in her response said, “Yes we made mention of the projects for 2022 which was not released and part of it was for the NEDC.
“The money was not released and now we have seen it recurring by almost 10 folds and we are also going to clarify from the ministry of finance to know why this increase despite the fact that the previous year, the money was not even released for the project.”
Similar cases of budget padding by the Ministry of Finance, Budget and Economic Planning running into billions of Naira were also discovered in estimates submitted by the National Universities Commission (NUC), Ministries of Defence, and Power.
The accounting officers in charge of the affected MDAs told the Senators that they had no knowledge of the line items running into billions of naira in their 2023 budget proposals.
The Minister of Finance, Zainab Ahmed, however blamed computing error for the anomaly.
She told the federal lawmakers that the computing errors, “resulted in a wrong description of the projects.”
The National Assembly could not meet it’s deadline for the passage of the 2023 Appropriation Bill following the late transmission of the Finance Bill 2022 by President Buhari on December 20.
Buhari explained in the letter that the proposed bill when passed into law, would provide the fiscal support for the implementation of the 2023 federal budget.
As the respective committees of the nation’s apex legislative institution were getting set to scrutinise the Finance Bill, President Buhari on December 21, forwarded a 2022 supplementary budget of N819 billion to the National Assembly.
In separate letters to the Senate President, Dr Ahmad Lawan and the Speaker of the House of Representatives, Hon Femi Gbajabiamila, the President sought the lawmakers’ approval of the budget which would be funded with domestic borrowing from the Central Bank of Nigeria.
He said all of the additional budget of N819,536,937,813 for 2022 were capital expenditure and it became necessary due to the devastation caused by floods on farmlands and road infrastructure.
The development, coupled with series of errors discovered in the 2023 fiscal document forced the leadership of the National Assembly to reconvene after the Christmas Break and spend additional two legislative days to tackle the Finance Bill and the Supplementary Appropriation Bill and passed them along with the 2023 Appropriation Bill last Wednesday.
The approval of the Supplementary Budget increased the 2022 Budget deficit to N8.17trn, and deficit-to-GDP ratio of 4.43 per cent.
It also pushed the country’s domestic debt to over N22 trn.
The new borrowing also increased the Federal Government’s domestic borrowing in 2022 to N3.33trn.
The federal lawmakers in the approved 2023 Budget, raised the N20.51trn which was presented by President Muhammadu Buhari to N21.82trn.
It showed an increment of over N1.3 trn in the proposed estimates by the executive.
Out of the total sum, N967.48bn is for statutory transfers, N6.55 trillion is for debt service, N8.32 trillion is for recurrent (non-debt) expenditure while the sum of N5.97 trillion is for contribution to the development fund for capital expenditure for the year ending on the 31st day of December, 2023.
Further breakdown of the budget indicated that the Ministry of Works and Housing got the highest capital vote of N398.2bn, followed by Ministry of Defence which got N285bn; while Ministry of Agriculture and Rural Development got N248.3bn, among others.
Notwithstanding the series of controversies that trailed the process of the budget consideration and approval, the President of the Senate in his New Year message, expressed joy that the passage of the 2023 Appropriation Bill was done before the end of 2022 fiscal year.
Lawan said, “We were also able to reset our financial years to make our budget cycle stable and predictable.
“This change has helped immensely in the implementation of projects and programmes, as well as in general performance of the national budgets.
“This is one legacy of the ninth National Assembly that we have sustained since 2019, as reflected again, in the passage of the 2023 Appropriation Bill on Wednesday, 28th December, 2022.”
