?Jonathan ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ???Mark
2011 Appropriation Bill still in limbo
Director-general of the Budget Office based in the Presidency, Bright Okogwu, lamented recently that the impasse over the 2011 budget has lingered for long. He said because, unlike the original document with a deficit of three per cent of Gross Domestic Product (GDP), the legislators passed a N4.97 trillion budget, with the deficit being four per cent of GDP.
?The Minister of Finance (Olusegun Aganga) has said it is not implementable. We want to make it more implementable,? Okogwu said, adding that the Presidency and the National Assembly (NASS) have been discussing for some time, and both recognise the need to come back to a more realistic budget deficit level, because the Fiscal Responsibility Act stipulates the budget not exceed two per cent of GDP deficit level.
?Both sides recognise that this is the case. I am optimistic that even at preliminary discussions, we will arrive at something rewarding. I am optimistic because we both took this into account in terms of the pace of work we set out to do. Both sides recognise that this has to be sorted out before the new parliament comes into being. So we have a very tight target that we both recognise and we are working towards,? Okogwu stressed.
The DG spoke in Lagos at the launch of the International Monetary Fund (IMF)?s semi-annual sub-Saharan African Regional Economic Outlook.
He assured the gathering of IMF, Finance Ministry and Central Bank of Nigeria (CBN) officials, members of the private sector, and the media that even when the budget has not been signed, the law allows the government to spend a certain percentage of previous year?s budget meanwhile.
Aganga, represented at the forum by Danladi Kifasi, Permanent Secretary of the Finance Ministry, said Nigeria has a lot to learn from the global financial crisis which has taught other countries great lessons in terms of policies and interventions needed for macro-economic stability and growth.
He noted that Nigeria?s economy grew 7.85 per cent last year, higher than the estimated 3.9 per cent global growth rate and the 4.7 per cent average for sub-Saharan Africa.?
With an average growth rate of 6.65 per cent over the last five years, Nigeria?s growth continues to out-perform those of many other economies.
Presidency plans supplementary budget
The Presidency is said to be contemplating presenting a supplementary budget to NASS, even while presidential assent to the N4.971 trillion 2011 budget hangs in the balance.
While details of the N4.971 main budget are yet to be fine-tuned, the supplementary one is expected to cater for what is left out of it.?
Sources close to the Senate Appropriation Committee had told our sister publication, Daily Independent, last week that the NASS is looking forward to the extra budget, ?though we have adjusted some figures in the 2011 budget which was passed into law two months ago.?
It was learnt that the delay in presenting the 2011 Appropriation Bill to President Jonathan for assent is due to the delay in transmission from NASS, which has now promised to sort out the remaining details and send it to him.
Asked why Nigeria has no current budget five months into the year, a presidential source explained that ?the Constitution allows the president to authorise and expend funds up to six months in any fiscal year before a new budget comes into effect.
?The last budget expired in March, but Jonathan can spend at least 50 per cent of the total budget approved by the National Assembly for 2011.?
On resumption of plenary on May 3, the legislature explained that delay in signing the budget into law was due to some ?details? being ironed out.
Senate spokesman, Ayogu Eze, confirmed to reporters that the review of the approved budget by lawmakers is legitimate in as much as Jonathan is yet to sign it.
His words: ?I am aware that efforts are being made for the details of the 2011 Appropriation to be finalised, so that he (Jonathan) can sign it and possibly present a supplementary appropriation which the government has already hinted will come up.
?I am not aware that he (Jonathan) has refused to sign it, because the details were not even worked out before we went for election, and those details are being worked out before they sent it for his assent.
?The budget can only be reviewed if it is returned as a substantive bill. My understanding is that the supplementary appropriation can take care of whatever misgivings may arise in the budget.?
?That is the way to cure whatever defect is in that budget. We are human beings; everybody was going for election and they wanted the budget passed. But we have found out that we need to do a supplementary appropriation; so we don?t have any problem with that.?
Fears over budget failure?
Last March, Aganga warned that the 2011 budget passed by NASS is too unwieldy to be implemented. Aganga said the only way the Federal Government can implement the budget is by slicing off a chunk of the fiscal appropriation act recently approved by the lawmakers.?
Aganga, who spoke from London through his Special Assistant on Media, Okwudili Ojukwu-Enendu, said the approved budget is too expansionary, and its high levels of deficit and borrowing make it a risky plan.
?The 2011 budget is supposed to signal the beginning of fiscal consolidation, but we now have another expansionary budget, which is unimplementable. If we are to build our economy on a solid foundation and avoid the boom and bust of the past, it is critical that we embrace discipline in the way we manage public finances. We cannot continue like this.
?I will be advising that we engage with the National Assembly to resolve these areas of concern. We have always had a very good relationship with the relevant National Assembly committees. So, I am optimistic that we can resolve these areas of concern very quickly,? he added.
The minister?s apprehension was the second such concern raised by a senior Federal Government official in less than 24 hours, on issues affecting the 2011 budget.
At the end of the 75th Monetary Policy Committee (MPC) meeting in Abuja on March 22, the CBN governor, Sanusi Lamido Sanusi, told journalists that the high expenditure outlay in the budget was not supportive of CBN?s drive for monetary policy effectiveness.
?The current fiscal stance (in the budget) is inconsistent with the objective of maintaining stability in exchange rates, prices and interest rates. The committee, therefore, believes that unless the fiscal stance is reversed, the economy would have to bear a high cost in terms of pressure on foreign reserves, high interest rate and/or higher level of inflation,? Sanusi warned.
However, while approving the budget proposal, NASS discarded the estimates, passing an Appropriation Bill of N4.9 trillion while raising the benchmark of oil price from the proposed $65 per barrel to $75.
Chairman, Senate Committee on Appropriation, Iyiola Omisore (PDP, Osun), who said the budget was passed after consultations with Ministry of Finance officials, told journalists that during deliberations on the estimates, the executive brought additional proposals of N312 billion to augment key priority expenditures of ministries, departments and agencies (MDAs).
Omisore was, however, silent on why the legislators raised NASS?s share of the budget from N111.23 billion to N232.73 billion, an increase of N121.5 billion, or 4.7 per cent of the entire budget. He was also not forthcoming about the additional increment of N433 billion, which jerked the final estimates to the N4.971 trillion the lawmakers approved.
Aganga had warned lawmakers during a budget defence session in February on the implications of tampering with the benchmark figure of $65 per barrel, saying it could spell doom for the economy, should the oil price fall below that level during the year, considering that the excess crude oil account (ECA), which is almost depleted, may not be there anymore to augment the budget as was done last year.
Highlights of the budget, which was passed on the last legislative day before the Assembly adjourned for the April general elections include N496 billion for statutory transfers, N445 billion for debt servicing, N2.46 trillion for recurrent expenditure, and N1.56 trillion for capital expenditure.
Ojukwu-Enendu said it was not clear yet how the matter would be resolved, as the president may withhold his assent until the grey areas are cleared or he could sign it and later send a supplementary appropriation bill to NASS to correct the anomalies.
Legal tussle looms
There are indications that the executive may drag NASS to court after the general elections to seek judicial interpretation of the individual powers of both arms of government as regards the preparation and amendment of the country?s annual budgets.
Investigations revealed that the executive and the legislature had, over the years, disagreed on the interpretation of the constitutional provision, which gave NASS the powers to amend the budget, as prepared by the executive.
A Presidency source said that recent controversies over sector allocations and key assumptions of the budget had made it imperative for the two arms of government to define the limits of their respective powers through a court ruling.?
The source, who craved anonymity because of the delicate nature of the matter, said: ?The Constitution, if well-interpreted, does not say that the National Assembly can increase or decrease allocations in the budget. However, some people have said that provision in the Constitution is not clear; that is, it does not state categorically whether NASS can increase or decrease allocations.
?The only choice the executive has is, therefore, to go to court for proper interpretation. We need to separate the powers and play within the rules to be able to prepare and implement realistic budgets annually.??
The source hinted that Federal Government would have taken that step before now, but for the need to allow the April elections to go undisturbed.
Another top government official said the decision to go to court would be taken mainly to make the budget clearer and to seek to know the limitation of legislators? powers.
He said: ?The Constitution is very vague. The budget only takes effect if passed into law by the National Assembly. So, as it is, the legislature has appropriation powers. When passed, it becomes law with presidential assent.
?But if the president does not sign it (Appropriation Bill) after 30 days, it is automatically a law. I think the framers of the Constitution were actually thinking that the National Assembly should have powers to moderate executive recklessness and reduce spending. Unfortunately, our own legislators are even more reckless than the executive. They instead push for spending increases.?
The source said the court would have the final say, noting that ?it depends on who heads there first, the National Assembly or the executive?.
Section 81(1) of the 1999 Constitution states: ?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 following financial year.?
Section 83(1) of the Constitution adds: ?The National Assembly may by law make provisions for the establishment of a Contingencies Fund for the federation and for authorising the president, if satisfied that there has arisen an urgent and unforeseen need for expenditure for which no other provision exists, to make advances from the fund to meet the need.?
But experts say Section 80 of the Constitution gives immense powers to the Assembly over control of public funds.?
Section 80(4) states: ?No monies shall be withdrawn from the Consolidated Revenue Fund, or any other public fund of the federation, except in the manner prescribed by the National Assembly.?
A Senior Advocate of Nigeria (SAN), Mr. Tayo Oyetibo, said the controversy should have been referred to the court because it had been on for too long.
He said: ?Either party has to go to court to settle the issue once and for all. The court should make a pronouncement on the right of either party, whether the National Assembly has the powers to cut or increase expenditure in the budget or not.
?It should have been referred to the court by now because the issue has dragged on for too long. There is a need for judicial pronouncement on the issue.?
A national budget is a tool of national development and government policy. It is difficult to see what positive overall objective this budget can accomplish. For instance, while the CBN targets single-digit inflation and lending rates, the budget is inflationary and this is compounded by recent fiscal policies that un-ban certain consumer imports and liberalise others.?
Again, while federal health institutions are decrepit, health got a recurrent vote of N203.333 billion and a paltry N63.39 billion for capital; the N50.3 billion for capital projects in the transport sector will make very little impact and it is difficult to imagine how the N59.56 billion voted for capital projects in the education sector will serve the existing 36 federal universities and six new ones, 104 federal colleges and many polytechnics and colleges of education.
A messy budget
Nigeria?s national budgets have always been characterised by poor planning, articulation, monitoring and implementation.?
Budgets are hardly implemented except the recurrent aspect.?
The Finance Ministry said only 54 per cent of capital budget was released to MDAs in 2009.?
Unspent capital funds were N400 billion in 2007 and N350 billion in 2008.
In 2010, though only N1.7 trillion or 36.9 per cent of the N4.6 trillion budget was earmarked for capital projects, only N749 billion had been released by mid-November of the year.?
The failure to creatively use the annual budgets to pursue development targets has derailed the country?s aspiration to become one of the world?s top 20 economies by 2020, as this, according to the IMF, world require annual minimum GDP growth of 10 per cent. The 7.4 per cent forecast for this year falls short and is, in any case, driven largely by increased oil earnings.
The true measure of a budget is the extent to which its strategy for economic growth delivers results. According to the World Bank, 70 per cent of the population remain in poverty, while power, transport, education and health infrastructure are inadequate and decrepit.?
The government should be more professional and result-oriented in budget preparation and implementation.?
The government has already admitted its incompetence by seeking international consultants for budget monitoring and implementation.?
In its 2010 Open Budget Index, a United States (U.S.) think tank, International Budget Partnership, scored Nigeria a mere 18 per cent on transparency in the budgeting process, less than half the average 42 per cent score among the 94 countries surveyed and far below Ghana (54 per cent) and Liberia (40 per cent).?
Nigeria had scored 20 per cent in 2006 and 19 per cent in 2008.
Budgeting is a serious business that sets the tone for development in a polity, usually for a 12-month period, and a government without a financial plan (budget) is walking blindfolded. Nigeria?s executive and the legislature have, for over a decade been unserious in planning the national budget. No federal budget since 1999 has been fully implemented arising from incompetence and the fact that the budgets are unimplementable.?
In the past, when only the Finance Ministry was preparing the budgets, there was timeliness and efficiency. Now that the ministry, the National Planning Commission and the Budget Office are all involved, incompetence, delays and opaqueness dominate the process, as professionalism has taken flight.
In the United Kingdom (UK) and U.S., budgets are presented to legislators well in advance, and where disagreements and delays occur, they are usually centred on principles and overriding public interest. For instance, U.S. officials are already discussing aspects of the 2013 budget. No responsible parliament hikes budgets primarily to raise the perks of members as Nigerian lawmakers routinely do.?
Continuous delays and spending without a plan in place clearly have implications for good governance: they facilitate looting and corruption. When legislators raise estimates, they derail the entire plan, since income, revenues and expenditure are inter-related.?
The Presidency should be pragmatic and professional in budgeting and resist the blackmail and greed of lawmakers. The citizens too should take more interest in the budgets, realising that their welfare is dependent on faithful implementation of development plans that will reverse the dire national infrastructure deficit and rampant unemployment currently put at over 25 per cent by the World Bank.?
Civil society groups should play active roles in budget debates and implementation, while the organised private sector (OPS) should step up its lobbying to ensure that investment-friendly policies are embedded in the budgets.?
Section 82 of the 1999 Constitution that allows spending without budgets for six months is precarious and should be reviewed; the government should not run without a budget. As the Federal Government begins a new four-year term next week, there is a need for an innovative strategy for timely budgeting. On no account should budgets be delayed again.
Article source: http://www.independentngonline.com/DailyIndependent/Article.aspx?id=34167
Source: http://www.thepeterprinciple.co.uk/budget-of-incompetence-fraud/
manny pacquiao fight k outback steakhouse gaia nascar 500 days of summer chess
clear columbus dispatch marisa miller sarah shahi painting state farm charles darwin
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.