News

CSJ Briefs Media on its 2021 Budget Review; Publishes Document Listing Frivolous, Inappropriate, Unclear and Wasteful Budget Items in the 2021 Federal Appropriation Bill.

Share on facebook
Share on twitter
Share on whatsapp
Share on telegram

On November 18, 2020, the Centre for Social Justice briefed the media on its annual review of the 2021 federal appropriation bill. The session which was held at CSJ’s conference room was attended by top media outfits like the Channels TV and AIT. Armed with its expertise in Public Finance, the CSJ budget review aims to improve the budget. This review is especially timely given that the National Assembly is also reviewing the Appropriation Bill.

The Lead Director of the Centre, Barrister Eze Onyekpere, while presenting the budget review document, discussed ways to shore Nigeria’s diminishing revenue in the face of falling oil prices. Some points raised include: greater accountability and transparency in the government’s licensing process in order to realize the projected signature bonus of N677.015 billion; deduction at source of past due operating surplus remittances of government owned enterprises (GOEs); capping cost-to-revenue ratio of GOEs to a maximum of 60%-70%; and recovery of all monies due to the treasury but held up in several MDAs per the recommendations of the Auditor General of the Federation.

The Director also made reference to revenues from stamp duties accruing at the CBN which has not yet been credited to the federation account. Still on revenue, he pointed out that time was running out to pass the Petroleum Industry Bill, as the world is gradually moving away from the use of petrol. Finally, he called for a review of tax expenditure as it relates to tax waivers granted to some businesses. A total of about N4.691 trillion can be saved from lifting these waivers.

Barrister Eze Onyekpere lamented the incessant borrowing by the government considering its inability to repay. He said between January and August 2020, the federal government realized revenues of N2.52 trillion but expended N2.137 trillion on debts repayment, leaving a mere N387 billion to take care of salaries, overheads and capital projects. He referred to this method of financing government expenditure as being unsustainable. A key recommendation by the CSJ is that borrowing can be significantly cut down by utilizing public-private partnerships through the Infrastructure Concession Regulatory Commission (ICRC) collaborating with relevant MDAs to prepare proper business proposals for funding beyond the treasury.

He also called on Federal Government to, in obedience to court orders, prepare the consolidated debt limits of the three tiers of government, in accordance with section 42 of the Fiscal Responsibility Act which mandates these limits. This will also be in obedience to the un-appealed judgement of Federal High Court (in Centre for Social Justice vs The President Federal Republic of Nigeria and four others).

It was also recommended that the constitution be amended to set a definite timeframe for the President and Governors to present the budget estimates (e.g. the first week of September), while the legislature ought to conclude the approval process not later the second week of December every year. It was further recommended that budget preparation templates be specific to each agency.

He called on the National Assembly to request the results of the evaluation of programmes done in 2019 and 2020 as benchmarks for next budget cycles. He also called for the disaggregation of all statutory transfers in accordance with the un-appealed judgement of Federal High Court in Centre for Social Justice vs Honorable Minister of Finance in 2013. Finally, he recommended that service wide votes should not be more than five percent of the total budget. A copy of the review document can be found on CSJ’s website.

Speaking on the second document which lists out frivolities in the 2021 federal appropriation bill, Barrister Onyekpere identified a total of N325,334,458,139 in frivolous budget items. Some highlights of these frivolities include: an annual routine maintenance of N4.5 billion in the villa – a figure that can match the value of the entire facility. A total of N389 million was budgeted for foodstuff in the villa averaging more than N1 million a day. Security votes keep on appearing even at places where they are not needed. Welfare packages is another constant line item which appears in budgets of various Ministries. It appears to be superfluous given that welfare should already be taken care of in the personnel votes.

The Lead Director also pointed out the lack of specific details needed to track some of the line items. He identified some of NALDA’s projects which were vague but billed to be in 6 geopolitical zones as. The vagueness of these projects is an avenue for looting. He also emphasized a provision of the budget call circular (item 4.2.5) which says that vehicles and renovations should be excluded from capital budget, except when the need is overwhelming. This provision was clearly violated by the ministry of information in their request for N162 million for purchase of vehicles. A copy of the frivolities document can be found on CSJ’s website

Share on facebook
Share on twitter
Share on whatsapp
Share on telegram

Latest Blog Articles