RESPONSE TO THE 2018 BUDGET SIGNING SPEECH OF PRESIDENT MUHAMMADU BUHARI

RESPONSE TO THE 2018 BUDGET SIGNING SPEECH OF PRESIDENT MUHAMMADU BUHARI

By Centre for Social Justice

Response to Paragraphs 1- 4: Submitting the 2018 budget estimates on the 7^th of November 2017 was late and cannot in any way lead to the restoration of the budget calendar. It left the legislature with roughly about one functional and working month to the end of the year and that would not be enough time to finish the appropriation process in the legislature and come out with a clean copy of the budget.

Nigeria’s fiscal laws are quite clear on their intendments. First, the Fiscal Responsibility Act (FRA) mandates the executive through the Minister of Finance to prepare the Medium Term Expenditure Framework (MTEF) and have it endorsed by the Executive Council of the Federation (EXCoF) before the end of the second quarter, being in June every year. It is pertinent to recall that the MTEF anchors the budget. The expectation of the law is that after endorsement by EXCoF, it should be sent immediately to the National Assembly (NASS) for their approval and this should ideally be in July. Again, the law expects the NASS to approve this early and return same to the executive so that budget preparation can proceed and by the first week of September, the Appropriation Bill will be with the NASS. This did not happen in 2017.

Thus, the executive shares part of the blame in the delay. But this does not in any way justify a budget staying for about six months with NASS. In between the NASS approval process, they had complained to the President about recalcitrant MDAs who did not come forward to defend their allocation and this was in March 2018. Recall that the President then ordered all MDAs to ensure that they defend their votes. Essentially, the process of budget preparation started late, the budget was submitted late to NASS and the NASS approval also was very late.

Further Responses to 4 and Response to 5: It is not about an organic budget law. This story line has been in the news for over ten years. First, let the 1999 constitution be amended to give both the executive and the legislature a time frame to submit and approve the budget. The present scenario where the President or Governor can submit the budget to the legislature at any time within the preceding year encourages executive recklessness while the absence of a time limit for the legislature to do their job fuels legislative rascality. I thought that this proposal was one of the bills sent by NASS to the President for his assent in the extant constitutional amendment process? What happened to the bill?

Further, when the NASS proposed and the President assented to the 2017 budget with a clause that it will run for 12 consecutive months from the date of signature; what were they thinking about? The 2018 bill that I saw forwarded to the President contains a similar clause. So, who is fooling who? The executive and legislature agreed that the budget will run for 12 months starting from June 12, 2017 being the date of assent. Did it run for 13 months?

Response to Paragraphs 6-15:  This is about the old and perennial contest and turf war about the powers and limits of the power of the executive and legislature in the budgeting process. It is not new and will not go away unless the two arms of government understand the need for cooperation, collaboration and mutual respect. Starting from the executive, the President’s statement that it is the executive that knows and defines its policies and projects shows a poor understanding of the fact that what he calls the executive policies and projects are national policies and projects belonging to not just the three arms of government but the Nigerian people.

Consultations, engagement and literally “carrying along” are required of the executive in the process of budget preparation. Otherwise, if as seems the case, the executive do their own thing (executive policies and projects), the legislature will be entitled to prepare their own brand new budget in the exercise of the powers of appropriation granted to them by the 1999 Constitution. Thus, the expectation was that grand parametres of the budget would have been agreed at the highest level between the executive and legislature. Have the President, Senate President and Speaker of the House of Representatives been meeting to discuss policies, budgets and matters of state? There is no evidence. All the reports out there are about bickering, the branding of saints and sinners and positioning for 2019 elections.

NASS members should have had the opportunity to present their projects of interest to Ministries, Departments and Agencies during the preparation Medium Term Sector Strategies by the respective MDAs. The iteration involved in preparing the MTSS would have weeded out inappropriate projects but the opportunity was lost because most MDAs no longer prepare MTSS and the few that prepare do not involve NASS members in the discussions.

The President’s speech has raised a poser; did the executive and legislature not agree on the amount to be invested in constituency projects? If they did not agree; why? If they agreed, did the legislature exceed the agreement?  The institutional approach of not spending resources too thin as proposed in the Projects Implementation and Continuity Bill stipulated in Vision: 202020 has been abandoned by the administration.

Some statutory transfers are tied to the volume of the Consolidated Revenue Fund and any increase in the benchmark price of crude oil (as happened in the 2018 budget) will automatically increase them. The Universal Basic Education Fund is an example. And part of the budget increase includes the Basic Health Care Provision Fund of the National Health Act which the executive have failed, refused and neglected to provide for in previous budgets.

Response to Paragraph16: Great idea that the President seeks an amendment to the budget in areas he is not satisfied. But did he need to go public rather than first bringing his reservations to his fellow party members in the legislature? His public views would have arisen when there is a refusal on the part of the legislature to respond to the issues. It should have been a lobby, give and take situation between the executive and legislature. May be, by the time the legislature responds in the same coin, we may not have an agreement on the issues and the executive legislative feud will continue.

Response to Paragraph 17: A claim to have spent N1.5trillion in the 2017 capital vote is hanging in the air. Nigerians need the specific details of the projects that the money was spent on. This is the demand of the reporting requirements of the Fiscal Responsibility Act. Let the Minister of Finance give us the details as stated in the FRA.

Response to Paragraph 19:  That a borrowing plan to fund the 2018 budget has not been sent to NASS or approved by the end of June speaks volumes of the planning that goes into our budget. The implication is that a good part of the money for capital projects is not available and those projects will only be funded when the money is raised. Admittedly, we are late already and will be further late in budget implementation by this very fact.

Conclusion: Is anyone learning from what happened in 2018 to start the 2019 process on time? Repeating the same experiment, year after year, without altering any of the conditions and variables and expecting different results is the classical definition of insanity!

May God continue to bless Nigeria.

Eze Onyekpere Esq.

Lead Director