Fiscal Responsibility Archives - Centre for Social Justice

Where is the 2025 Appropriation Act, Fiscal Risk Appendix and Measures on Cost Control?

Center for Social Justice — Fri, 30 May 2025 16:34:23 +0000

The Budget Office of the Federation (BOF) is charged inter alia with the responsibility of ensuring transparency and accountability in budgeting and federal government’s fiscal operations. In accordance with the Fiscal Responsibility Act (FRA), the BOF is even at the centre of monitoring and evaluating the implementation of the annual budget, assessment of the attainment of fiscal targets and reporting thereon on a quarterly basis. However, the BOF seems to be abandoning the transparency aspect of its duties.

As at the 7^th day of May 2025, the BOF deliberately failed, refused and neglected to upload the 2025 Appropriation Act to its website. The only document on the 2025 federal budget available on the website is the schedule to the Act which contains the details of the allocations to the various ministries, departments and agencies (MDAs) of government. But the legal authorization for the expenditure being the Appropriation Act has been kept away from the public. Two schedules of the Appropriation Act have been uploaded to the BOF website – https://budgetoffice.gov.ng. The stamp mark indicating the date of upload of the schedules to the website reads March 19 2025 while the second reads March 25 2025.

By a freedom of information request from the Centre for Social Justice (CSJ), the organization brought to the notice of the BOF the fact that the Appropriation Act is not on their website. Before the FOI request, a visit to the BOF to get the Act and to remind them that it is not available to the public was met with an affirmation by the BOF that the document is on their site. However, they refused to be a party to opening the site to show exactly where they posted the Act. In response to the FOI, they gave CSJ an electronic copy of the Act and still refused to upload same to their website. This raises the poser on the rationale for the decision to keep the Appropriation Act away from the Nigerian public. Did any law or policy grant a discretionary power to BOF to decide on whether to withhold fiscal information from the public? The author is not aware of any such law or policy.

It is important to understand the nature of an Appropriation Act and the reason why it should be in the public sphere. It is that law resulting from the appropriation process provided in sections 81 and 121 of the 1999 Constitution at the federal and state levels respectively. The bill leading to the Act is usually prepared by the executive and approved by the legislature. Ideally, between the preparation by the executive and approval by the legislature, there should be opportunities for popular participation and citizens input into the process. Legislative hearings, memoranda submission to the executive, etc., should be part of the process. Pray, the public that participated in the process leading up to the conversion of the bill into an Act have every reason to see the outcome of the process in which they participated.

What emerges from the appropriation process is an authorization to spend public funds, to raise revenue and the conditions and formalities precedent and contingent issues for the budget. Thus, there is a broad definition of the respective expenditure categories, details of the fiscal terms guiding the budget and sometimes, it contains the basic assumptions and key macroeconomic indicators. A typical Appropriation Act contains the following vis, authority to spend a specific sum of money within a specific tenure – usually the financial year stipulated by law, release of funds from the consolidated revenue fund, procurement and due process certification, virement, excess revenue, information to be submitted by the executive to the legislature on internally generated revenue, domestic or foreign assistance, etc. Furthermore, it contains the details of the fiscal framework in terms of sources of revenue, whether the budget is surplus or deficit, debts and borrowing, deductions, aids and grants. It therefore contains important information from the approved medium-term expenditure framework which undergirds the budget. The schedule(s) to the Act are the budget details which most Nigerians refer to as the budget.

In the light of the foregoing, this is not a document that should be hidden from the public because it is the basis of public revenue and expenditure and the authorization given by the legislature to the executive for resources to execute development projects, maintain law and order and take charge of issues that affect everyday life in a country.

Also, in accordance with the FRA, annual budget estimates and the Appropriation Bill from the executive to the legislature should be accompanied by measures on cost, cost control and evaluation of results of programmes financed with budgetary resources and a Fiscal Risk Appendix evaluating the fiscal and other related risks to the annual budget and specifying measures to be taken to offset the occurrence of such risks. Measures on cost and cost control should be prescribed in the Appropriation Act while measures to be taken to offset the occurrence of identified fiscal risks should also be part of the approved Appropriation Act. These measures re-echo now that the key assumptions of the 2025 budget and fiscal reality are at cross roads. The benchmark price and the daily production quota are at variance with the oil industry reality. From the Appropriation Act available to the author, no provision was made by either the executive or legislature on any of these demands of the FRA.

BOF is hereby called upon to immediately upload the Appropriation Act to its website. This deliberate attempt to deny Nigerians of their right to know is a gross violation of the provisions of the Constitution and the FRA and should not be allowed to continue for a day longer. If the individuals charged with the responsibility of pushing out this information to the public are unwilling to perform this duty, there is only one option left or them – they should resign.

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Appropriation Act, 2025

Center for Social Justice — Fri, 30 May 2025 16:14:45 +0000

APPROPRIATION ACT, 2025

EXPLANATORY MEMORANDUM

This Act authorises the issue from the Consolidated Revenue Fund of the Federation the total sum of N54,990,165,355,396 (fifty-four trillion, nine hundred and ninety billion, one hundred and sixty-five million,three hundred and fifty-five thousand, three hundred and ninety-six Naira) only, of which 3,645,761,358,925 (three trillion, six hundred and forty-five billion, seven hundred and sixty-one million, three hundred and fifty-eight thousand, nine hundred and twenty-five Naira) only is for Statutory Transfers, N14,317,142,689,548 (fourteen trillion, three hundred and seventeen billion, one hundred and forty-two million, six hundred and eighty-nine thousand, five hundred and forty-eight Naira) only is for Debt Service, N13,588,009,682,673 (thirteen trillion, five hundred and eighty-eight billion, nine million, six hundred and eighty-two thousand, six hundred and seventy-three Naira) only is for Recurrent (Non-Debt) Expenditure while the sum of N23,439,251,624,250 (twenty-three trillion, four hundred and thirty-nine billion, two hundred and fifty-one million, six hundred and twenty-four thousand, two hundred and fifty Naira) only is for contribution to the Development Fund for Capital Expenditure for the year ending on the 31st day of December, 2025.

Appropriation Act, 2025 (1150 downloads )

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2025 Appropriation Act, fiscal risk and cost control measures

Center for Social Justice — Mon, 12 May 2025 09:02:19 +0000

SUN NEWSPAPER

2025 Appropriation Act, fiscal risk and cost control measures

By Eze Onyekpere

As at the 7th day of May 2025, the BOF deliberately failed, refused and neglected to upload the 2025 Appropriation Act to its website. The only document on the 2025 federal budget available on the website is the schedule to the Act which contains the details of the allocations to the various ministries, departments and agencies (MDAs) of government. But the legal authorization for the expenditure being the Appropriation Act has been kept away from the public. Two schedules of the Appropriation Act have been uploaded to the BOF website – https://budgetoffice.gov.ng. The stamp mark indicating the date of upload of the schedules to the website reads March 19 2025 while the second reads March 25 2025.

It is important to understand the nature of an Appropriation Act and the reason why it should be in the public sphere. It is that law resulting from the appropriation process provided in sections 81 and 121 of the 1999 Constitution at the federal and state levels respectively. The bill leading to the Act is usually prepared by the executive and approved by the legislature. Ideally, between the preparation by the executive and approval by the legislature, there should be opportunities for popular participation and citizens input into the process.Legislative hearings, memoranda submission to the executive, etc., should be part of the process. Pray, the public that participated in the process leading up to the conversion of the bill into an Act have every reason to see the outcome of the process in which they participated.

What emerges from the appropriation process is an authorization to spend public funds, to raise revenue and the conditions and formalities precedent and contingent issues for the budget. Thus, there is a broad definition of the respective expenditure categories, details of the fiscal terms guiding the budget and sometimes, it contains the basic assumptions and key macroeconomic indicators. A typical Appropriation Act contains the following vis, authority to spend a specific sum of money within a specific tenure – usually the financial year stipulated by law, release of funds from the consolidated revenue fund, procurement and due process certification, virement, excess revenue, information to be submitted by the executive to the legislature on internally generated revenue, domestic or foreign assistance, etc. Furthermore, it contains the details of the fiscal framework in terms of sources of revenue, whether the budget is surplus or deficit, debts and borrowing, deductions, aids and grants.It therefore contains important information from the approved medium-term expenditure framework which undergirds the budget. The schedule(s) to the Act are the budget details which most Nigerians refer to as the budget.

Also, in accordance with the FRA, annual budget estimates and the Appropriation Bill from the executive to the legislature should be accompanied by measures on cost, cost control and evaluation of results of programmes financed with budgetary resources and a Fiscal Risk Appendix evaluating the fiscal and other related risks to the annual budget and specifying measures to be taken to offset the occurrence of such risks. Measures on cost and cost control should be prescribed in the Appropriation Act while measures to be taken to offset the occurrence of identified fiscal risks should also be part of the approved AppropriationAct. These measures re-echo now that the key assumptions of the 2025 budget and fiscal reality are at cross roads. The benchmark price and the daily production quota are at variance with the oil industry reality. From the Appropriation Act available to the author, no provision was made by either the executive or legislature on any of these demands of the FRA.

Categories: Opinion

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CCB Enforces Commitment to Assets Declaration Compliance Enforcement

Center for Social Justice — Thu, 27 Mar 2025 12:36:56 +0000

The Code of Conduct Bureau (CCB) has restated its commitment to enforcing compliance to asset declaration by public office holders without fear of favour.

Chairman, Dr. Abdullahi Bello Usman gave the assurance on Wednesday in Awka, Anambra state during a Two-day Rule of Law and Anti-corruption (ROLAC 2) capacity building workshop on the On-line Assets Declaration System.

The engagement themed, “Improving the Effectiveness of Anti-corruption Processes and Reforms” was organized by Centre for Social Justice (CSJ) in collaboration with CCB.

Usman, represented by Head, Education Department, Koyonda Edward described assets declaration as not just a statutory obligation but a moral imperative.

According to him, asset declaration remained the bedrock of ethical governance which today’s reality could not ignore.

He however regretted that corruption remained one of the most formidable obstacles to nation’s development, which he said erodes public trust, stifles economic growth and perpetuates inequality.

He said, “The CCB, as a corner of Nigeria’s integrity framework, recognises that declaration of assets is not just a statutory obligation but a moral imperative. It is the bedrock of ethical governance. We cannot ignore the reality of our time.

“Manual systems are susceptible to inefficiently, opacity and abuse. This is why the transition to digital Assets Declaration Platform is not just an upgrade but a revolution.

Participants during a Two-day Rule of Law and Anti-corruption (ROLAC 2) capacity building workshop on the On-line Assets Declaration System.

“By leveraging technology we eliminate bureaucratic bottlenecks, reduce human interference and create an acceptable trail that deters malfeasance. This system will empower public officials to declare Assets seamlessly while enabling real-time monitoring by shareholders.

“Anti-corruption reforms are not sole responsibility of government agencies. They demand a societal movement. When citizens actively demand accountability, and public servants lead by example, we create an eco-system where corruption cannot thrive.

“CCB reaffirms its commitment to this cause. We shall continue to innovate, collaborate and enforce compliance without fear of favour. But we need – the Media, Civil Society, and every Nigerian – to be our allies in this fight.”

Participants During the workshop

While noting that the workshop was not merely about deploying tools, but building capacity, fostering ownership and nurturing collaboration, the CCB boss urged participants to approach it with openness, vigor and sense of urgency.

“Within these two days, we will demystify the technical and operational aspects of the on-line platforms; address challenges- cybersecurity, accessibility and compliance that may arise; strengthen partnerships between institutions, civil societies and citizens to ensure collective vigilance.

“Let us harness the power of technology to safeguard our Nation’s resources and restore public confidence. Your feedback is vital. The system must be user friendly, inclusive and resilient. Your insights will shape its success,” he added.

Appreciating the CSJ and ROLAC for their invaluable collaboration, generous funding and unwavering commitment to this cause, Usman said, “Your partnership underscores a shared vision: a Nigeria, where transparency, accountability and rule of law are not mere ideas but living principles guiding our nation’s progress.

“To our dedicated participants – Public Officials, Civil Society representatives and stakeholders, your presence here reflects your resolve to be at the forefront of the Nigeria’s anti-corruption journey.

“I urge everyone of us to approach this workshop with openness, vigor and a sense of urgency. Let us harness the power of technology to safeguard our Nation’s resources and restore public confidence. Together, let us build a legacy of integrity for generations to come”

Lead Director, Center for Social Justice (CSJ), Eze Onyekpere attributed increasing corruption in the system to public ignorance to asset declaration of public office holders, which he said the engagement was targeted at addressing.
He said, “The workshop is aimed at sensitizing and enlightening public servants and CSOs on the online asset declaration system.

“According to the law, both the President and cleaner in the local government are obliged to declare their assets.

“We’re also here to sensitize the public on the need to contribute to the verification process and that of entrenching accountability and transparency in the system.”

While hinting that the workshop was the maiden edition at the state level, Onyekpere, a lawyer assured cascading the training to grassroots through train-the-trainers approach.

Also speaking, Head, Information Communication Technology (ICT), John Sheshi said the workshop was intended to increase public awareness on importance and efficacy of assets declaration transition from manual to digital.

He listed core goals of cyber security to asset declaration to include Confidentiality, Integrity and Availability of information (CIA) as well as authenticity, non repudiation and trust.

Group photograph after the Two-day Rule of Law and Anti-corruption (ROLAC 2) capacity building workshop on the On-line Assets Declaration System.

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Press Release: TO THE CENTRAL BANK OF NIGERIA(CBN) AFTER THE EXTENSION OF THE OLD NAIRA NOTES SWAP DEADLINE

Center for Social Justice — Mon, 30 Jan 2023 07:17:08 +0000

Centre for Social Justice (CSJ) welcomes with relief the approval by President Muhammadu Buhari, of the request by Central Bank of Nigeria (CBN), for the extension of the deadline for swapping old naira notes with the redesigned naira notes from January 31 to February 10, 2023. CSJ believes that many hardworking Nigerians, especially in the rural areas would have lost their honest income if the January 31st deadline was not extended.

CSJ recalls that the major challenge necessitating the clamour for extension was the failure, refusal and neglect of CBN to make available the new redesigned notes in sufficient quantity to match the legal and legitimate needs and demands of Nigerians. If the CBN had made available enough new notes from the date it was launched till the end of January 2023, coupled with massive sensitization, there would have been no need for the extension. The money deposit banks were still issuing the old notes to customers as at Friday 27th January 2023 when the deadline had not been shifted from the end of the month.

CBN’s claim that it had issued out sufficient quantity of new notes is unfounded and not supportable by empirical evidence. CBN mandated banks only to pay the new notes from ATMs and to continue to put the old notes in circulation through customers who came to withdraw money across the counter. This is a clear contradictory instruction which guaranteed that old notes continued in circulation. There are no reports that cash limits for individuals and corporate organizations were breached. Moreover, at the public hearing organized by the House of Representatives on this matter, senior bank officials averred that banks got only ten percent of the value of old notes deposited with the CBN. So, how can this percentage be sufficient?

If by any empirical calculation, the percentage stated to have been received by the banks is the usual ratio between deposits and cash releases by CBN to the money deposit banks, then the CBN will be guilty of the failure of supervision and effective regulation. The CBN has wide powers to supervise and sanction errant banks if for any reason their officials were diverting the new notes.

CSJ therefore calls on the CBN to release sufficient quantum of the new notes to meet the demand of Nigerians, to the extent that such demands are in compliance and not above the cash withdrawal limit. But if the CBN continues in its business-as-usual approach, which it manifestly deployed in the last three months, there would be another clamour for extension of the deadline. Finally, the CBN should ensure that every old note that gets into the banking system is automatically withdrawn and not paid back to customers whether from automated teller machines or across the counter.

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Buhari and Emefiele’s monetary policy disaster

Center for Social Justice — Mon, 09 Jan 2023 10:29:20 +0000

The economic challenges and strong headwinds facing Nigeria have not been properly addressed by political parties and candidates. For anyone with a deep understanding of the challenges of an economy that is tottering on bankruptcy, the postulations and promises of the candidates and their political parties are confounding. This discourse reviews a critical issue in the economy in the area of monetary policy and ends with questions on how presidential candidates will deal with the challenge.

The Central Bank of Nigeria and the Major General Muhammadu Buhari(retd.) led Federal Government have conspired and egregiously violated the provisions of S.38 of the CBN Act on advances from the CBN to the Federal Government for funding the federal deficit. The advances were in excess of the statutory limit – five per cent of the previous year’s actual revenue. We now have more than N22tn in ways and means, being high-powered money, not backed by value, pumped into the Nigerian economy and mismanaged by the administration. The administration could not pay back within the statutory one-year period. It has sent a request to the National Assembly to convert the advances into debt so that it can be securitised by a long-term bond.

There are matters arising out of this state of affairs. The first is about a President and Commander-in-Chief, the Minister of Finance, and the Chief Law Officer in the person of the Attorney General for the Federation, all conspiring to break the law. The Attorney General is included because he ought to have advised the President and the Minister of Finance properly and if they refused his advice, the coast was clear for him to do the needful. They conspired to form the guilty mind and went ahead to commit the offence through the physical act. Yes, it is an offence against the Nigerian people, a desecration of fundamental fiscal and monetary norms amounting to an abuse of office, which should have attracted impeachment and removal from office.

The second is about the constitutional role of the National Assembly in the exercise of the oversight role over the executive. The rubber stamp National Assembly saw nothing wrong in the advances, heard nothing wrong and continued the pretence that all was well and sang about it in their hosanna choir mentality. Despite the humungous remuneration paid to the members of NASS, they failed the Nigerian people and left their work undone. The third is that the CBN has been granted independence in its enabling law. The CBN ought to have resisted the attempt to violate its enabling law and ensure that it released advances in accordance with the law. But the CBN governor saw himself as a politician and indeed, had sought presidential nominations in the ruling All Progressives Congress before he was stopped by Buhari.

Furthermore, the same Debt Management Office that has been mouthing inanities on the sustainability of Nigeria’s debt, despite evidence to the contrary, is now sounding the alarm bell of Buhari leaving N77tn in debt for the next administration. The DMO had resisted all noble advice to begin to take steps to prune down borrowing while mouthing inanities like debt to GDP ratio, when it was clear to all that debts are not repaid with dead portions of the GDP that contribute nothing to the revenue. The foregoing demonstrates a failure of institutions and the rule by strong men and women who consider themselves above the law.

The president has forwarded a request to the NASS to essentially convert the huge ways and means to a loan; converted to a debt to be securitised by a bond. This is simply asking the NASS to approve a loan request after the money has been drawn down by the executive and spent. Nigeria is now faced with a dilemma – to simply continue making provisions for repayment within the budget which will be extremely costly because the money to do this will be borrowed at a higher interest rate or to go for a long-term bond which will be cheaper.
The recent attempt at redesigning the naira has further shown the flight from reality which has become the hallmark of CBN’s monetary policy. Across all the states of the federation and in all the banks, the new notes have been extremely scarce based on the very poor supply by the CBN. The author of this discourse was still paid with old notes in the last couple of days of withdrawing money from the banks. The CBN Director of Corporate Communications, Osita Nwanisobi, was reported in the front page of a major newspaper as stating that the fact of banks not having enough new notes was false and merely speculative and insisted on the sanctity of the January 31, 2023 deadline. Pray, how else do you describe monetary policy insanity? When a CBN spokesperson lies blatantly and continues marketing facts which he knows to be false and deliberately contradictory to the lived reality of the majority of Nigerians, then he and his bank are living in a different world and a different reality. Sane persons therefore ought to call him and his superiors to order and possibly consider consigning them to an asylum where they belong. A CBN spokesperson cannot be sounding combative like the media aides of the president or the aides of the ruling party. His response to monetary policy issues should be guided by evidence.

In consideration of the foregoing, it is not clear from the manifestos how whoever emerges as president in the next couple of weeks will deal with these issues especially, the humungous ways and means advances. Will he limit the advances to what is allowed by law or will he continue in the old manner? This is a challenge for all candidates, especially for a candidate who promised to continue Buhari’s legacy. It is not going to be rosy despite the election promises. The options and choices for the next president are limited to between a rock and a very hard place. There is no easy choice.

There is no need to rush currency redesignation and change in view of the limited capacity and lethargy of the CBN in meeting its statutory obligations. Rather, the CBN should work at its pace, which is beyond the January 31, 2023 date, to ensure that monetary policy implementation eases the severe economic burdens on the people, rather than increasing and multiplying it.

Finally, the CBN Act needs to be amended to provide punishment for key officers of state, from the president, finance minister, director of the Debt Management Office, the CBN governor and acquiescing key officers of the National Assembly who violate the rules on ways and means. The power to prosecute them should be left to the civil society (all Nigerians) and not any compromised attorney general who is an appointee of the President and serves at his pleasure.

Once more, happy new year to all Nigerians of goodwill.

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2023 federal budget estimates: dead on arrival

Center for Social Justice — Tue, 11 Oct 2022 10:33:22 +0000

The President, Major General Muhammadu Buhari (retd.), last Friday presented the 2023 Appropriation Bill and its details to the National Assembly. Budget presentation usually discloses the planned income and expenditure and accompanying fiscal, monetary and other policy frameworks for the new year. This discourse reviews the key components of the proposed 2023 federal budget and what it holds for the economic position of Nigeria. It seeks to answer the question: whether the estimates are realistic and achievable in the light of official economic data and previous macroeconomic performance.

The underlying macroeconomic projections are the oil price benchmark of $70 per barrel; daily oil production estimate of 1.69 million barrels (inclusive of condensates of 300,000 to 400,000 barrels per day); and exchange rate of N435.57 per US Dollar. The oil price benchmark and oil production (mbpd) are provided at a time Nigerian National Petroleum Company has become a limited liability company and is no longer under obligation to simply sell crude oil and remit the proceeds to the Federation Account for sharing by the three tiers of government. The implication is that it can only remit profits at the end of a year or at agreed intervals. It is acknowledged that the quantum and price of crude oil are very important considerations in the profitability of NNPC Limited. However, the most important consideration is that the profit is not necessarily tied to the price of crude. The company will pay for investments and other business outgoings before it can return a profit. Furthermore, not all profit will be distributed as dividends as the company will be entitled to retain some part of it for future investments.

The Naira has been depreciating due to low oil sales and revenue, capital flight, restrictive policies, etc. Nigeria’s multiple exchange rates demand action for harmonisation and convergence or at least, steps towards harmonisation. The Parallel Market hovers around N735; Investors and Exporters window is about N434 while the 2023 budget proposal is N435.57. This creates room for rent-seeking and arbitrage. The budget exchange rate projection is a flight of fancy and not grounded on reality.

The proposal is for a total expenditure of N20.5tn. To fund the expenditure is total available revenue of N9.73tn including the retained revenue of 63 Government Owned Enterprises estimated at N2.42tn. This creates a deficit of N10.78tn representing 4.78% of estimated GDP and this is above the 3% threshold set by the Fiscal Responsibility Act 2007. The deficit is to be met by new borrowings totalling N8.80tn, N206.18bn from Privatisation Proceeds and N1.77tn drawdown on bilateral/multilateral loans secured for specific development projects. In essence, the projected actual revenue is 47.5% of expenditure while the deficit funding is 52.5% of expenditure. What is the implication of this projection for our debt reality?

Nigeria’s outstanding debt at the end of June 2022 is reported by the Debt Management Office at N42.845tn ($103.312bn). This excludes the N20tn in Ways and Means financing from the Central Bank of Nigeria, which when added brings the total to N62.845tn ($151.538bn). When the new borrowing proposal is added to existing debts, it will come up to N71.64trn. Federal Government may need to borrow more than projected in 2023 because of two major reasons. The first is that the asset to be privatised has not been specifically identified and privatisation proceeds have been a funding item in previous budgets without any accruing revenue. The second is the perennial poor performance of revenue estimates. As at 31st July 2022, Federal Government’s retained revenue was N3.66tn, excluding the revenue of GOEs, a mere 63% of target. There is no guarantee that the revenue projection of N9.73tn will be met.

The expenditure proposal is made up of statutory transfers of N744.11bn; non-debt recurrent costs of N8.27tn including personnel costs of N4.99tn, pensions, gratuities and retirees’ benefits of N854.8bn; overheads of N1.11tn. Also, capital expenditure projection is N5.35tn, including the capital component of statutory transfers; debt service of N6.31tn; and sinking fund of N247.73bn to retire certain maturing bonds. Thus, at N6.55tn, debt/sinking funds is the highest expenditure head. If 2022’s actual revenue accrual is used as a benchmark (just N3.66tn retained revenue in July), the whole retained revenue may be dedicated to debt service in 2023. When the proposed new borrowing is juxtaposed with capital expenditure, it shows that Federal Government is not borrowing to fund capital expenditure but also to service debts and pay salaries. This is contrary to the provisions of the Fiscal Responsibility Act.

The framework of the 2023 budget proposal shows that Federal Government has given up on critical reforms it needs to make. The reform is on fuel subsidy. The first component is that Federal Government was expected to conduct an open and transparent public inquiry to determine the actual PMS consumption, on the basis of which a final subsidy decision will be made. There is prima facie evidence to indicate that the figures churned out by NNPC Limited are inflated. The second component is a phased withdrawal of fuel subsidy after certifying the actual fuel consumption. But Federal Government has shied away from this critical reform. Furthermore, Federal Government was expected to take targeted, concrete and deliberate steps to tackle oil theft. Again, it has thrown its hands in the air considering the less than 2mbpd oil production estimate.

Between 2020 to 2022, a total of N16.4tn was foregone as tax expenditure while Federal Government and the states continued to pile up debts. The proposal in the Medium Term Expenditure Framework 2023-205 to give away about N5.204tn in 2023 while Federal Government and the states incur humungous deficits is difficult to reconcile under fiscal responsibility rules. S.29 (1) of the FRA is titled restriction on the grant of tax relief. It states: “Any proposed tax expenditure shall be accompanied by an evaluation of its budgetary and financial implications in the year it becomes effective and in the three subsequent years, and shall only be approved by the Minister, if it does not adversely impair the revenue estimates in the annual budget or if it is accompanied by countervailing measures during the period mentioned in this subsection through revenue increasing measures such as tax rate raises and expansion of the tax base”.

There is no documentation showing evidence of compliance with the provisions of the FRA on these tax expenditures. There is no evidence of an evaluation of their budgetary and financial implications in the years they were granted and in the three subsequent years. These expenditures adversely impaired the revenue estimates and there were no countervailing measures through revenue increases, etc. It is therefore recommended that the FRA should be amended in the Finance Act 2022 to remove the power to grant tax expenditures from the Minister or the Executive and only place a duty on the Executive to document the recommendations, proposals and justification for tax expenditure subject to the approval of the legislature. Also, tax expenditures should be capped at not more than 10% of projected revenue every year or within the medium term.

It is not too late to adopt the above reforms and thereby drastically reduce the deficit and make the budget more realistic. Otherwise, the 2023 budget appears dead on arrival.

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2023 polls: Making state administrative resources work for all

Eze Onyekpere — Mon, 08 Aug 2022 10:56:57 +0000

The quest for political power and the enormous benefits associated with political power have made it irresistible for persons and groups of persons under the umbrella of political parties of variegated moral and ethical backgrounds to venture into politics. Politicians see politics as an investment that yields quicker returns than any other business. Right from the return to democracy in Nigeria in 1999 to the present time, the abuse of state administrative resources has been on the ascendancy and the reason for this can be traced to the process through which political leaders emerge into public offices. Politicians deploy huge resources to sponsor candidates into elective positions. Those who are already in political positions employ all manners of incumbency techniques to retain their seats or to retain their political parties in power.

As the race to Aso Rock and various State Houses officially draws near and intensifies, several political parties are adopting different strategies to either retain power or take over power from the incumbents. About four political parties seem to be mounting serious campaigns, especially for the presidency with the number thinning down at the state level. The Independent National Electoral Commission has assured and reassured Nigerians of free, fair and credible polls but there are still challenges littering the electoral landscape.

By S.95 (2) of the Electoral Act 2022 which re-enacts S.100 (2) of the 2010 Electoral Act (as amended), state apparatus including the media shall not be employed to the advantage or disadvantage of any political party or candidate at any election. This discourse reviews the various shades of state administrative resources and how they are abused and posits that this abuse will undermine the credibility of 2023 polls if INEC, political parties and law enforcement do not take steps to stem the abuse.

SARs are defined as resources put at the disposal of public institutions for the conduct of governmental or public affairs. SAR includes legislative, regulatory, coercive and institutional resources. Abuse of SAR for electioneering campaigns is illegal, unethical and against best practices in SAR management. Institutional resources generally refer to government resources like employees, vehicles, offices, contractors, equipment, stationery, building, symbols of authority, etc. The Code of Conduct for Political Parties 2013 in S.3 (17) states that: All parties shall discourage their members in government from using their power of incumbency to the disadvantage of other parties or their candidates during elections. Use of government vehicles, equipment and facilities for partisan political campaigns, secondment of officials paid at the public expense for partisan purposes and using the insignia of office to canvass support are all manifestations of abuse of institutional resources. The recent appointment and assumption of office of Festus Keyamo, a Minister of the Federal Republic of Nigeria, paid at the public expense as the spokesperson of the All Progressives Congress presidential campaign falls under this prohibition. He cannot be paid and sustained with money belonging to all Nigerians while he takes a partisan position to the disadvantage of other political parties. Mandating contractors to contribute to political expenses is also an abuse of institutional resources as well as procurement fraud and abuse of due process.

Regulatory and coercive resources can be deployed by incumbent administrations to the disadvantage of the opposition. This can be undertaken in a number of ways including discriminatory campaign and procession permits, regulation of the use of public places, discriminatory enforcement of laws and regulations, causing misrepresentation, disenchantment and loss of reputation to the opposition, partial dissemination of information, etc. Recently, state governments in Kaduna and Osun states have deployed refusal of permit to use a venue on the opposition. Late hour cancellation of an already given permit due to “security reasons”; unjustified and arbitrary cancellation of a booking to use a venue for a rally, for instance, a stadium or a public hall are all abuses of regulatory resources.

The task of maintaining state security and preventing corruption and abuse of office can be used to the disadvantage of the opposition. Unveiling charges of corruption that may not scale the prosecution hurdle in the courts is an instance. In a country like Nigeria where there is a popular agreement that corruption has contributed in no small measure to the political and economic backwardness of the nation, a charge or allegation of corruption even if unsupportable by credible evidence can be a hurdle on the path of the opposition. At least, it paints the victim in a bad light and tars him with social deviancy, which will take time to erase in popular minds. Discriminatory enforcement of laws can also lead to unfavourable circumstances for the opposition. Opposition candidates can also be arrested and or charged to court on framed-up charges during electioneering campaigns. The first objective would be to present the candidate negatively to the public while at the same time taking his time away from campaigns to save himself from conviction and imprisonment. The criteria for identifying frivolous charges would include: whether the agencies had the opportunity of prosecuting the opposition figures but deliberately failed, refused and neglected to do so but rather chose to mar their reputation through a public allegation of corruption or any other crime; the timing of the law enforcement action; the supporting facts disclosed and whether the facts can legally sustain a charge and conviction in law; whether the law enforcement authorities are in disobedience of a court order; whether the candidate has been prosecuted and discharged for the same offence in the past.

Public media resources belong to all Nigerians, especially the tax-payers. The provisions of the Code of Conduct for Political Parties and National Broadcasting Code call for equal and fair access to the use of state-owned media and adherence to the principles of pluralism of ideas and opinion, equal opportunity and air time to be provided to all political parties, candidates and views, with particular regard to the amount of time and belt during electioneering campaign period. Media resource abuse comes in various forms and includes the following: only candidates supported by the incumbent government have news coverage in the state media; opposition candidates are reported in disparaging terms; incumbent candidates’ activities are given live coverage as a news item; news organs sympathetic to the opposition are heavily regulated, and discounts in public media available only to state parties. It is therefore expected that public media like the Nigeria Television Authority and Radio Nigeria, etc., should give equal opportunities to all candidates and political parties and restrain from using taxpayers’ money for the support and benefit of the incumbent political party and its candidates

Enforcing this beautiful provision of the Electoral Act requires the collaboration of INEC, civil society including the media and academia, law enforcement agents, etc., to breathe life into the enactment. The 2023 polls provide an opportunity to entrench ethics in government, which starts with credible polls where SAR is made to work for all and not abused by incumbents.

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MPR HIKE: ATTACKING THE SYMPTOMS WHILE IGNORING THE FUNDAMENTAL CHALLENGES

Center for Social Justice — Fri, 22 Jul 2022 18:02:27 +0000

Centre for Social Justice (CSJ), a Nigerian knowledge Institution, notes with great caution the increase of the Monetary Policy Rate (MPR) from 13.0 to 14.0 percent by the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) at its meeting held on July 18^th and 19^th 2022. This increase is coming on the back of a similar increase of the MPR at the May 2022 meeting of the MPC by 150 basis points to 13.0 percent. The MPR had been increased on the two occasions in the CBN’s bid to rein in the current rise in inflation and to maintain price stability.

We acknowledge the fact that the uptick in inflation is not necessarily a Nigeria phenomenon, but one that is predominant in advanced economies, emerging markets and developing economies. We further acknowledge that many Central Banks across advanced economies have adopted an aggressive monetary policy regime and the financial policies of most countries have resorted to a tightening monetary policy stance. This has been done against the background of the Russia-Ukraine War, shocks arising from global trade dislocations and supply chain disruptions.

We recall the assumptions of the May 2022 MPR increase where the MPC indicated that tightening would narrow the negative real interest rate margin, improve market sentiments and restore investor confidence, moderate inflationary pressure pass-through to exchange rate depreciation and moderate the speed of capital flow reversal, provide incentives for foreign capital inflows and sustain remittances. It also suggested that tightening could moderate government domestic borrowing. However, the assumptions did not properly contextualize the overall picture of slow growth, high unemployment and rising inflation.

It appears that the May 2022 MPR increase did not achieve its objectives and there is no empirical evidence to suggest that this second July 2022 MPR hike by 100 basis points will achieve the desired objective. This is premised on the fact that the inflationary push is to a great extent coming from rising insecurity, exchange rate depreciation, rising energy costs – electricity and petroleum, unsustainable debt profile of the Federal and State Governments and the excessive and wasteful spending associated with elections in Nigeria as we move towards the 2023 elections. Furthermore, Nigeria’s continued importation of refined petroleum products and failure to take advantage of the increase in oil price increase – a fallout of the Russia – Ukraine War, has contributed to the pressure.

In the circumstances, continued increase in the MPR may not be the solution to the rising inflation. The rising inflation appears to be a symptom of more fundamental economic and political challenges which if addressed would reasonably moderate the impact of other shocks, especially exogenous shocks on the economy. These challenges are beyond what monetary policy interventions alone can solve. They require a combination of fiscal, labour, monetary and trade policies as well as political action on the part of the Federal Government of Nigeria. It is also imperative to state that the inflation challenge may not likely abate in the near future. Essentially, there should be short term, medium to long term projections for addressing inflation and associated economic challenges.

CSJ therefore recommends the following to prevent the rising inflation from entering into the galloping mode.:

v Take steps to reduce insecurity which has severely impacted on food inflation and eroded local and foreign investors’ confidence in the Nigerian economy. Restoring security will generally improve national productivity beyond the agriculture sector.

v Mainstream policies to improve economic growth through a combination of reform and productivity focused fiscal, monetary, labour and trade policies.

v Take urgent and targeted steps to increase crude oil production through the new NNPC and other investors. Embarrassing excuses and apologies for failure by the Nigeria’s two oil ministers will not solve the low production challenge.

v Hold security agencies accountable for the reduction of industrial scale oil theft. This will provide more resources to governments in the Federation and as such reduce borrowing and indebtedness.

v FGN to account for expenditure on refurbishing and repair of the moribund refineries while allowing the new commercial NNPC to expeditiously privatize or concession the refineries. This will in the near future reduce our demand for foreign exchange for importation of refined petroleum products.

v Control waste and corruption in public expenditure management. Reducing the cost of governance is an irreducible minimum demand.

v Curtail wasteful election related expenditure through the meticulous implementation of the 2022 Electoral Act.

The journey to economic growth, reduction of poverty, unemployment and inflation begins with targeted steps taken with a full understanding of the intricate links between various policies of government and the need for their harmonization.

Download the full document Below

JULY 2022 MPR HIKE

The post MPR HIKE: ATTACKING THE SYMPTOMS WHILE IGNORING THE FUNDAMENTAL CHALLENGES appeared first on Centre for Social Justice .

The unconstitutionality of the Unclaimed Funds Trust Fund

Eze Onyekpere — Mon, 11 Jan 2021 06:53:42 +0000

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The unconstitutionality of the Unclaimed Funds Trust Fund

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Nigeria is undergoing an economic and fiscal crisis. This is a product of decades of mismanaging the national economy by successive governments. The mismanagement has manifested in the inability to invest available resources in a sustainable manner, diversify and transform the economy from overreliance on crude oil, develop human capital and reduce corruption. At no time in recent memory has the economic crisis been so dire compared to what we have witnessed in the last five years. There have been two recessions and an economy that grew at less than the population growth rate.

In a period like this, with declining government revenue, increasing public indebtedness and growing infrastructure deficit, the government needs to look for credible ways of funding public expenditure. Enter the Finance Act 2020, its Crisis Intervention Fund and a sub-fund called the Unclaimed Funds Trust Fund. First, Nigerians need to be brief on the history of the 2020 Finance Act. It was an Act enacted with unimaginable speed, clinical efficiency and where the National Assembly appeared to be working from the answer to the question. The public hearing was advertised in national newspapers on a Tuesday for the hearing held on a Thursday and by the following Monday, the Senate committee had already prepared a report in favour of the bill and the Senate in plenary voted to pass the bill the same Monday. Unprecedented speed! It bears interrogating the legality and propriety of the Unclaimed Funds Trust Fund.

The Unclaimed Funds Trust Fund provides that:“From the commencement of this Act, any unclaimed dividend of a public limited liability company quoted on the Nigerian Stock Exchange and any unutilised amounts in a dormant bank account maintained in or by a deposit money bank which has remained unclaimed or unutilised for a period of not less than six years from the date of declaring the dividend or domiciling the funds in a bank account shall be transferred immediately to the Unclaimed Funds Trust Fund”. The proviso is that this provision shall not apply to bank accounts owned or belonging to the Federal Government, state government or local government or to any ministry, department or agency of government. The Act further provides that such “unclaimed dividends or unutilised amounts in a dormant bank account transferred to the Unclaimed Funds Trust Fund shall be a special debt owed by the Federal Government to the shareholders and dormant bank account holders respectively and shall be available for claim, together with the yield thereon by the shareholder or bank account holder at any time pursuant to the perpetual trust”.

This Trust Fund is created subject to S.44 (1) and (2) (h) of the Constitution of the Federal Republic of Nigeria 1999 as amended. Banks and companies are under obligation at the pain of punishment of a fine not less than five times the amount of the money in question to comply with this “law”. The first point to note is that what is at stake is private property, private money in bank accounts which have gone dormant and dividends which have not been claimed. Dormant accounts can be reactivated by their owners or legal beneficiaries in the event the owner is no more and the same can be stated of unclaimed dividends. The second is that private property by S.44 (1) of the Constitution cannot be compulsorily acquired without the payment of adequate compensation and the owners have the opportunity of access to a court or tribunal to determine their claim and interest in the property. The third point is while the Act seeks to rely on S.44 (2) (h) which states that nothing in subsection (1) of this section shall be construed as affecting any general law relating to trusts and trustees, it also states that the “unclaimed dividends or unutilised amounts in a dormant bank account transferred to the Unclaimed Funds Trust Fund shall be a special debt owed by the Federal Government to the shareholders and dormant bank account holders respectively”. Pray, do you create a debt by legal fiat, without the consent of the owners of money to be “borrowed”. A debt situation is created by the consensus of the lender and a proposed debtor and the terms are generally agreed before the lender parts with the debt sum. It is not the practice in any part of the world and it does not accord with common sense and reason that the debtor sets the terms for “borrowing” money from the creditor. Where are the terms for repayment? To be set by the debtor after the debtor has taken possession of the creditor’s money! This is exactly what this Act seeks to do by the foregoing provisions.

Can the executive and the legislature in good conscience come under the protection of the law of trusts? Generally, it is accepted that atrust is created by a settlor, who transfers title to some or all his property to a trustee, who then holds title to that property in trust for the benefit of the beneficiaries. Can a person, entity or government that has no iota of claim as owner or co-owner of a property create a trust over the property of another? Can the government constitute itself into a trustee of a property that belongs to citizens? Can a transaction be a trust as well as a creditor-debtor relationship at the same time? The answers to these posers are clearly in the negative. Trusts are created in an atmosphere of integrity and managed with utmost good faith which is not the case in this unholy transaction. A party (government) with the sole intention of grabbing the property of another cannot be the initiator and creator of a trust while at the same time appointing himself the trustee.

The Act did not create any trust known to law as to make this Unclaimed Funds Trust Fund to come under S.44 (2) (h) and the entire attempt is illegal and unconstitutional. Nigeria is broke and its leaders have refused to adjust to this reality and cut down waste, reduce corruption and manage available resources in a sustainable way while uniting the nation in the struggle for economic growth and development. Rather, leadership at the federal and other levels are behaving like they have another country to escape to after ensuring the economic, social and political collapse of Nigeria.

This unholy property grabbing Act needs to be challenged in a court of law and through all legitimate means and eventually thrown to the dustbin of history. The Act is a full manifestation of economic dictatorship, brazen violation of the right to private property and full circle return to dictatorship. Fundamental rights like the right to free speech, personal liberty and freedom of opinion are already under intense threat in Nigeria; if we allow our properties to be taken by fiat by rulers who do not see themselves as accountable to anyone, we will regret our docility when full blown dictatorship is restored.

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The unconstitutionality of the Unclaimed Funds Trust Fund

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