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  • Budget: Senators, Reps split over details

    Budget: Senators, Reps split over details

    •Principal Officers angry with Saraki, Dogara
    •There is no division among us’ –Senate Leader Ndume

    Like President Muhammadu Buhari, many members of the National Assembly, including some principal officers, are demanding from the leadership of the national legislature, details of the 2016 budget just approved.

    President Buhari is insisting on seeing   the details approved by the National Assembly before appending his signature to the budget.

    However, it emerged yesterday that the budget details are known only to a few members of the Appropriation Committees of both chambers.

    This has not gone down well with other National Assembly members who are shocked that some legislators are more favoured than others in the affairs of the legislature.

    The Nation gathered that many principal officers are angry with Senate President Bukola Saraki and House of Representatives Speaker Yakubu Dogara for not calling the chairmen of the Appropriation committees, Alhaji  Danjuma Goje (Senate) and Jibrin Abdulmumin (Reps) to order.

    Senate Leader Mohammed Ali Ndume denied last night that there was any division among National Assembly members on the issue.

    After a delay of about three months, the National Assembly on March 23 passed the 2016 budget of N6.06trillion, down from the N6.077billion proposed by the executive.

    But President Buhari declined to assent to the Appropriation Bill because the details were not attached.

    Buhari said in the US that any time the details are made available to him he would scrutinize it line by line.

    Sources in the National Assembly said that most Senators and Reps were only given a summary of the budget   of the details.

    Attempts by Senators and Representatives all week to have the details failed, it was gathered.

    A principal officer, speaking on the issue yesterday said: “Senators and Representatives are split on the 2016 budget. As I talk to you, most Senators and Representatives have not been given the details of the budget. What the Appropriation Committee made available to each chamber was the summary.

    “Only a few privileged members of the committee or favourites have access to the details. So, the President was right in insisting on the details before signing the budget into law. He has the backing of some Senators and House of Representatives.

    “How can I be a Principal Officer without access to the details of the budget? Some of us are being reduced to passengers in the administration of the National Assembly.

    Another Principal Officer said:  “There is tension in our midst, we are becoming agitated too. You don’t run the legislature as a personal thing. What is personal about the budget that you are hiding from the leadership?

    “Some of us are worried that we are being treated like kids by the Appropriation Committees of the two chambers. Under normal circumstances, we are not supposed to be running after the committee chairmen.

    “Our position is that the President of the Senate, Dr. Bukola Saraki and the Speaker of the House, Yakubu Dogara should call Goje and Jibrin to order.”

    A high-ranking Senator said: “It is true that we don’t have the details but we are watching the development. Some Senators are unperturbed because they want everything to collapse.

    “This unhealthy politics on budget details may lead to a deeper crisis among us unless Saraki and Dogara act wisely in checkmating Goje and Jibrin.”

    A member of the House of Representatives said: “There is a lot of suspicion surrounding the budget details. I think the details are being used to fight a proxy war.

    “Whatever it is, the nation will be worse for it. It is actually absurd to ask the President to adopt the PDP model of signing the budget before getting the details. We agreed to do things differently this time around and the Appropriation Committees in the two chambers should adhere to the new era.”

    A PDP member of the House said: “If there is trust between the Executive and the Legislature, I don’t see anything wrong with the President in signing the Appropriation Bill into law without the details. This was the case in the last 16 years.”

    However, Senate Leader Mohammed Ali Ndume denied any division among the federal legislators on the alleged non availability of the budget details to some members.

    He said that if there were differences, they would have been sorted out at the harmonization conference of the two chambers.

    He added that because there were no differences, the two chambers passed the same version of the budget.

    Asked specifically whether Senators had details of the budget they claimed to have passed on March 23, Ndume said they did.

    He asked rhetorically: “How can you pass a budget without the details?”

    He noted that when President Buhari presented that budget, details of the fiscal document were included.

    He said that after the passing the budget, “the nitty-gritty of the details will be printed out and each page endorsed by the chairmen of the Appropriation Committees of the two chambers.

    He added, “This is a government of change and things are being done differently. During the PDP regime, the budget would be passed and sent to the president for assent without the details. The details of the budget would then be transmitted to the president later.

    “This time around, the president is saying that he cannot sign the budget without the details. It is not a big deal; the details of the budget will be transmitted to the president shortly.

    “The budget is about 1800 pages in three volumes. The chairmen of the Appropriation Committee of the two chambers will go through the details page by page and sign them. Some time you have to print out the copies for them to sign.

    “There is no division or differences whatsoever. Such difference would have been settled at the level of harmonization if there was any.

    “The details of the budget will be sent to the president. It will not take longer than necessary. The two chairmen are working assiduously. The president is saying before signing let me see the details. It is normal. The constitution is clear that the president can spend half of the budget before even signing it.”

  • 2016 Budget: As contractors return to site

    The truth is good food is worth waiting for. Given the energy exerted on the original copy of the 2016 budget document submitted to the National Assembly by President Muhammadu Buhari and the period of time devoted to review, criticize, edit and rework the document, one can easily understand why Nigerians are confident that the nation’s fiscal and monetary policies this year would make a positive difference.

    Perhaps, what fuels the optimism further is the resolve of the Federal Government to rebound the economy through the injection of N350 billion into the system in the next few months.

    According to the media reports, the decision was reached at the end of the two-day retreat for governors of the 36 states of the federation and members of the National Economic Council (NEC) at the Presidential Villa in Abuja.

    Reports quoted the Minister of Finance, Kemi Adeosun, as saying that part of the money will help offset the debt owed local contractors, who had laid off their workers for lack of funds.

    While the budget is still undergoing its last stage as a document before the President signs it into law, the fact that this administration is pumping such a huge amount of money into the system to stimulate the economy is cheering news to us.

    The plan to stimulate the economy with N350billion earmarked for capital projects should be celebrated for many reasons.

    Since the Federal Government is desirous of making the huge capital spending to trickle down to ordinary Nigerians, I believe areas to benefit from this development include agriculture, transportation, construction industry and power, among others.

    As the raining season beckons, the fact is there is no better time to plan for this year’s planting season than now. I expect the Federal Government to give a special attention to efforts that would make fertilizer available to Nigerian farmers. This is because President Buhari has consistently told Nigerians that agriculture would be given a pride of place under his administration. So, when the Minister of Finance announced the resolve of the administration to pump N350billion into the economy, I heaved a sigh of relief that agriculture will benefit tremendously from this capital funding.

    Another area, which I believe will benefit from the capital stimulus, is transportation. It is obvious that payment to contractors is a precursor to the making of good roads in the country.

    There is no doubt that the timing is critical for contractors to return to sites given the fact that it takes time for the real construction work to begin.

    Good roads, will provided farmers the opportunity to take their produce to designated markets with ease and this will go a long way in preserving the quality of the farm produce.

    Nigerian farmers, especially in remote parts of the country have had their farm produce like tomatoes and pepper perish given the difficulty of conveying them to markets.

    With the current state of power generation and distribution, one doesn’t need to be told before realizing that power is another sector that will benefit tremendously from the N350bn capital spending in the first quarter of the year.

    So it is not out of place to see contractors in the power sector rolling their equipment back to sites any time from now.

    Some of us are happy with the bold step being taken by this administration to focus on contractors considering the fact that some of them had last year appealed to federal and state governments to pay debts owed the firms to enable them to return to project sites across the country.

    Acting under the auspices of Federation of Construction Industry, the contractors had put the debt owed them by various governments in the past two years at N600 billion.

    The president of the group, Solomon Ogunbusola, had explained that delay in payment of the debt had grounded operations of most of the companies.

    According to him, many of the companies have closed shops while thousands of workers have been retrenched.

    Mr. Ogunbusola said that no fewer than 8, 000 workers in the industry were laid off in a period of six months.

    According to a media report last year, contractors handling over 184 federal road projects have abandoned the various sites due to lack of funding from the Federal Government and the huge debt owed them by the Federal Ministry of Works. The report said that following the decisions of the contractors to abandon the sites, N1.76trn federal road projects across the country had suffered setback.

    As far as I’m concerned, the spread of the abandoned projects underscores the need for the Federal Government to offset its liabilities in order to encourage the firms to return to sites.

    In the report, the Federal Government classified 184 projects as ongoing as at September 2014.

    The North-Central zone had 29 projects, with a total length of 1,20.81km and a cost of N294bn; North-East had 26 projects, 1,219.65km long and cost N314bn; North-West had 20 projects, 1,040.22km long and cost n188BN; WHILE the South-West was put at 31, stretching 1,072.63km.

    We all know that if the contractors borrowed money from banks to ensure progress of work on the projects, the consequences of non-payment by the government become hydra-headed, especially as the contractors would be unable to repay the borrowings from banks.

    This is why I think the current administration deserves support for taking the bull by the horn by the resolve to release money to contractors.

    We should also not lose sight of the provision given to these contractors. Newspaper reports quoted the minister as saying that the federal Government will extract commitment from these contractors in order to ensure that the disbursement to them will be used largely to facilitate recruitment of staff and not to be used for the payment of management fees.

    Equally commendable is the declaration of the Minister of Finance that adequate mechanism has been put in place to ensure discipline in fiscal policies. This, to my mind, will give credibility to government’s programme since we are made to understand that the era of “money for the boys`’ is gone.

    I strongly believe that by the time this money hits the accounts of contractors, a process which is expected to motivate them to move their equipment back to sites, Nigerian economy will be better for it. This is because apart from big contractors who are owed directly by the Federal Government, the small-scale contractors needed for menial jobs are bound to begin to enjoy patronage.

    Apart from the direct gains from the resumption of construction works, which include the prospect of better roads and the attendant accessibility to farms and other economic sites, the anticipated capital injection will definitely boost economic activities in all the nooks and crannies of the country.

    Besides, the debt burden, which the current administration seeks to lighten with the planned payment of contractors is a very substantial debt burden that mirrors the poor priority government over the years have attached to road infrastructure development or maintenance. This level of indebtedness, of course, can lead to abandonment of the projects, cost inflation, poor execution of the projects, disengagement of workers thereby exacerbating the unemployment situation and even litigations.

     When that happens, the amount of interest charges may not only over-run the entire contract amount but may necessitate the lending banks making substantial provisions for non-performing loans or outright bad debts. The capacity of the banks to extend credit facilities to other needy economic agents will therefore be curtailed. Most assuredly, the stability of the banking system may become impaired with grave adverse consequences such as bank distress and/or failure, disengagement of employees, loss of investments by investors and hard-earned deposits by customers.

    This is one of the reasons why I’m joining other well-meaning Nigerians to salute the efforts of the current administration to empower contractors to go back to sites.

    • Odoko is an Abuja-based policy analyst
  • Buhari: I will scrutinise budget before signing

    Buhari: I will scrutinise budget before signing

    President Muhammadu Buhari plans to scrutinise the 2016 Appropriation Bill before signing it, it was learnt yesterday.

    The National Assembly passed the bill last week and sent it to the Presidency without its details.

    When the President insisted that he will not sign the bill into law until he receives the details, some National Assembly members said it would not be out of place to sign.

    They cited instances under former Presidents Olusegun Obasanjo and the late Umaru Musa Yar’Adua when budget were signed while the details were being worked on.

    But Buhari yesterday in Washington DC maintained that he will go over the bill with a fine-tooth comb before signing it.

    He spoke during a meeting with the United States Secretary of State, Mr. John Kerry.

    According to him, in view of the controversial “alteration” and “padding” of the budget proposals, he needs to review the Appropriation Bill to be certain that its contents tally with the proposal presented to the National Assembly.

    “Some bureaucrats removed what we put in the proposal and replaced it with what they wanted. I have to look at the bill that has been passed by the National Assembly, ministry by ministry, to be sure that what has been brought back for me to sign is in line with our original submission,” the President said.

    The lawmakers gave some of their grouses against the budget as:

    • Many omissions;
    • Multiple budget details;
    • Budgetary allocations not in tandem with policy thrust; and
    • Inadequate provision for personnel across board.

    The popular thinking in social and political circles is that the trial of Senate President Bukola Saraki at the Code of Conduct Tribunal has delayed the release of the budget details to the Presidency.

    It was learnt that most Senators and House of Representatives members, who are sympathetic to Saraki, wanted a “political solution” to the case in which Dr. Saraki is alleged to have falsified his assets declaration.

    The senators have been trying to prevail on the Presidency to bend the rules for Saraki in line with the understanding struck by the Executive and the National Assembly on the smooth passage of the Appropriation Bill.

    But the Presidency has stuck to its position that it is not behind Saraki’s travails.

    Besides, some senators and members of the House of Representatives are said to be angry that the Presidency did not invoke the legislative culture of lobbying in resolving issues on the budget.

    A source, who spoke in confidence, said: “Some Senators and House members are seeking a soft-landing for Saraki in line with the ‘gentleman agreement’ between the Executive and the Legislature on the smooth passage of the budget.

    “Some members are angry that the Executive is not conceding enough to the Legislature on the need for a political solution to Saraki’s trial.

    “This is a strong factor for the delay in releasing the details. They are seeking a compromise and this development has the backing of some leaders of the National Assembly.

    “I think we might be in for a dirty politics between the Executive and the Legislature as long as Saraki’s trial lingers.”

    Another source said: “Some members of the National Assembly are unhappy that there was no substantial lobbying by the Executive on the passage of the Appropriation Bill.

    “During a budget session with some ministers, one of the influential members of the Appropriation Committee openly accused a cabinet member by saying: ‘Why did you issue a circular that nobody should lobby us?’ He was visibly angry on that day.

    “They said they were not talking of monetary lobbying but constant rapport between the two arms. They alleged that ideally, if there was effective lobbying, it should not take the Executive about five months to get the budget ready and the National Assembly another five months to pass it into law.”

    A government official however said: “I think there is more to it than the budget details, it appears other extraneous issues have crept into the matter. The Presidency is also studying the situation.

    “From the session between the Appropriation Committee and relevant ministers, there was nothing more to harmonize.

    “Nigerians should ask the lawmakers how they arrived at the highlights when they don’t have the details. Did they work from the answers to the questions?

    “By laying the Appropriation Bill and passing it into law suggested that everything has been concluded. The row over budget details is baffling to the government.

    Responding to a question, the government source added: “The Presidency has told National Assembly members that it was not behind Saraki’s travails. Its position is that the law should take its course.

    “There was no gentleman agreement or preconditions for the passage of the budget.”

    Declaring that his administration will continue to vigorously prosecute its war against corruption, President Buhari sought and received an assurance from Mr. Kerry that the United States Government will facilitate the repatriation of all stolen Nigerian funds found within the American banking system.

    “It will greatly help our country if you assist us to recover all our stolen funds, which we can establish to be within your financial system,” the President told Mr. Kerry.

    Acknowledging that the United States has been of great help to his administration in the retraining and re-equipping of the Nigerian Armed Forces that has resulted in the significant success already achieved against Boko Haram, President Buhari said the Federal Government is now working very hard to restore full normalcy in the Northeastern states.

    “Boko Haram no longer holds any local government area. We are reconstructing damaged facilities and preparing the police to take over and reassert civilian control over areas affected by the insurgency,” the President said.

    Responding, the Secretary of State said he has been told that the stolen Nigerian funds were in “billions of dollars”.

    “It’s not easy to hide that amount of money and we are pretty good in tracing them,” Mr Kerry assured President Buhari.

    He said United States Government officials will meet with the Chairman of the Economic and Financial Crimes Commission (EFCC) to discuss further cooperation in that regard. EFCC Chairman Ibrahim Magu and Attorney-General of the Federation Abubakar Malami are in the United States.

    Mr. Kerry  applauded the Buhari Administration’s success in rolling back the Boko Haram insurgency, saying that the United States will continue to suport Nigeria to ensure that the terrorist sect is eliminated as a threat to national and regional security.

    The Secretary of State  also praised President Buhari’s clear order that the Armed Forces must show greater regard for the  human rights of persons in the theatre of operations against Boko Haram.

  • No rift over 2016 budget , says Fed Govt

    No rift over 2016 budget , says Fed Govt

    Minister of Information and Culture Alhaji Lai Mohammed, said yesterday that there is no rift between the executive and legislative arms of government over the passage of the 2016 budget.

    Mohammed spoke yesterday during his visit to the Leadership Newspapers in Abuja.

    He said: “On the passage of the budget, I want to clear the misconception. There is absolutely no rift between the executive arm of government and legislative arm of government.

    “It is not true that the President has refused to assent to the budget. The fact remains that it (budget) is not even before him.

    “The practice really is that when the budget is approved like that, there is what we call headline figure that is approved, then it will take a few days for the National Assembly to throw up the details.’’

    The minister said it was the original copy of budget that would be taken to the President after the correction.

    He said the signing of the budget by President Muhammadu Buhari would reflate the economy and uplift millions of Nigerians from abject poverty.

    He said the budget will focus on infrastructure development, which will in turn create jobs for unemployed Nigerians and wealth for workers in the construction industry.

    “It is a budget of social inclusion. It is a budget that everybody is included,’’ Mohammed said.

    There is N500 billion provision for social intervention programmes targeted at employing 500,000 graduates, who are to be trained as teachers and deployed in primary schools.

    Besides, there were programmes aimed at empowering 370,000 non-graduates such as artisans and technicians.

    Mohammed said: “It targets at training one million people such as farmers, market women, traders and entrepreneurs, as well as giving them loan to start off.

    “It aims at giving one meal to 4.5 million pupils from class 1 to 3 per day. It is also aimed at giving N5,000 to vulnerable Nigerians such as widows, aged people and disabled people in the rural areas.’’

    The minister said the social intervention programmes are targeted also  at providing bursary and scholarship for students studying science, technology and engineering.

  • Budget 2016 ‘ll stimulate economy, say LCCI, MAN

    Budget 2016 ‘ll stimulate economy, say LCCI, MAN

    The Organised Private Sector (OPS) is excited about the N6.06 trillion budget for this fiscal year.

    The Lagos Chambers of Commerce and Industry (LCCI) and the Manufacturers Association of Nigeria (MAN) said the budget would stimulate the economy.

    LCCI Director-General Muda Yusuf said the budget’s size  and its reflationary character would have a stimulating effect on the economy.

    He said it is what the economy needs at this time, considering the economic slowdown of 2.1 per cent in Gross Domestic Product (GDP) growth from about four per cent a year ago, rise in unemployment and slow down in industrial activities.

    The LCCI chief praised the budget for giving priority to infrastructure as well as security, noting that it is a step in the right direction given the huge infrastructure deficit in the country and having regard to the security challenges in some parts of the country, particularly the northeast.

    Yusuf, however, said the budget’s debt service provision of N1.5 trillion is a cause for serious concern. According to him, it shows that Nigeria is operating a debt profile that is not sustainable.

    “This amount is about 35 per cent of revenue, which has already exceeded the global threshold for debt sustainability,” he pointed out.

    The LCCI chief added that although debt service is an obligation over which the nation has very little choice, the lesson is that Nigeria needs to review her debt management strategy to reduce the burden of debt services her finances.  “The opportunity cost of current debit service provision for the economy is very high,” he said.

    Yusuf however, identified the drop in oil revenue as a contributory factor to the high deficit in the budget. He said the immediate implication is that the level of borrowing domestically and externally has increased, and this also has implications for debt service burden.

    He maintained that due to increased borrowing, the impact of the reduction in oil revenue has been mitigated.

    While commending the expected increase in efficiency and reduction in leakages in the management of government finances, the LCCI boss observed that the introduction of the Treasury Single Account (TSA) has also boosted government revenues. He expressed hope that the conglomeration of the targeted policies of government will make up for the shortfall in oil revenue.

    His words: “There is need for an appropriate economic policy framework that could inspire investors’ confidence. Private capital is crucial to the progress and diversification of the economy.  Only the right mix of policies would make this happen.

    “There is a need to urgently address the policy shortcomings in the foreign exchange management; undertake urgent reforms in the petroleum downstream sector; review existing trade policies and promote investment friendly tax policy.”

    Also, the President, Manufacturers Association of Nigeria (MAN), Dr. Frank Udemba Jacobs, said the budget would make appreciable impact on the economy if thoroughly implemented. He also commended the huge allocation made to infrastructure. According to him, poor infrastructure remained the bane of the economic development of the country, as the private sector has remained uncompetitive.

    On the allocation to the Ministry of Industry, Trade and Investment, the MAN president said the figure is adequate, adding that what they do is trade promotions, exhibitions and nothing more.

    Dr. Jacobs however, said the removal or reduction of N17 billion by the National Assembly did not make any appreciable difference. The approved N6.06 trillion budget for 2016 was an increase over last year’s N5trillion budget. Under the current dispensation, government budgeted a total of N1.36 trillion to debt servicing while allocating over N16, 296,622,303 billion to the Ministry of Industry, Trade and Investment.

  • Buhari awaits budget details

    Buhari awaits budget details

    President Muhammadu Buhari is not in a hurry to sign the N6.06trn 2016 Appropriation Bill passed by the National Assembly last Wednesday, it was learnt yesterday.

    Although the leadership of the National Assembly handed over the Bill to The Presidency for assent before it went on recess, our correspondent gathered that the Bill did not contain details and sectoral breakdown.

    A Presidency source who confirmed the receipt of the Bill from the lawmakers last Thursday, explained that though the President is anxious to sign the Bill, he would only do so after the National Assembly avails him of the details which were not contained in what was handed over.

    Asked if that could be done within the period that the National Assembly would be on recess, the source said it was a possibility as the relevant officers in the National. Assembly may be directed to send the details to the President.

    “I can confirm to you that we have received the Bill since Wednesday but there were no sectoral details on what was appropriated.

    “There is no way the President can sign the bill into law without a thorough knowledge of the details. He has asked for the details from the leadership of the National Assembly. As soon as he gets this, I’m sure members of his economic team will look at it and advise on whether to assent the bill or not.

    “I know Nigerians are anxious to see the budget matter resolved as soon as possible. We are also anxious but we have to be pragmatic about it. Without the details, how do you expect the President to have a firm grasp of what he was signing? I know the National Assembly is on recess but it should be a problem as all that is required is an instruction to the relevant officers to dispatch the details of the bill to the Presidency.

  • MPC’s interest rate hike vs N6.06tr budget

    MPC’s interest rate hike vs N6.06tr budget

    Central Bank of Nigeria (CBN)-led Monetary Policy Committee’s (MPC’s) decision to raise interest rate from 11  to 12 per cent could limit the impact of the N6.06 trillion 2016 budget on the economy. The hike would raise the cost of private sector borrowing from banks at a time the N6.06 trillion 2016 budget is expected to trigger robust business activities in the economy, writes COLLINS NWEZE

    Last week’s passage of the 2016 budget was swift, but sudden. The previous haggles between the executive and the National Assembly over inconsistencies in the budget figures fizzled out and the budget was passed seamlessly. It happened the same week the Central Bank of Nigeria (CBN)-led Monetary Policy Committee (MPC) raised benchmark interest rate from 11 to 12 per cent.

    The committee said it appraised the international and domestic economic and financial environments in the first two months of 2016 as well as the outlook for the rest of the year before arriving at that decision.

    An economist, Henry Boyo, said the passage of the budget and hike in interest rate almost simultaneously could educe the benefits meant to be derived from the budget passage.

    He said the MPC is expected to be managing the liquidity in the system, including ensuring that inflation is put under check.

    Boyo says he does not expect much difference in the implementation of the budget from the previous ones and wondered if the allegation of ‘budget padding’ has been resolved. “I knew that the Ministries, Departments and Agencies (MDAs) were sent to reconcile the budget but not much information was released afterwards,” he said.

    Former Executive Director, Keystone Bank Limited, Richard Obire said raising the interest rate means the price of money will be higher. He urged government to spend locally, to ensure that major sectors of the economy benefit from the budget implementation.

    He applauded the government’s priorities of diversifying the economy away from oil, developing agriculture, exploiting the solid minerals and creating millions of jobs for the youths. But he added that achieving these priorities would need ready-capital and substantial local and foreign investments.

    He said the government is expected to generate enough liquidity to fund it and also see that a large part of it is used in bridging the infrastructure gap in the country.  Most roads, railways and power facilities are either in disrepair, half-built or with a capacity that is far below the needs.

    Obire insisted the Finance Ministry function has to do with being able to raise revenues to match the spending needs of government. For him, the finance ministry job, focuses on being able to understand what the government wants to do and translating it to financial numbers.

    The former bank chief said the Federal Government is working on achieving a reflationary budget, one that puts more money into infrastructure development. But he believes it will be challenging for government because it will want to spend in the context of revenue that has dropped because of low oil prices.

    He said government can drive revenue streams through effective tax regime, and increased earnings from the Customs Service. He said government has to be prudent in its spending, ensuring that  every naira  spent, comes with maximum value.

    Obire called for a high level of co-ordination between the Finance Ministry and the CBN. “There should be good handshake between both parties. This will enable them to tackle inflation and improve the value of the naira,” he said.

    Muda Yusuf, an economist and private sector advocate said given the size of the budget and the reflationary character, I believe it will have a stimulating effect on the economy. “This is what the economy needs at this time, against the backdrop of the economic slowdown.  Gross Domestic Product growth rate has dropped to 2.1 per cent, from about four per cent a year ago,” he said.

    He said the budget also gives priority to infrastructure as well as security. “This is a step in the right direction given the high infrastructure deficit that we have in the economy and having regard to the security issues we are grappling with in parts of the country. This emphasis is therefore commendable,” he said.

    He, however, said the debt service provision of N1.5 trillion is however of serious concern. “It shows that we are operating a debt profile that is not sustainable. This amount is about 35 per cent of revenue, which has already exceeded the global threshold for debt sustainability,” he said.The economist also called for an appropriate economic policy framework that could inspire investors’ confidence.  Private capital is crucial to the progress and diversification of the economy.  “Only the right mix of policies would make this happen.  There is a need to urgently address the current policy shortcomings in the foreign exchange management; undertake urgent reforms in the petroleum downstream sector; review existing trade policies and promote investment friendly tax policy,” he said.

    Managing Director, Financial Derivatives Company (FDC) Limited, Bismarck Rewane said the passage of N6.06 trillion 2016 budget by the National Assembly is expected to raise the volume of dollar demand in the economy.

    His note in the FDC Bi-Monthly Economic Report for March released yesterday indicated that the increase in the Monetary Policy Rate (MPR) will reduce liquidity in the system and demand for dollars in the short term.

  • N500b cash for the poor stays in N6.06tr budget

    N500b cash for the poor stays in N6.06tr budget

    Lawmakers have retained the N500 billion intervention fund for the poor in this year’s N6,077,680,000,000 budget.

    The Muhammadu Buhari administration plans to dole out N5,000 to the poorest in the land and feed school pupils, among its populist programmes.

    But the National Assembly yesterday passed the 2016 controversial budget with a reduction of over N17 billion.

    President Buhari on December 22, last year presented to the joint session of the National Assembly an Appropriation Bill of N6,077,680,000,000 for consideration and passage into law.

    The lawmakers passed N6,060,677,358,227 as the 2016 budget, slicing off  N0,017,002,641,773.

    Passing the budget, the House of Representatives gave a proviso that Section 318 of the constitution must be strictly adhered to.

    Section 318 stipulates that the Appropriation Bill will run for  12 months, starting from the date it is assented to.

    While considering the bill for second reading at a plenary chaired by Speaker Yakubu Dogara, the lawmakers said the Excess Crude Account is unconstitutional and should no longer be operational.

    The budget oil benchmark is $38. Oil has hit $41, the highest in months.

    However, the mood of the lawmakers was difficult to guage when the item for N100b Constituency project came up for approval.

    The lawmakers also questioned, through loud murmurs, when an item N3.43b Bulk Trader, in addition to N10b Sinking Fund came up for adoption.

    Senate Committee on Appropriation Chairman Mohammed Danjuma Goje, who presented the report of his committee, noted that in view of the revenue and general economic challenges confronting the country, “the committee has, in a landmark decision not witnessed since the advent of the present democratic dispensation in 1999, reduced the size of the aggregate expenditure and consequently reduced the total recurrent, deficit and borrowing plan.”

    Part of the highlights of the budget as passed include  Aggregate Expenditure N6,060,677,358,227; Statutory  Transfers  N351,370,000.000 (retained); Debt Service N1,475,320,000,000 (retained); Recurrent Expenditure reduced from N2,648,600,000,000 to N2,646,389,236,196; Capital Expenditure also reduced from N1,845,540,000,000 to N1,587,598,122,031; Fiscal Deficit N2,204,936,925,711.16 and Deficit/GDP 2.14%.

    The same benchmark of $38pb was proposed by the Executive.

    The Executive proposals of crude oil production of 2.2 million barrels per day and an exchange rate of N197 to $1 were also adopted

    The committee observed that the late presentation of the budget affected its timely passage.

    The committee also said that the 2016 Appropriation Bill, after its presentation to the National Assembly, was seen to be “fraught with some inconsistencies from ministries, departments and agencies, given the subsequent reference by them to different versions of the budget”.

    Goje, who said that the inconsistencies in the fiscal document were also noticed at the level of the sub-committees, described them as “strange and goes against proper budgetary procedures and processes with attendant implications”.

    The committee chairman told the Senate that they observed that the available revenue for appropriation was grossly inadequate to meet the huge demand of MDAs to prosecute needed programmes for national development across all spheres of the economy.

    Goje said: “The 2016 (Appropriation) Bill seeks to stimulate the economy by the recurrent expenditure as compared to the capital component at a ratio of 30:70% is still very high. This takes away from the infrastructure-stimulus funding that the country so desperately needs for development.”

    He noted that the Appropriation Bill contained some omissions, particularly in personnel cost.

    Goje added that “though the Appropriation Committee has filled some of the gaps, there are many outstanding cases which could raise serious concern in the course of the year”.

    The committee recommended, among others, that subsequent budgets should be submitted in strict compliance with the provisions of the Fiscal Responsibility Act to enable the National Assembly conduct proper engagement and to conclude the budget in good time.

    The committee also said that there should be proper engagement in future between the Budget Office and MDAs on the budget contents to avoid  what appeared to be a disconnect between them in the processing of the budget proposals.

    Goje specifically referred to a situation where some MDAs disowned their budget before the Appropriation Committee.

    Some statutory transfer allocations include National Judicial Council N70b; Niger Delta Development Commission N41,050b, Universal Basic Education N77,110b; National Assembly N115b; Public Complaints Commission N2b, Independent National Electoral Commission N45b and National Human Rights Commission N1210b.

    Debt Service: Domestic debts N1,307,400,000,000 while N54,480,000,000 was allocated for Foreign Debts Service.

    Presidential Amnesty Programme stipends and allowances of 30,000 Niger Delta ex-militants was allocated N7,875,000,000, Presidential Amnesty Programme operational cost N1,834,149,261 and N10,290,850739 was voted for Presidential Amnesty Programme reintegration of transformed ex-militants.

    Other allocations: Ministry of Agriculture N46,175,963,859; Ministry of Defence N130,864,439,542; Ministry of Education N35,433,487,466; Ministry of Health N28,650,342,987, Ministry of Information and Culture N6,071,503,956; Ministry of Interior N61,713,279496; Ministry of Justice N879,736,744; Ministry of Solid Mineral Development N7,332,623,257; Ministry of Niger Delta N19,440,328,551; Ministry of Transportation N188,674,679,674; Ministry of  Works, Power and Housing N422,964,928,495.

    Senate President Bukola Saraki  remarked that there was no bickering over benchmark.

    He noted that the budget “reflects efficient and equitable allocation of resources to reduce the challenges that we are all aware of”.

    “The budget is now a product of bipartisan engagement, commitment and one that is broadly nationalistic”.

    “It gives me great joy to commend and appreciate all the efforts  that you  have all put in . It is the duty of the executive to ensure full implementation of this budget as part of the campaign to bring succuor to our people.

    “While implementing, we charge the executive also to consider the areas of supporting locally produced products in order to help our economy.

    “We have all seen the earlier hiccups in the beginning of the budget and we hope that by the time we are about to get the 2017 budget, the agencies and the budget office would improve their level of interaction and government itself would bring the  budget much earlier to give ample opportunity. It is very important that we do this.”

    “Nigerians have been waiting for us to pass the budget. I think at this time too, the implementing agencies should ensure that they get to work quickly in implementing the budget.”

     Deputy Senate President Ike Ekweremadu said: “I am a bit worried about the observation made by Goje as contained on page five of the  report, which says the 2016 Appropriation Bill contained a number of omissions particularly in the area of personnel cost.

    “Though the Appropriation Committee has filled some of the gaps, there are many outstanding cases which could raise serious concern in the course of the year.

    “The executive presented what we considered as proposal and so the ultimate responsibility for this budget rests on us the members of the National Assembly.

    “If there are mistakes on the part of the executive, it ends at the point they presented the budget. If anything happens after that and we pass the budget, we cannot blame them any longer.

    “I therefore want to know what these outstanding cases are because it appears that it is in relation to personnel cost.”

    Goje said: “This budget exercise was full of negotiations, going forth and back. When the budget was presented as attested by many committees, there were shortages discovered, including personnel cost in various committees, and the total amount involved  was presented to the executive and in the course of our interaction with the budget office we presented the shortfalls for personnel and other overhead costs, which we believe was being taken care of.

    “Somehow they did it halfway, so since they did it halfway, we also did it halfway but for critical organisations, most of them were satisfied.”

    “We still have pockets, few that we believe will have some problems and the Budget Office confirmed to us that they may come with something to make it up.

    “Because this budget is full of controversy, we didn’t want to add more controversy. If we add more controversy, the report wouldn’t have been submitted now and the National Assembly will be blamed for delaying this budget.

    “That is why we did everything possible to ensure that we beat the deadline instead of continuing back and forth and Nigerians will not understand; they will say the National Assembly is playing politics with this budget, meanwhile we are doing everything possible to ensure that the budget is as implementable as possible.”

    Defending the budget work at a news conference, the joint Appropriation Committee said almost all parts of the bill presented to the National Assembly were tinkered with, except President Muhammadu Buhari’s N500b intervention programmes.

    Goje said: “We did not tinker with it; nobody asked any questions; we just approved it because we believe, the interventions can touch the lives of Nigerians.”

    Goje also disclosed that when calculated,  what was passed yesterday was N1.05 trillion as the capial component of the expenditures of some agencies in the Presidency were not available to the Committee.

    “When the capital component of the expenditure of all those Commissions are added, then it will amount to N1.060 trillion,” he added.

    Abdulmumin Jibrin, Chairman, House Committee on Appropriation said it was the first time since 1999 that the country has witnessed a reduction in aggregate expenditure.

    He said though the budget estimate is huge, contrary to widely held belief that the National Assembly would add to it, the reverse was the case as N17b was reduced from the initial estimate.

    “We all know the challenges that accompanied this bill and often times, with overheads being most contentious.

    “We engaged the Executive and the Budget Office  on it because we also discovered that several critical items that were not in the budget. We had to allocate funds to those areas.

    “We also have to tilt some allocations in favour of security, anti corruption drive in order to strike a balance with the policy thrust of the government”.

    The Committee however enjoined Nigerians to focus less on the padding controversy. “Don’t concentrate on how the padding issue was resolved but on light at the end of the tunnel.

    “This is  because we cleaned it up and we believe that most of these problems won’t occur again in future. For the fact that this is a transitional government from one political party to the other, this should not be too strange. We are sure this will not occur again,”Jibrin said.

  • At last, Buhari’s ‘Budget of Change’ through

    At last, Buhari’s ‘Budget of Change’ through

    Henceforth, no withdrawals can be made from the Excess Crude Account (ECA) without an Act of the National Assembly.

    This is contained in the 2016 amended budgetary proposals passed yesterday by the National Assembly.

    The proposal, which marks a clear departure from the past, has now made it compulsory for the Accountant-General of the Federation (AGF) to maintain a separate record for the documentation of revenue accruing to the Consolidated Revenue Fund (CRF) in excess of oil price benchmark adopted in the 2016 Budget.

    According to the amended budgetary proposals waiting for President Muhammadu Buhari’s signature, revenue accruing from sales of crude oil in excess of $38 per barrel, the Petroleum Profit Tax and Royalty on oil and gas will be captured in the new record to be kept by the AGF.

    In the past, withdrawals from the Excess Crude Account (ECA) were subject to the approval of the president. But, with the new law, any  withdrawal from the ECA must be secured with an Act of Parliament.

    Besides, the AGF will henceforth forward to the National Assembly details of funds released to government agencies immediately such funds are released.

    The 2016 Amended Appropriation Bill passed by the National Assembly has also mandated Finance minister to “ensure that that funds  appropriated under this Act are released to the appropriate agencies and or organs of government as and when due, provided that no funds for any quarter of the fiscal year shall be deferred without prior waiver from the National Assembly.”

    Yesterday’s passage of the N6.06 trillion marked the take off of the zero-based budgeting system espoused by the new administration.

    The amended proposal, waiting to become law, mandates “all accounting officers of Ministries, Parastatals and Departments of government who control heads of expenditures shall upon the coming into effect of this Act furnish the National Assembly on quarterly basis with detailed information on the Internally Generated Revenue (IGR) of the agency in any form whatsoever.”

    Another introduction to the budgetary process is that “the bill will run for a course of 12 months, starting from the date it is assented into law.”

    In the past, the country operated a budgetary process that technically begins its course from January to December, but where there is a delay in the passage of the subsequent year’s budget, the National Assembly grants the executive a grace of three to four months to spend money in lieu of a proper Budget Act.

    Going by the amended proposal, former presidents/Heads of State and vice presidents/Chiefs of General Staff have N2.3 billion earmarked for their entitlements.

    All retired Heads of Civil Service of the Federation (HoSF) and Federal Permanent Secretaries will share some N2, 599,702,192.  A princely N59, 803,309,186 has been budgeted for Military pensions and gratuity. Those who will retire from the federal civil service this year will be paid N3, 523,892,396 as retirement benefits.

    Under the Service-Wide Votes, N14, 690,036,516 has been set aside for Group Life Insurance for all Ministries, Departments and Agencies (MDAs) including the Department of State Services (DSS), Insurance of Sensitive Assets and Youth corps members.

    For Capital Supplementation, especially the National Job Creation Scheme/Graduate Internship Scheme, the National Assembly approved that N2 billion; sinking fund for infrastructural development (N10 billion); transition to Sustainable Development Goals (SDGs) (N609,037,225); SDG programmes (N3, 378,044,922); SDG monitoring and evaluation (N581,777,918); consultancy, fees, survey and short term and long term studies for SDGs (N474,533,376) and SDG)communication and advocacy (N427,080,038).

    The Ministry of Finance pet project – the Efficiency Unit has N500 million to do its job and capital exigencies/adjustments to capital cost will spend N5.5 billion. The Senate approved N4 billion for the Capital Development of National Institute for Legislative Studies.

    The National Assembly Clinic got N1 billion; Special Intervention/Constituency projects (N100 billion) and federal initiative for North-east (pilot Counterpart Funding Contribution) (N12 billion).

    While expenditure on public service reforms, including payment of severance benefits to federal civil servants is to take N1. 5 billion, N10, 255, 000, 000 has been approved for the payment of the Nigerian Police’ improved remunerations package, including covering shortfalls recorded under the item in 2014 and 2015.

    Also, the Public Service Wage Adjustment, including arrears for promotion and salary increases for personnel of ministries, departments and agencies (MDAs) is to cost N33, 397, 400, 000 while outstanding payment to health professionals is to be settled with N3 billion.

    Apart from allocations under the defence votes, the armed forces’ internal security operations is to receive N13 billion and additional N8 billion has been allocated to Operation Lafiya Dole, the on-going military operations in the Northeast.

    Also included under the service-wide votes are: Nigeria’s contributions to West African Examinations Council (WAEC) and other international organisations (N6 billion); country contributions to Pan-African Writers’ Association (N208 million); assorted contributions to African Union (AU) and others (N3. 5 billion) and a sub-head titled “External Financial Obligations” (N8. 5 billion).

    Some N12 billion has been allocated for “Contigency”; N500 million for “Pilgrims Support Services”, N2. 5 billion for “Provision of Security Equipment for Selected Public Buildings” and service-wide training of Budget/Planning Officers on GIFMIS Budget Preparation System and project monitoring (N1 billion).

    Under the service-wide votes, stipends and allowances for 30, 000 Niger Delta ex-militants  is to get N7, 875, 000; Presidential Amnesty Programme Operational Cost (N1, 834, 149, 261) and the Presidential Amnesty Programme’s Re-integration of Transformed ex-Militants (N10, 290, 739).

    Indigenous contractors are to heave a sigh of relief soon as N25. 5 billion has been allocated for the settlement of Federal Government debts and liabilities to them and N5, 005, 000, 000 has been allocated for the payment of refund to states as reimbursements for the federal road projects they undertook and the financing/or seed money for Nigeria’s Nuclear Energy Programme will get N2 billion.

  • Oyo Assembly passes N173b budget

    Oyo Assembly passes N173b budget

    The Oyo State House of Assembly yesterday approved N173, 769,404,444 billion as the amount to be spent by the government during the fiscal year.

    N100,651,599,183 billion is for Recurrent Expenditure and N73,117,805,261 billion for Capital Expenditure.

    The lawmakers passed the budget, having considered the outcome of deliberations by its Public Finance and Appropriation Committee headed by Bolanle Agbaje.

    Ms. Agbaje observed that the budget performance of the preceding year was rather low due to the paucity of funds, but noted that the government has adopted the modified zero based budgeting for a more realistic approach.

    She added that there was critical consideration of items of expenditure to ensure that priority is given to the basic need of socio-economical development of the state.

    Speaker Michael Adeyomo directed the clerk to communicate the outcome to Governor Abiola Ajimobi for his assent.