Hon. Abdulmumin Jibrin is the Chairman, House of Representatives Committee on Appropriation. In this interview with a select group of reporters, including Victor Oluwasegun, he speaks on various aspects of the 2016 proposed budget.
You appear quiet on this budget, why?
I don’t completely agree with you that we have been quiet about the budget. We’ve been very active. We have done a lot of work and want to speak through our actions. We’ve done the first reading, debated for three consecutive days and it has passed the second reading. It has been committed to the Committee on Appropriation and in line with the tradition of the House, gotten all the chairmen of the 96 committees and discussed the timetable.
Also, in line with the rules of the House, the 96 committees will present reports and recommendations on their various budgetary allocations; which means that they will also do their budget defence before us; that will take us another one week. Then we shall commence critical activities in the whole of this process, which is harmonizing with the Senate.
The benchmark and exchange rate that was used is no longer feasible, don’t you think this two aspects should be reviewed?
I agree with you completely and it is also our general thinking in the House that the benchmark for oil at $38 per barrel, has gone below that figure. I’m sure that during this budget period, we will engage with the Committee of Finance and relevant committees and should be able to fix the benchmark at a very safe figure that should be more realistic. It is one of our concerns. The aspect of the non-oil projections look very realistic, but going by history, we must be extremely disciplined to ensure that the projections are met. On the aspect of the exchange rate, it is an exclusivity of the CBN which gives justification for the fixing of exchange rate. We do not interfere, but we will engage the apex bank so that we can discuss the feasibility of any adjustment. There is also the aspect of the budget deficit financing, we are concerned about that, so we are going to engage the executive, particularly the Minister of Finance and the Minister of Budget and Planning to make sure how the deficit is going to be financed. Generally, the position of the National Assembly is to reduce domestic borrowing significantly, so we expect that a chunk of the borrowing should come from external sources. Already, the economy is struggling and you will put more weight in terms of drawing more money from the local economy. What is important to us is that we are able to pass a budget that the executive will implement.
Do you think the issue of financing the budget from the non-oil sector is feasible?
If you look at the budget details, the most ambitious projection is coming from the non oil sector. If you look at the sectoral allocation in terms of capital allocations in the budget, what the committees are going to do is to prioritize the capital expenditure which is geared towards diversifying the economy so we can get more funds from non-oil sector. Also, very important is that the government has introduced the TSA, which is working now but has been a bit of a challenge in the past. But I think the MDAs are gradually keying in. I think the TSA has put a lot of discipline. Even as chairman of Finance Committee, it has always been my position that we have enough potential from our MDAs to locally be able to raise sufficient funds to finance our budget and match up with expenditure equal to the amount they raise year after year. We are seeing that it is gradually reducing, but we need to take it a step further. Some of these MDAs that do not bring their budgets for appropriation to NASS must start submitting them so that the Budget Office, Federal Executive Council will have an idea of the expenditure of these agencies and be able to compare it side by side with the revenue.
What is the House doing to ensure that loopholes through which money are siphoned by MDAs are blocked?
The House has been in the vanguard to block loopholes. We try to make sure that the revenues lost through such loopholes are reduced and this budget is not going to be an exception. The committees have been told to be on the watch-out and they are looking at areas where monies are being wasted and ensure such are taken away from the budget.
The NASS has the yam and the knife, now the present budget came to N6.08 trillion, yet the MDAs are complaining that the size of the money allocated to them is small, do you have the intention of increasing their budgets?
Traditionally, money has never been enough for any agency, so it is not new for them to always ask for more. So, we have decided that in order to reduce the areas of friction, we advised the committees to stick to their envelopes so no committee will expand its budget and they will operate within the envelope that has been allocated to that MDA. I do not see the size of the budget growing more than has been brought, but what they have been given the latitude to do is to be able to move the money within the capital and recurrent sub-heads. That is not moving within capital and within recurrent. So, if you are moving money within recurrent, it is strictly overhead. There is also the aspect that we have always been uncomfortable which has to do with personal budgets. If there is concrete evidence that such personal budget has been inflated, so the Appropriation Committee will work with the relevant House committee to ensure that it is pruned down to what we think is the appropriate sum. Since the budget is coming from the executive we expect that they have consulted with the relevant MDAs before it was brought to us. Talking about the zero budgeting system, I think what they are trying to do is to make sure it takes off this year. It is going to be a gradual process; you may not see the future very much in the budget now because it is new, but at the end of this budget period, we will be able to review the process and see if they can retain it.
The Senate saw, hidden in the education budget, N10b, has the House found anything like that in any of the MDA budgets?
In every budget, you will have such instances and it is not in every such instance that the action is deliberate. We must also realise that the budget is prepared by humans and so you have to give a bit of flexibility. Sometimes, figure do not tally, in such instance, we pick out this and ensure that they are properly reflected and cleared away from the budget, but again, this time around, the committees of the House, are all doing a very thorough job because they are engaging the MDAs at the moment and I am sure wherever there are such issues, they will be able to deal with it. We always take exception when people say the National Assembly pads the budget, it is a complete insult to us. We do understand that what comes from the Executive is a proposal, and it is the NASS that is constitutionally empowered to pass the budget; we have the constitutional power to move, amend the way we deem fit, that is going to be in the interest of Nigerians and the budget will be implementable. The issue of padding should not even come up. As at today, nobody from the executive arm of government has used the word padding of budget by the legislature. We at NASS are very conscious of the time limit and also minimize the areas of conflicts with the Executive.
On production cost of oil?
One very important aspect that swallows a large chunk of the money in the budget is the cash call and production costs. Many people take their eyes away from production costs. But it is critical; this is because every year we pay an average of one trillion naira as cost of production. So, it is important that this time around, we need to sit with relevant authorities in the oil and gas sector to see the details of this production cost, to ensure the country is not just being shortchanged. We are just mopping a lot of money from the first line charge just to give to our foreign partners.
