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Tag: MTEF

  • MTEF: FEC to hold emergency meeting Monday

    MTEF: FEC to hold emergency meeting Monday

    The Federal Executive Council will hold an emergency meeting on the Medium Term Expenditure Framework (MTEF) on Monday.

    The meeting which will be presided over by President Muhammadu Buhari is expected to approve the MTEF in preparation for the presentation of the 2016 Budget.

    The Minister of Budget and National Planning, Udoma Udo Udoma, told State House correspondents on Saturday that his ministry would seek FEC’s approval for the MTEF next week.

    However, the minister did not give a specific date for the meeting.

    Udoma spoke with journalists shortly after Vice President Yemi Osinbajo visited the old Banquet Hall of the Presidential Villa where officials working on the 2016 Budget have been working.

    He said the government is working hard to ensure the budget is ready before the year ends.

     

  • Presidency to present MTEF to NASS

    The Presidency is set to present a Medium Term Expenditure Framework (MTEF) and a Fiscal Strategy Papers (FSP) to the National Assembly any time next week.

    The Senior Special Assistant to the President on National Assembly Matters, Senator Ita Enang, stated this in a chat with journalists on Friday.

    This, according to him, would be followed by the presentation of the 2016 Appropriation Bill for the consideration of the lawmakers.

    Enang said: “I want to assure you that in the next few days, Mr. President will forward the Medium Term Expenditure Framework and the Fiscal Strategy Paper to the National Assembly.

    “The National Assembly will consider it and in the course of it, Mr. President will communicate to the National Assembly the date on which the 2016 budget will be laid.

    “You know that is normally preceded by a letter from the President requesting for a date for the presentation of the documents.”

    He described the speedy passage of the 2015 supplementary budget by the National Assembly as an indication of cordial relationship between the executive and the legislative arms.

    “The National Assembly will consider it and in the cause of it, Mr. President will communicate to the National Assembly the date on which the 2016 budget will be laid. The letter will be issued and the letter will communicate the date”.

    Part II (Sec. 11 1b) of the Fiscal Responsibility Act 2007, prescribed that the government shall submit the MTEF for three financial years not later than four months before the commencement of the next financial year

    But Enang insisted the government did not violate the Fiscal Responsibility Act even as it has yet to present the documents a few days to the end of the 2015 financial year.

    According to him, the President was still acting within the framework of the relevant laws and that there were no areas of friction between the two arms of government.

    “There is no violation at all. It’s within what is allowed by law. We are not in violation at all,” the presidential aide stated.

  • Presidency, House rift over budget deepens

    Presidency, House rift over budget deepens

    The House of Representatives will begin the scrutiny of the 2014 Appropriation Bill this week. VICTOR OLUWASEGUN and DELE ANOFI examine the aspects of the budget that may deepen the existing conflict between the Presidency and the House.

    The budget controversy is not over yet. The document was submitted to the National Assembly was late. The budget, according to many legislators, has not reflected any serious attempt by the Federal Government to alleviate the suffering of the masses. They also frowned at the delay, stressing that timing is critical to its passage and implementation.

    The N4.6 trillion budget, which was laid before the two chambers by the Minister of Finance, Dr. Ngozi Okonjo-Iweala, on December 19, last year is likely to be a bone of contention between the executive and legislature as the National Assembly resumes sitting this week.

    The House has already complained about the breach of the Fiscal Responsibility Act by the Federal Government. The legislators pointed out that the government failed to submit the Medium Term Expenditure Framework (MTEF), six months before the budget was laid before the National Assembly. The Spokesman of the House, Zakari Mohammed, said that the breach has implications for the due process.

    This year’s budget is premised on 2.3883 million barrel per day. Many lawmakers are of the opinion that a budget in which the recurrent expenditure is over 72 percent and the capital expenditure is 27 percent may be counter-productive.

    Last year, the differences in the crude oil benchmark between the National Assembly and the Executive on the one hand, and the two chambers on the other, were resolved. While President Goodluck Jonathan proposed $74, the Senate approved $76.5. But, the House raised it to $79, contrary to the position of the joint Committee of the two chambers on the MTEF.

    The Minority Leader, Hon. Femi Gbajabiamila, who spearheaded the opposition to the $76.5 benchmark, said that, since the MTEF was a rolling plan, it was better to stick to the 2013 benchmark. He was supported by the members of the House.

    A five-member conference Committee on the 2013-2015 Medium Term Expenditure Framework set up by the Speaker, Aminu Tambuwal, met its Senate counterpart and agreed on the $ 77 per barrel as the oil benchmark for the budget. The members of the committee are the Chairman, Finance Committee, Abdulmumin Jibrin, the Chairman Aids, Loans and Debt Management, Adeyinka Ajayi, Daniel Reyenieju, Abdulrahman Terab and Fort Dike.

    Recent analysis of the budget has shown some projected expenditure in the budget, which may generate a fresh row between the Presidency and the House during the budget debate. For instance, in the budget, the Federal Government plans to spend N7 billion on the proposed ‘National Dialogue’. The All Progressives Congress (APC), which is now in majority in the House of Representatives, thinks that the ‘National Dialogue’ is a waste of time.

    The fact that President Goodluck Jonathan did not give a breakdown of how the funds would be utilized may not help his case.

    The Minister of Finance, Mrs. Ngozi Okonjo-Iweala, said: “The Capital budget is N1.1 trillion; its about 27 percent of the budget and the recurrent is about 72 percent”. She explained that the budget, which excludes the SURE-P of about N268 billion for the Federal Government, “is the budget that continues Mr. president’s drive to really diversify the economy and create jobs.”

    The public perception is that the House of Representatives is more thorough when it comes to budget scrutiny. There was a rift between the House of Representatives Committee on Finance and the Minister of Finance over “the 50 questions on the economy” last year.

    The Finance Committee had generated the questions after reviewing key aspects of the Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper ( FSP) submitted to the National Assembly by the Presidency. The committee focused on crude Oil production, Crude Oil benchmark price, revenue management and diversification, debt profile and debt service payment, high non- debt recurrent expenditures, capital projects implementation and financing terms amongst others.The committee said that the House would not consider the budget, until the questions are answered. The committee gave the Minister two weeks to answer the questions in writing. Last week, the minster forwarded his reply.The Chairman of the House Committee on Rules and Business has said that the budget consideration was one of the important issues on the agenda of the House this week. Hon. Zakari Mohammed said that the minister’s response to the 50 questions will aid the House during the debate.”The Finance Committee was given a responsibility by the mandate of the House and the Committee must report back to the House what it was asked to do,” he said.

    The Minister of Finance seems to have eventually understood the import of the position of the lawmakers on the 50 questions by responding with a document of over one hundred pages. Areas that may further cause friction between the Presidency and the House are not difficult to envisage. One of these is the alleged fraudulent utilisation of the ‘Service Wide Vote’ in previous budgets, which may cause the House to put this component in the 2014 budget under the microscope.

    The House Committee on Public Accounts headed by Solomon Olamilekan-Adeola has vowed to probe the misappropriation of the Service wide vote. He alleged that trillions of naira were wrongfully applied.

    For this year, the capital expenditure figures captured under the Service Wide Vote of the Federal Ministry of Finance is in excess of N433.5 billion. Although the lawmakers may welcome the N100 billion meant to finance constituency projects for federal legislators, they may likely scrutinise the remaining expenditure on the service wide vote, which include N62.8 billion for special intervention, N8 billion for national job creation scheme; N30 billion for the sinking fund for infrastructural development; N14 billion for Nigeria Electricity Liability Management Company (NELMCO) and N16 billion for the bulk trader.

    Uunder the miscellaneous heading of the service wide vote, N27.5 billion is proposed for the unexplained contingency funding, while N5,149,600,000 will be set aside for adjustments to the recurrent budget. There are other nebulous expenses. They include N5 billion for capital cost adjustments, N21 billion earmarked for election logistics support and the N7 billion proposed for payment of outsourced services for the Federal Government and another N10 billion for a special account not specified.

    With the service wide vote, the Ministry of Finance gets the largest chunk with N1.6 trillion allocation from the budget proposal. This total allocation of N1,653,424,146,940 is 35.6 per cent of the budget for 2014.

    The position of the Public Account Committee was that the Service Wide Vote should not be more than five percent of the budget or it should be eliminated from the budget. The Committee believed it is a drain pipe on the economy because it is often manipulated and subjected to abuse, to the detriment of the economy.

    Also, there is the issue of the non-compliance of MDAs with Section 22 of the Fiscal Responsibility Act, which mandates government-owned corporations listed in the schedule to the Act to pay 80 percent of their operating surplus into the Consolidated Revenue Fund (CRF) of the Federal Government. In a document by the Fiscal Responsibility Commission to the House Committee on Finance, the Commission said many of the MDAs are saying they could not comply with the section because of “Presidential Directives.”

    Consequently, the House Committee on Finance held an investigative hearing to ensure that the internally Generated Revenue (IGR) of listed corporations are captured in the revenue framework viz the 2013 budget. It is also expected that the lawmakers would demand that all of over 800 MDAs of government would be listed in this year’s budget. How the hitherto unlisted MDAs would react to the new development remains to be seen, as the remittance of government share of the IGR was shrouded in secrecy.

    The reduction in the expected income to the nation due to oil theft is one area that will generate controversy. Okonjo-Iweala, while giving reasons for the lower budget estimates for 2014, as against that of 2013, said: “ You can understand that we have some revenue challenges, which we had been very clear on all along because of the losses we suffered in terms of oil revenue. Also, there are losses from non- oil revenue due to the lower customs duties. But the House is not likely to accept this excuse.

    During the inauguration of the Ad-Hoc Committee on Crude Oil Theft on December 11, last year, Tambuwal accused the Presidency of collusion in crude oil theft. He said: “We must realise that, without the protection of highly placed people, without the connivance of officials and experts in the sector, the activity of illegal bunkering would have been curtailed long ago.

    “No country can endure such blatant rape of its resources by a few criminals, who seem to grow bolder by the day. And no self respecting parliament can watch this kind of gross sabotage and not intervene.”

    Mitchell Rivasi The Acting Co- President ACP- EU, Michael Rivasi, said at the 10th regional meeting (West Africa) of the ACP-EU Joint Parliamentary Assembly in Abuja in July last year, that the loss of 400, 000 barrels of oil per day is huge. She said that there must be collusion by government officials and the major oil companies.” We need to get traceability on oil to avoid theft. We need to apply the Kimberly process. Every oil has its DNA, Major criminality is involved. How can you have 400,000 barrels stolen in a day?”

    She suggested that the international community should not “take oil that has no certificate of origin” but further wondered “how will this be effective if the government officials are colluding and are issuing the certificate of origin for stolen oil?

    The House may therefore, not accept the assertion that the oil theft is the major reason for the reduction in the 2014 budget because of its belief that the Federal Government is aiding it. Besides, the legislators are cynical about the claim of a reduced income in the face of the accusation by the Central Bank Governor, Mallam Lamido Sanusi, that the Nigeria National Petroleum Corporation (NNPC) failed to remit $49.8bn to the Federation Account from January, 2012 to July 2013. Although the missing $49.8 is said to have been creatively scaled down to $10 billion, the Presidency is seeking the resignation of the CBN Governor over the misinformation. Gbajabiamila said that the House would not assist the President in sacking Sanusi, adding that, when the National Assembly asked Jonathan to sack Oteh, the Director-General of the Securities and Exchange Commission, he refused.

    Obviously, the missing fund may be another source of contention during the budget consideration.

    Another issue is the flagrant contravention of the appropriation law the Executive. In this case, the issue of the N255 Armoured cars purchased by the Aviation Minister, Ms. Stellah Oduah, readily comes to mind.

    The report by the Nkiruka Onyejeocha-led House Committee on Aviation had urged President Jonathan to review the continued engagement of Stella Oduah as the Minister of Aviation due to the roles she played in the procurement of the vehicles for her use by the Nigerian Civil Aviation Authority (NCAA)

    The report, which indicted the Minister of having contravened the Appropriation Act, 2013 and the approved revised thresholds by exceeding the ministerial approval limit of N100 million, was considered and adopted by the House. The Minister approved N643m for the purchase of 54 vehicles.

    The debt sustainability will be another point of focus in the 2014 budget. The debt stock, as at June 2013, stood at US$6.9 billion. The unbridled borrowing has always been a sore point between the Executive and Legislature. Recently, the Adeyinka Ajayi-led House Committee on Aids, Loans and Debt Management, began to probe the debt profile. But the Federal Government has always claimed that it borrowed based on the national need, adding that over 40 percent of the country’s debt stock was incurred by the states.

    A letter from the Secretary to the Government of the Federation ( SGF) Senator Anyim Pius Anyim, in response to a query from the House of Representatives on the non-compliance with the Fiscal responsibility, in terms of overt borrowing, said: “The Federal Government is quite clear and definite with its policies and strategies for borrowing and public debt management. Hence, it recognizes that it would borrow only when it is absolutely necessary and as much as possible on concessionary terms.”

    Anyim argued that the Federal Government is “ guided by the 3 per cent fiscal deficit/GDP ratio prescribed by the FRA, 2007.”

    In spite of this, the House Committee on Finance has lamented the non-existence of a debt exit strategy by the Executive

    The poor implementation of the previous budgets will also likely come up for debate. Speaking of the 2013 budget releases and implementation, the Finance Minister, Mrs. Ngozi Okonjo- Iweala told reporters on December 19 last year that: “of the previous budget implementation, I believe we released 64 percent of that budget.”

    But members are likely to question her assertion as the House believes that implementation of 2013 budget did not even reach the 40 percent threshold. Recall that the House had once threatened President Goodluck Jonathan with impeachment over low budget implementation.

    Subsidy funding might be another sore point between the House and the Executive. The Dakuku Peterside-led House Committee on Petroleum Resources (Downstream) has been mandated to probe the NNPC over the subsidy for Dual Purpose Kerosine (DPK) to ascertain the actual amount spent on kerosine subsidy from 2010 to 2013. Dakuku said that the country had spent over N63bon subsidizing kerosine in the last three year, i.e 2010,n2011 and 2012 at N110b, N320b and N320b respectively for those years.

    But conflicting claims by the Minister of Finance and the NNPC on the source of money through which kerosine is subsidized and the amount involved therein would set the House scanning subsidy components in the 2014 budget thoroughly. Of the N4. 6 trillion proposed as the 2014 budget, subsidy estimates and debt payments would cost over N2 trillion.

    The plan for the Presidency to deposit N1.5bn for an 11th aircraft in the presidential fleet may meet with reservation. Already, the aircrafts of the PAF include two Falcon 7X jets, two Falcon 900 jets, a Gulfstream 550, one Boeing 737 BBJ (Nigerian Air Force 001 or Eagle One), and a Gulfstream IVSP, one Gulfstream V, Cessna Citation 2 aircraft and Hawker Sidney 125-800 jet.

    A lawmaker joking said: “the House may not approve this item unless, of course, the Presidency is able to convince members that it is starting a viable commercial airline operation.”

    The fact that the President and Vice President Namandi Sambo are to spend N2.4 billion for both foreign and local trips may not go down well with the lawmakers, neither would they rush to approve N34.5 million for the purchase of two animals for the Villa Zoo.

    Nigerians also expect the lawmakers to be interested in knowing why over N2 billion was allegedly budgeted by an establishment like the National Mathematical Centre (NMC), Sheda, for the fueling and maintenance of aircraft, sea boats and railway equipment which it does not have.

    The Centre reportedly appropriated “N509,216, N429,056 and N465,522 on the maintenance of aircraft, sea boats and railway equipment” with an extra N293,974 and N421,224 earmarked for same.

    Sequel to the consideration of the 8-clause recommendation in the report by the House Committees on Finance, Appropriation, Legislative Budget and Research, and Aids, Loans and Debt Management, the accepted parameters for 2014-2016 MTEF were: (i) “Crude Oil production of 2, 3883 mbpd, 2,5007mbpd and 2,5497 mbpd for 2014, 2015 and 2016 respectively; (ii) “average exchange rate of N160/USD for the next three years; The third clause, “ adoption of US$76.50 per barrel as the benchmark price of crude oil,” was rejected after a stormy debate.(it was eventually agreed at $77 by both chambers (iv) “Corporate Tax and VAT rate of 30 percent and 5 percent respectively; (v) “ that the Government should strengthen and consolidate its fiscal strategy to narrow the gap between projected and actual revenue for the period 2014-2016 curtailing oil theft and diversifying the economy to increase tax bases so as to increase tax revenue; (vi) “ that the details of the SURE-P projects to be executed be attached as an addendum to the annual budget estimates for approval by the a National Assembly.

    As the House resumes plenary from the Christmas and New year break, and begins consideration in the 2014 budget, it is apparent that it will definitely not be business as usual.

    Though the issue in which the House advised President Goodluck Jonathan to sack the Director General of the Security and Exchange Commission, Arumah Oteh because she is not qualified and the refusal of the do such, and the same treatment the President gave the House Committee on Aviation’s report on the N255 million armoured car scandal involving the Aviation Minister, Stella Oduah, has cast the National Assembly as a toothless bulldog, members say a more assertive NASS is in the offing.

    Speaking on if or not the House would be thorough in considering the 2014 budget, Dakuku Peterside, Chairman House Committee on Petroleum Resources (Downstream) said:

    “The members of National Assembly are duty bound to defend the interest of Nigerians. They have a responsibility to ensure that funds are judiciously applied for the good of all Nigerians not for the good of individuals. They are under a moral duty, they are under oath to defend the interest of the generality of Nigerians especially the common man on the street,

    “ It is not the elite that voted them into power, the elites in all communities are infinitesimal, not more than 2 percent of Nigerians. And so, 98 percent of the common people put them in power. And I don’t believe that under the leadership of Tambuwal, the House will renege on that duty- it will not. So, I’m confident that the House of Representatives which is the custodian of the budget will do justice to this budget and the final outcome will impress Nigerians.”

    Mohammed was emphatic last week that the House will not be a rubber stamp for the 2014 budget. “We must consider the budget because its a money bill, but we will not be blackmailed or bamboozled to just assume its a case of garbage in, garbage out. Anybody who thinks it is going to be like that is just joking because we are going to ensure a sense of fairness in its consideration to the benefit of Nigerians who are our employers,” he said.

  • Playing politics with Budget 2014

    Playing politics with Budget 2014

    President Goodluck Jonathan has postponed the presentation of the 2014 budget to the National Assembly. Correspondents VICTOR OLUWASEGUN and DELE ANOFI write on the politics of budget delay and its implications for governance.

    Anxiety is mounting as President Goodluck Jonathan prepares to present the next year’s budget to the National Assembly. The budget presentation was postponed last month, following the shifting political allegiance in the Senate and the House of Representatives triggered by the defection of many legislators from the ruling Peoples Democratic Party (PDP0 to the All Progressives Congress (APC).

    The presentation has been aborted on two occasions. The President may have read the handwriting on the wall. Although the government explaineed that the postponement became necessary because the House of Representatives was yet to conclude work on the 2014-2016 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), and reconcile differences on the crude oil benchmark figure with the Senate, critics said that the delay was informed by political reasons.

    In 2011, President Jonathan presented the 2012 budget proposal before the joint sitting of the National Assembly when the House of Representatives was yet to concluded work on the MTEF and FSP. It was the other way round when the President presented the 2013 budget proposal as the Senate was still working on the document. House Spokesman Zakari Mohammed alluded to that fact when he advised the President to put up other reasons for his failure to appear before the lawmakers as promised. “It is not our fault that the budget was not presented because the House is still within the timeframe for passing the MTEF”, he said.

    Mohamed said the President was being diplomatic, recalling that the President had presented the budget in the past at a time the Senate had not passed the MTEFF.

    “Last year, the Senate was yet to pass the MTEF, but the House had passed it when the President presented the budget. But, it was not an issue then. When we look at it from another angle, the coming of the MTEF to the NASS was even belated because, according to the constitution, the MTEF is supposed to be transmitted to the NASS six moths before the end of the year. But we got this in September,” he added.

    According to Mohammed, the implementation of the budget may suffer. If this happens, he said the National Assembly will not take the blame.

    Sources said the aborted presentation may not be unconnected with the alleged plan to embarrass the President by some aggrieved lawmakers, who have sympathy for the New Peoples Democratic Party (PDP). It was learnt that some of them wanted to demonstrate to the President that he does not command parliamentary majority support. Following the defection of five of seven aggrieved PDP governors, tension had enveloped the National Assembly. In fact, many legislators allegedly boasted that they would take a pound of flesh from the party for its culture of tyranny.

    A PDP legislator from Kano State, Aliyu Madaki, however, urged the Presidency to embrace the reality. He said that the earlier the President and the PDP accept the new political reality on ground, the better for democracy in Nigeria. He said: “For me, I see this as a way forward for our democracy and with this, the future is not only bright for our democracy, but the entirety of Nigerian people. I believe Nigerians will begin to see a more vibrant federal legislature because there is a new order in place. We will leave the PDP. The injustice is too much. We will follow our governors; there’s no doubt about it. We cannot continue to stay and face injustice. This is the moment we have been waiting for, and this will eventually change the leadership in the House”.

    Already, 57 New PDP legislators have openly reiterated their determination to oppose the President, if there is a compelling reason to do so in the national interest, and in accordance with the constitution.

    Also, there are rumours that certain principal officers of the House may be removed. The Speaker, Hon. Aminu Tambuwal, is said to be working round the clock to appeal to the new power bloc to mellow down. It is believed that, when the 137 APC members and 57 new PDP members join forces, the 194 legislators may pull the rug off the feet of the PDP.

    According to sources, the APC members were initially pushing for the removal of the Deputy Speaker, Emeka Ihedioha, the majority Leader, Mulikat Akande-Adeola, the Deputy Leader, Leo Ogor, the Chief Whip, Isiaka Mohammed Bawa, and the Deputy Chief Whip, Ahmed Mukhtar Mohammed. But, ahead of the APC’s plan to unveil the strength of its members, the Speaker moved to douse the tension generated by the proposed change in the power structure. However, the Minority Leader, Femi Gbajabiamila, said the unveiling is coming soon.

    Tambuwal is popular on both sides. Therefore, he was able to persuade his colleagues to avoid any action capable of creating further division in the House.

    The Presidency and the PDP have been scheming to break the ranks of the new PDP and the APC in the House. The desperation, according to a source, was borne out of the benchmark tussle and the need to give the President a soft landing in the National Assembly. It was alleged that the legislators took bribe to toe the party line. But on December 3, Deputy House Spokesman Victor Ogene debunked the allegation that each member received a 100,000 dollars to peg the benchmark of the 2014 budget at $76.5 per barrel of crude oil.

    The benchmark has been a source of contention between the Presidency and the House, with the House insisting on $79 dollars per barrel against the Senate’s adoption of $76.5 per barrel.

    The House went into a two-hour executive session on the issue of parameters to adopt on the 2014-2016 MTEF sent to the National Assembly by the President, particularly the benchmark. Ogene said members did not fight over the issue at the closed door session as alleged by some people.

    “Seriously speaking, you all saw us when we came out smiling. The issues, I told you clearly, was between those who insisted that the benchmark remains at $79 and those who feel that that it was okay at $76.5”, he clarified.

    The lawmaker while referring to the allegations of money- for- benchmark, cautioned Nigerians against glorifying rumours, adding: “If money went round in the Senate, I’m not a senator, and I’ve not read any such report. In fact, I’ve not seen any dollar. So, if money has come from anywhere, the question should be put to the person sending the money. I will be glad to get money on behalf of my people, if you have a leeway to the person sharing the money”.

    Before the defection of the five governors, the cold war was raging in the PDP. A lawmaker said that the development was not surprising, pointing out that the PDP has always been in the minority, despite being the majority party in the House. The PDP member, who pleaded anonymity, said not many were taken by surprise by the defection, noting that, since the inception of the Seventh Assembly, Executive Bills and motions have often been resented.

    She said: “PDP has always been in the monitory. It is not a new development because of the posture of those that have defected now. Though they were in the PDP, they were never sympathetic to the cause of the party. So, it is just only the few of us that have to battle every time to see that bills and motions sponsored by the executive see the light of the day and that has been a tough battle”.

    President Jonathan has not been in the good books of the Lower Chamber. The legislators often complained that he had ignored their inputs into governance. Last month, over 30 bills listed for presidential assent were allegedly ignored. Some of the bills have been with the President for more than 60 days. According to the constitution, the President ought to have assented to them within 30 days. The lawmakers believed that it was a deliberate act, especially when a presidential aide said that resolutions of the National Assembly were mere opinions.

    With the PDP on the brink of becoming the minority party, the days ahead may be difficult for the President. and vice versa for the hitherto opposition party, APC, options of muscle flexing for President Jonathan are disappearing and fast too, says a political analyst, Dr Alfred Armstrong.

    According to a critic, Dr. Alfred Armstrong, the President has two options. He said: “If he sees the office as an opportunity to serve his people and leaves the country better than he met it, then, he must tow the line of compromise. Against what any of his advisers would say, President Jonathan must be ready to make sacrifice by instilling on the PDP members in the House that fact that the nation comes first and that they must not do anything to jeopardise motions, bills and reports emanating from the APC or other parties”.

    Armstrong warned that, if compromise is jettisoned, the President and his party may lose the battle. He said that, even if the new PDP lawmakers refrain from defecting to the APC, their actions and activities would ultimately be detrimental to the interest of PDP.

    “Intimidation and revenge, which are the second option would leave the country worse off. To agree on most matters of national importance would be a Herculean task for both the lawmakers and the Presidency. The power struggle would play out during the budget debate and executive bills would find it harder to scale through. We should also expect more vigorous and targeted investigations from the lawmakers.

    “ If we put these together in another form, our democracy may be better for it, but the PDP would not find the new political equation too welcoming,” he added.

    The Chairman of the House Committee on Petroleum (Downstream), Hon. Dakuku Peterside, said that the change in power structure would bring a better Nigeria. He said: “There has been a lot of alignment and realignment. There’s a whole new political current going on in the two chambers of the National Assembly. One thing that is certain is that the power configuration must change.

    “Now, the change in power configuration will come with consequences and implications. It might affect the leadership of the parties in the National Assembly, and again, it will also affect the way the NASS relates with the executive arm of government. It might be negative or positive, but ultimately, it will be for the good of the Nigerian people. “For the first time, there will be effective checks and balances. It will no longer be family affairs. The days of family affairs are gone and gone for good. The politics of Nigeria will never be the same again.”

  • Why budget presentation is delayed, by Presidency

    Why budget presentation is delayed, by Presidency

    The Presidency explained yesterday why the presentation of the 2014 Budget proposals to the National Assembly is being delayed.

    Special Adviser to the President on Media and Publicity Dr. Reuben Abati said the delay was to ensure strong intra-governmental harmony between the Executive and the National Assembly.

    The delay, he said, would also prevent unnecessary acrimony that usually trails budget passage.

    He said: “Previous acrimonies were blamed on failure of intra-governmental relationship.

    “The budget has been ready for over a week now, but since the two arms of the National Assembly are yet to harmonise their positions on the crude oil bench mark in the Medium Term Expenditure Framework, MTEF, and the Fiscal Strategy Paper, FSP, it was wise for Mr. President to wait until this is done.”

    He said the Presidency would cause the budget to be laid before the National Assembly as soon as the harmonisation is concluded.

    Senior Special Assistant to the President on Public Affairs Dr. Doyin Okupe, defending the President, said: “This disparity, if not harmonised, will grossly undermine the veracity of the projections in the 2014 budget as prepared by the Federal Government.

    “The President, therefore, chose to allow the two chambers arrive at a harmonised figure after which the presentation of the 2014 budget will be done by the President such that the processing and approval by the National Assembly will not be unduly encumbered.

    “We trust that this pragmatic approach will be appreciated and wholesomely well received by the distinguished senators and honourable members of the National Assembly”.

    The President’s aide debunked insinuations in some quarters that the President boycotted the exercise for security reasons or that the government had anything to hide on the budget issue.

    “We assert that this is not a boycott of the National Assembly or an attempt to create discord between the two arms of government. Rather, it is an effort to improve on procedural efficiency, conviviality and cooperation between the legislature and the executive in the overall interest of our nation, our citizens and good governance,” Okupe said.

     

  • Budget crisis looms over oil price benchmark

    Budget crisis looms over oil price benchmark

    President Goodluck Jonathan aborted yesterday his 2014 budget presentation at the National Assembly. He sent a letter excusing himself.

    House of Representatives Speaker Aminu Tambuwal entered the chamber at 11:25 a.m and read the President’s letter.

    Jonathan cited the disparity between the oil price benchmark of the Senate and the House as reason for his action.

    The letter reads:

    “Please recall that I had written requesting the Honourable House of Representatives to grant me the slot of 12 noon on Tuesday 19th November 2013 to enable me address a Joint Session of the National Assembly on the 2014 Budget.

    “However, considering the fact that, whereas the Distinguished Senate has approved the Medium Term Expenditure Framework (MTEF) based on a benchmark of $76.5 per barrel, the Honurable House of Representatives has used a benchmark of $79 per barrel, it is infeasible for me to present the budget in the absence of a harmonised position on the MTEF.

    “In the circumstance, it has become necessary to defer the presentation of the 2014 Budget to a Joint Session of the National Assembly until such a time when both respected chambers would have harmonised their positions on the MTEF. It is my hope that this will be in the shortest possible time.”

    This is the second consecutive postponement of the 2014 budget presentation.

    It became glaring at 9:50 am yesterday when the Sergeants-at-arm began removing the labelings and demarcations meant for the joint sitting in the Green Chamber that the President would not honour the National Assembly with his presence.

    The sit- at- home order to the over 3,000 National Assembly workers from grade level 01- 14 by the National Assembly, the closure of all banking and commercial activities, the excessive security screening at the entrances, the facelift of the complex, the prim and proper dressing by lawmakers, the red carpet all cam to nought yesterday.

    Some senators and House of Representatives members were disappointed at the President’s action.

    The presentation, which ought to have been made on November 12, was cancelled based on differences over the 2014-2016 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), especially on the oil benchmark.

    While the Presidency fixed $74 for the benchmark, the Senate passed $76.5 while the House fixed $79 in the passed MTEF.

    The All Progressives Congress (APC) lawmakers went into a closed door meeting to discuss the aborted presentation.

    It was learnt that the APC lawmakers were not disposed to the “drop-on-the-table” budget presentation.

    After Speaker Tambuwal read the President’s letter, the House attempted to treat some bills which the movers said they were stepping down. Consequently, the House adjourned at noon.

    Minority Leader Femi Gbajabiamila said: “We have not taken a decision on the MTEF because the Senate and the House have different positions and we have to reach a joint decision through executive session and harmonisation and arrive at a joint position.

    “Since the budget is based on the passage of the MTEF, I think the President has given a good and cogent reason for not making it today (yesterday).

    “I don’t know if the House is really expecting the President to make the presentation or not, yes there is some talk about that but to some of us, it is not just about the presentation.

    “This is because, what we are talking about is the integrity of the budget and for the sake of the integrity of the budget, we have to realise that it is not just about our democracy but about the integrity of an arm of government.

    “Under the constitution, it is the President that have to lay it and if it is read that ‘causing to be laid’ is interpreted to mean you can send anybody, then that is setting a bad precedence.

    “It means that a President can decide to send his wife or any of his Personal Assistant on Domestic Affairs or any of his cronies.

    “He may even decide to mail the budget but this is unacceptable; the argument that we had a precedence does not hold water because the President in question (late President Yar’Adua) was incapacitated and we all knew what happened to him unfortunately.

    “It is an exception to the rule. This President is not incapacitated. “

    Another member, Pally Iriase (APC Edo) said the budget presentation was too important for the President not to make the address, considering the fact that there is no State of the Nation address.

    House spokesman Zakari Mohammed said: “It is not our fault that it wasn’t presented because the House is still within the timeframe for passing the MTEF.

    “When we look at it from another angle, the coming of MTEF to the NASS was even belated because, according to the Constitution, the MTEF is supposed to be transmitted to the NASS six months before the end of the year, but we got this in September.”

    He said the reason given by the President could not have been the sole reason for the aborted presentation.

    According to him, the President presented the budget at a time when the Senate had not passed the MTEFF.

    “Last year, the Senate was yet to pass the MTEF but the House had passed it when the President presented the budget; it was not an issue then.

    “The House will go through the legislative process by raising a Conference Committee, harmonise the position of the two Houses, but there is no definitive date for its passage,” he added.

    Senators were angry.

    Senator Kabiru Gaya (Kano South) said: “First of all, let me say one thing. The President gave a date last week that he would be coming and when he gave that date even the interim MTEF had not been discussed.

    “So, he gave a date earlier, so if it was ready for that date we would have received it without even passing the MTEF.

    “So, all I am saying is that the President should have come here today, present his budget and issue of benchmark can be discussed and agreed during the deliberations on the budget.

    “I am sure that was what happened. Even the MTEF was not discussed until after the budget was passed. So, I believe maybe the President has another reason.”

    Kabiru Marafa (Zamfara Central) said: “We have to agree on the same benchmark because that is what the Constitution of Nigeria says. No one has an upper hand above the other.

    “We have to agree as soon as practicable because we have to do away with the issue of arm twisting and impunity because this is getting too much from the executive.

    “Why should you peg the benchmark? You cannot eat your cake and have it. There is separation of power. The issue of budget is the business of the legislature.

    “The Constitution provides that all revenues acruing to the federation be retired into an account and after which it will be disbursed to the three tiers of government.

    “What we have now is that the executive put a benchmark and have excess which was used to cover inadequacies on the increase everyday and it is nobody’s business.

    “It is for the executive to implement. The excess crude account is illegal. That is why, according to governors recently, N5billion is missing from the account. Who removed the money? Funds should be appropriated before they are spent.

    Mohammed Maccido ( Sokoto North) said: “The two chambers have to agree on the same benchmark because that is what the Constitution says. We have to deliberate on this issue and we have not done that.

    “Our leadership at both chambers had sat down with the Minister of Finance too. I was in the meeting too and what was agreed upon was that we should try as much as we could to adhere to $76.50 per barrel but that is within the leadership. When you get to your different chambers, it’s a different ball game.

    Heineken Lokpobri (Bayelsa West) said: “I don’t think that what is happening is strange. Normally, if the House passes a different version from the Senate, there will be a conference committee and as it is the House passed $79; the Senate passed $76.5.

    “There has to be a formal conference committee that will harmonise both positions.

    “Once that is done, the President will now come and present the budget but Nigerians need to know that this law mandating us to approve the MTEF before the budget can be presented is a recent law, it wasn’t there since 1999.”

  • Why budget presentation was shifted

    Why budget presentation was shifted

    President Goodluck Jonathan will no longer present today the 2014 Appropriation Bill – no thanks to differences between the lawmakers and the Presidency.

    The issues are being discussed for their resolution ahead of next Tuesday’s presentation of the proposal before a joint sitting of the National Assembly by the President.

    Though no reason was given for the sudden postponement, our correspondents gathered that part of the reasons is the non approval of the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) by the House of Representatives.

    A senator noted that there was “no way Mr. President will present the 2014 Appropriation Bill when the House of Representatives is yet to pass the MTEF and the FSP”.

    The Chairman, Senate Committee on Information, Media and Public Affairs, Senator Enyinnaya Abaribe, said: “I have just been told. I don’t really know the reason, but since both sides have agreed, it must be for good reason.”

    Another reason for the postponement, it was gathered, was the argument of lawmakers that the Executive failed woefully in the implementation of the 2013 budget, which they put at below 40 per cent.

    The House of Representatives is also unhappy that the Presidency snubbed its recommendation that the Director- General of the Securities and Exchange Commission (SEC), Ms Arunma Oteh, should be removed.

    These were two of the caveats in the 2013 budget, which, according to representatives, President Jonathan had failed to honour.

    The House is also yet to debate the MTEF and take a position on the benchmark for oil price, among other parameters.

    The planned protest to disrupt the presentation of the budget today by the National Assembly chapter of the Parliamentary Staff Association of Nigeria (PASAN) was also partially responsible for the shift.

    The workers were planning to disrupt the budget presentation to drive home their grievances over the inclusion of some questionable employees in the Staff Welfare Committee by the NASS management.

    Though the protest was called off yesterday, the association’s spokesman, who signed the protest notice, Odo Chris, said a congress would be convened shortly to chart the way forward, adding that the shelving of the protest was due to attempts by the management to address the “raging staff welfare issue”.

    The Nation learnt that there were two meetings last weekend on the budget. One was between Senators and House members. The other was with the Presidency.

    At the meeting between leaders of the two chambers, efforts were said to have been made to arrive at a common position on what should be the oil price benchmark.

    While the Senate adopted $76.5 during its deliberation on Medium Term Expenditure Framework (MTEF) presented to the National Assembly by the President, the preponderance of opinion from members of the House (which is yet to deliberate on the MTEF) was that the benchmark should be $80 per barrel.

    To this end, the National Assembly leaders were said to have told the President to put his house in order before bringing the budget before the National Assembly.

    “Though a new date – Tuesday – has been set, other factors may still push the date out of contention, if no solid agreement is reached between the National Assembly and the Executive as the House gets set to debate the MTEF this week,” a source said.

    Ali Madaki (PDP, Kano) who last Thursday moved a motion to stop the President from making the presentation of the budget today, said the latest development had vindicated his position.

    The lawmaker said adherence to the constitution by Nigerians on the street and those in authority was the motive behind his opposition to today’s planned presentation.

    According to him, the basic prerequisites of presenting the budget were not met and it is a concern that should be addressed.

    “Has the Medium Term Expenditure Framework (MTEF) been approved by the House? Has the President complied with the Appropriation Act? Though not a constitutional matter, but do we have a National Assembly Presidential Liaison Officer that is supposed to transmit Mr President’s correspondences to us? No.

    “If we act with emotion rather than in consonance with the provisions of the constitution, the effort can end up in futility because somebody can wake up one day and decide to challenge our action.

    “I raised an objection that the presentation could not hold yet because an agreement between the House leadership and the members on the eve of the passage of the 2013 budget was breached.

    “For instance, as contained in the 2013 Appropriation Act, the Securities and Exchange Commission (SEC) has zero allocation but the DG, Aruma Oteh, has been making expenditure in contravention of the Act. As we speak, Oteh is still the DG and spending money without appropriation.

    “That is another area of the breach of the Act by the Executive. So, it is not a personal matter but due diligence.”

    Saying that lawmakers should not be seen as condoning budget presentation as an annual ritual that stops after its dramatic presentation, Madaki urged his colleagues to remember that “any budget passed by the National Assembly becomes an Act that must be respected with all seriousness”.

  • Lagos assures on improvement of financial system

    Permanent Secretary of Lagos state Ministry of Economic Planning and Budget, Bayo Sodade, has said that the state will continue to improve on its financial management system.

    He stated this while answering questions from reporters at a three-day workshop organised by State Accountability and Voice Initiative (SAVI) for members and staff of Lagos State House of Assembly on MTFF/MTSS framework for the state which took place at Lekki recently.

    Sodade, who represented the state Commissioner of Economic Planning and Budget at the opening ceremony, said that the workshop was to improve on the skills and understanding of the state lawmakers on the budget process because the power of the purse belongs to the legislature.

    According to him, Medium Term Expenditure Framework (MTEF) and Medium Term Sector Strategy (MTSS) is a break from the past when emphasis was on yearly budget, “but now you go beyond one year to what can be done in the next five to twenty-five years.

    “In Lagos State the MTEF is based on three years rolling approach to financial management but we also have the Lagos state Development plan which is looking at long term perspective of financial management, so we are not even limiting ourselves to three years.”

    Fielding questions from reporters, the state Team Leader of SAVI, Felix Obanubi said MTEF and MTSS will help reduce abandonment of projects and produce a realisable budget.

    “The new framework will reduce loopholes, corruption and leakages in the system and ensure a realisable budget and enhance good governance and spread the dividends of democracy to the people,” Obanubi said.

     

  • Jonathan submits 2014-2016 MTEF, FSP to Senate

    Jonathan submits 2014-2016 MTEF, FSP to Senate

    PRESIDENT Goodluck Jonathan yesterday submitted the 2014-2016 Medium-Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP) to the Senate for consideration and approval.

    The MTEF/FSP was read by Senate President, David Mark.

    Jonathan in the letter to the Senate noted that the submission of the MTEF and FSP was in line with the provisions of the Fiscal Responsibility Act, 2007.

    He added that the development towards the preparation of the 2014 budget culminated in the 2014-2016 MTEF and FSP.

    Jonathan said: “Prepared against the backdrop of global economic uncertainty, the 2014-2016 MTEF and FSP reflect the reality of our circumstance; and we will ensure that planned spending is set at prudent and sustainable levels consistent with Government’s overall medium-term developmental objectives.”

    He lauded the Senate for the enduring partnership between the legislative and executive arms of government “in our collective efforts to transform the economy of our dear country.”

  • Jonathan presents 2013 budget today

    Jonathan presents 2013 budget today

    PRESIDENT Goodluck Jonathan is to present the 2013 budget to the joint session of the National Assembly today. This is coming six days after the initial scheduled date of October 4.

    The shift in date was agreed upon to allow the House of Representatives analyse the 2013-2015 Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP) in order to take a proper position on the projections and assumptions on which the 2013 budget was based.

    The presentation, which is slated for 10am, is coming on the heels of the simmering friction between the House and the Executive over the slow implementation of the 2012 budget.

    Also, the proposed $75 benchmark per barrel of crude in the 2013 budget, it is argued, would create a further ground for disagreement, as the House has underlined its resolve to jerk the figure by $5, raising the new benchmark for the 2013 appropriation to $80.

    The House agreed to admit the President into the Green Chamber via a joint sitting with the Senate, sequel to a motion by the House Leader, Mulikat Akande-Adeola, yesterday.

    On the eve of the budget presentation, the House yesterday admitted, debated and adopted the report of the Hon. Jubrin Abdulmumin Joint Committee on Finance, Legislative Budget & Research, National Planning & Economic Development, and Aids, Loans and Debt Management on the 2013-2015 MTEF and FSP.

    The Committee of Whole House adopted the recommendations of the report of the joint committee, wholesale.

    In the report, the lawmakers accused the Executive of overstating its expenditure profile and understating its revenue projection in an attempt to hoodwink the National Assembly.

    “It is observed that Non- debt recurrent expenditure of N2,411.486 trillion for 2013 is overstated by N166.695 billion in 2013 and N146.696 billion in each of 2014 and 2015. The projected capital spending of the Ministries, Departments and Agencies (MDAs) is also overstated by N20.0 billion in 2013, 2014 and 2015,” the adopted document alleged.

    The joint committee’s report covered most of the assumptions on which the President’s 2013-2015 MTEF and FSP is based, signalling that a re-enactment of the imbroglio that characterised the implementation of the 2012 budget may snowball into the 2013 budget as well.

    The lawmakers took on the Executive in the areas of debt profile/debt sustainability, budget deficit financing, projected revenue/aggregate expenditure (especially non-oil revenue projections) benchmark, daily production of crude oil and the Excess Crude Account

    The report observed that “Nigeria total external debt stock rose from an average of $3.639 billion in 2006-2008 to $6.0 billion in June 2012. Of this, the federal government’s share was $3.8 billion (68.3 percent) while the 36 states and FCT accounted for the balance of $2.2 billion (36.7 percent). Similarly, domestic debt for the same period stood at N6.15 trillion bringing the total debt to N7.11 trillion, which is 17 percent of GDP.

    “The increasing trend in total debt is increasingly becoming worrisome as it imposes a heavy burden on the government. This is against government’s position that the debt burden is sustainable, being below the international threshold of 40percent of GDP.”

    The Chairman of the joint committee Jubrin Abdulmumin while briefing the House at the committee of whole accused the Executive of lack of transparency in the preparation of the document, adding that the intent of those that prepared the document was meant to deceive the National Assembly.

    He said the argument of the Executive that an increase in benchmark is detrimental to the economy of the country and will cause inflation as well as put pressure on the exchange rate does not hold water.

    According to the committee’s report “many submissions from various government agencies were at variance with estimates in the 2013-2015 MTEF and FSP implying that the process of,preparation may not have been all inclusive as it ought to be in line with Section 13 (2 b) of the FRA 2007.’

    Abdulmumin said: “The MTEF is not a document of all inclusive consultation, a few people in the Ministry of Finance, the office of the DG Budget and a few personalities sat down and wrote the MTEF.”

    He further stated: “One of the biggest issues in the daily production of oil. For all the decades that we’ve been producing oil, no one knows the amount of our daily production. We asked the Governor of the Central Bank of Nigeria, he said he doesn’t know, the Mininstrymof a finance does not know and the NNPC does not know.

    “In this era of technological development, we don’t know the volume of oil we produce, what kind of country are we running?’

    The lawmaker told his colleagues that contrary to the usual impression given by the executive that oil accounts for 90 per cent of the nation’s income, “oil accounts for 68 per cent and non oil accounts for 32 per cent of our income. By 2015, non oil will be accounting for 50 per cent.”

    He said it was unacceptable that people will be using arguments of Foreign analyst who have no idea of the realities in the country to project the nation’s budget.

    “It is when some people claim a monopoly of of knowledge that we will have problems. If we take the assumptions in the MTEF presented by the President the way it is, we will continue to have problems. But if we want a different result from what obtained in 2011 and this year, we need to do things differently.

    “Why are they against an increase in the benchmark. They painted a gloomy picture in the MTEF. The MTEF took it to the extreme. But they will not tell you there is volatility in the Middle East and Sudan and that the American economy is improving and this drive up oil prices. It does not hold water for them to say there is crisis in the Euro zone”, he said.

     

    Some of the key recommendations

    • The revenue target of the Nigeria Customs Service should be increased to N1, 018 trillion, N1,155.700 trillion and N1,388.345 trillion in 2013, 2014 and 2015.

    • Accruals for the sharing of the Stabilisation Fund Account (ECA) should be estimated, as the Fiscal Strategy Paper (FSP) did not project the medium Term accruals.

    • The sustenance of peace in the Niger Delta should be given priority, attention and prominence, in order to guarantee uninterrupted production of crude oil

    • Government should demonstrate fiscal discipline by limiting spending to the level of its resources. The proposed deficit of N1, 037.19 trillion should be further reduced to N663.328 billion by using the earnings resulting from the increase in the crude oil benchmark, privatisation proceeds and Nigeria Customs Service. This should reduce domestic borrowing from the proposed N727.19 billion to N243.33 billion.