The Rot in 2016 Budget

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Udoma Udo Udoma

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The confusion over the 2016 budget is causing anxiety in many quarters, especially as all the sectors seem to have been rubbished by attempted fraud through official padding of the budget by government officials

| By Olu Ojewale | Feb 22, 2016 @ 01:00 GMT |

THE news was not pleasant to ears. The delay in the passing of the 2016 budget means a lot of economic decisions will have to wait. This compounds the economic woes of Nigeria as the National Assembly decide to suspend indefinitely its earlier decision to pass the 2016 budget by February 25 because of the rot in it

Danjuma Goje and Abdul Mummun Jibrin, chairmen of the appropriation committees of the Senate and House of Representatives, made the announcement at a joint press conference at the National Assembly, on Tuesday, February 9, saying that the February 25 date was no longer feasible on account of the increasing contradictions in the budget figures.

Goje, who presided over the press conference, said: “We designed a timetable for the consideration and passage of the budget and in that particular timetable we had said that we will pass the budget on February 25, 2016, but as you are all aware, a lot of issues have come up and sadly so. Again during the budget defence a lot of issues based on padding from over-bloated overhead and in some instances over-bloated personnel cost. But generally there has been a lot of issues. So in summary, the timetable for the passage of the budget is no longer realistic because as appropriation committees of both chambers of the National Assembly we need additional time to be able to do a thorough job for the 2016 budget.”

Nevertheless, looking critically into the reasons given by the National Assembly for its decision to suspend the passage of the 2016 budget one cannot but support its decision. The budget has been mired in various allegations of fraudulent, controversial and embarrassing allocations.

About four weeks ago, the document was declared “missing” at the National Assembly. Having resolved that, the allegations of unimaginable figures quoted for ministries, departments and agencies as well as for projects and services surfaced thereby creating integrity problems for the budget and government of President Muhammadu Buhari. As if that was not bad enough, some government officials while attending budget briefing at the National Assembly could not march their proposed spending to their projects and activities of their respective agencies.

For instance, a lot of Nigerians were aghast when it was revealed that the budget proposal for the State House Clinic alone would be given N3.219 billion, an amount said to be more than 700 million more than capital allocation to all the 16 federal teaching hospitals put together.

Jalal Arabi, permanent secretary, State House, who defended the State House budget of N18.1 billion, told the joint National Assembly committees the N3.219 billion proposed was meant for the completion of ongoing projects as well as procurement of drugs and other medical equipment. Arabi said: “the medical centre provides health care treatment for the president and vice president, their families as well as numerous civil servants working in the State House and across the ministries.”

Also on Tuesday, February 9, the Senate Committee on Gas Resources rejected the N200 million allocation demanded by the federal ministry of petroleum resources in the budget for the treatment of Petroleum Industry Bill, PIB, and another N200 million for a review of Nigeria Gas Master Plan. Jamila Shuaru, permanent secretary, at the petroleum resources ministry, had insisted that the N200 million was needed for the treatment of the petroleum bill.

But Bassey Albert Akpan, chairman of the Senate committee, backed by other members, said the allocation was not necessary because the bill was already with the National Assembly. “This bill is already with the National Assembly. So what do we need the money for? I don’t think you need the money. This could be one of the reasons we have so much deficit in this year’s budget. Unless you can justify this expenditure, we need to do away with this,” Albert said.

The committee chairman’s remark was supported by members. The committee also disagreed with the ministry officials over the N200 million proposed in the budget for a review of Nigerian Gas Master Plan, saying that the funding request had been a recurring figure in previous budgets. “You cannot be asking for funds to review what you have not even implemented,” Albert said, adding that the only problem with the PIB was that there was no law backing it up.

Goje
Goje

Earlier, on Monday, February 8, Isaac Adewole, minister of Health, disowned outright his ministry’s budget when he appeared before the National Assembly, alleging that ‘rats’ had doctored the proposal. Adewole said the provisions of the budget before the National Assembly were in contrast to the priorities of the health sector as contained in the original budget by his ministry. He alleged that some of the votes earmarked by the ministry for some activities had been re-distributed while some important fields in the sector had been excluded.

“We have to look into the details of the budget and re-submit it to the committee. This was not what we submitted. We’ll submit another one. We don’t want anything foreign to creep into that budget. What we submitted is not there,” the minister told the committee on health sector.

Last week, permanent secretaries were embarrassingly grilled by members of the National Assembly over alleged padding of budgets of some ministries and agencies. The Senate had then discovered, in one case, a sum of N10 billion being questionably smuggled into the budget of the ministry of education without a proper subhead. The allocation also covered street light, generators and other items but locations of projects were not provided.

Since last week, federal lawmakers in both Houses of the National Assembly have showed disappointment over the mess surrounding the budget, saying it was short of expectation of the anti-corruption crusade of the government. But the Presidency has tactically distanced the president and political office holders from the mess, blaming the confusion on top civil servants who prepared the budget document instead.

Even Udo Udoma, minister of National Planning, has refused to grant a media audience on the matter, but only promised that things were being sorted out. The ministry of budget and national planning, however, on Tuesday, February 9, admitted that there were errors in the 2016 budget, blaming the development on the adoption of the Zero-Based Budgeting System.

A statement by signed by Charles Dafe, director of Information in the ministry, said that while the budget presented to the National Assembly by President Buhari was well structured and targeted at reviving the economy, those responsible for budgeting at the various ministries, departments and agencies of government were still grappling with some of the technicalities used in the fiscal document.

According to Dafe, the Zero-Based Budgeting approach is a system of budgeting that reverses the working process of traditional budgeting by ensuring that all expenses must be justified in the new period. The method, he said, was different from the now common envelope system in the civil service, which was introduced by the federal government in 2003 and works by providing each MDA with a maximum amount for its capital and recurrent needs for the fiscal year.

The ministry’s spokesman said that as the country moves away from the envelope system, the ministry would improve on the competency of the ZBB. He said the errors occurred because “those handling budget issues in all ministries and extra-ministerial agencies are grappling to master the technicalities in the ZBB template. As such, therefore, some errors are not unexpected in the changeover to the new ZBB approach.”

Dafe said that was the reason the ministry arranged for the proposals to be placed on the website of the ministry of Budget and National Planning for public scrutiny. While assuring Nigerians that the ministry would liaise with the National Assembly to address issues raised in the budget, he also promised that the government would thoroughly investigate and sanction anyone found to have been involved in any fraudulent activity as regards the budget. “The ministry has zero tolerance for malfeasance and whenever any wrongdoing is alleged, it will be thoroughly investigated and sanctions will be applied,” he said.

That notwithstanding, the suspicion created by the budget confusion doesn’t seem to have the support of many Nigerians who insisted that the government should have been more careful in handling the issue.

The Catholic Secretariat of Nigeria said the confusion had shown that nothing has changed. Evaritus Bassey, a reverend father and executive secretary of the catholic Secretariat of Nigeria, in a statement signed on behalf of the secretariat, said: “It is amazing that in spite of the seriousness, which the president has shown towards the fight against corruption, the first budget of this government is showing such terrible mainstreaming of corruption.

“With duplicated, repeated and carryover figures, sometimes for projects that have already been executed, the customary tendency would then be for officials to invent the means to retire these monies when they are finally appropriated, usually through a give and take process between relevant parliament officials and ministry officials.” He, therefore, called on members of the National Assembly to ensure probity and accountability in handling the budget.

Governor Ayodele Fayose of Ekiti State, on his part, asked Buhari to save the country from national embarrassment being caused by the 2016 budget by formally withdrawing it and representing it. Fayose, in a statement issued by his spokesman, said: “If under a President that says he is fighting corruption, the budget of the country got missing and we are now being told that the budget being considered by the National Assembly has been forged, one cannot but be afraid that there is possibility of Nigeria being forged one day, after the original must have gone missing.”

On his part, Abdulmumin, chairman of the House on appropriation committee, said that the two committees of both legislative chambers would have to do a proper clean-up of the budget. He said: “So we can pass a budget that is implementable and be also acceptable to Nigerians. It is no longer realistic because we need sufficient time to pass a comprehensive budget. “The President is an individual, the budget runs in thousands of pages, the President will not be able to go through it page by page.”

In any case, Oreoluwa Runsewe, a public commentator, said the budget controversy had called Buhari’s competence and credibility into question.

Runsewe said it was disheartening to hear that Aso Rock clinic would receive more allocation than the federal hospitals in the rest of the country, “which means the president’s inner caucus is not excused from blame.”

He then argued: “If Buhari claims non-complicity in the inconsistencies in the budget, perhaps he should sack everyone working with him in the State house…

“To many, President Buhari has become some sort of anti-corruption ‘punisher’ since his inauguration. Are these present budget revelations a result of the transparency promised by the reformed democrat, exposing the still corrupt officials scattered in Nigeria’s public system, the ones he didn’t know about? Or have Nigerians just been pawned? It is yet to be seen how President Buhari will redeem his image in the eyes of Nigerians, because, despite his stance on corruption, it appears that Nigerians have been sold dreams.”

For Nnimmo Bassey, a human rights activist, the National Assembly should be applauded for its vigilance and thoroughness in discovering the anomalies. Bassey said the nation would be interested in the breakdown of how the Petroleum ministry would spend the N200 million earmarked for the PIB.

On power, the activist noted that the power distribution aspects of the defunct Power Holding Company of Nigeria, PHCN, had been privatised and handed over to companies that recently increased electricity tariff before providing commensurate services. “The question needs to be asked why there should be a budgetary provision of N397m for purchase of 75 pieces of 500 KVA transformers for Abuja and four States?

“There are three other lines for procurement and installation of transformers for other locations at N262,414,132, N20,683,949 and N250,401,152. If privatisation means that the distribution sub-sector of the defunct PHCN was taken over by private investors, why is the government still buying and installing transformers?” he asked.

Adewole
Adewole

He, similarly, queried why N1 billion was budgeted for generation of 10MW of electricity at the Katsina Wind Farm, while it was on record that farm had been fully paid for in the past.

Another concern of Bassey was on environment for which he questioned the commitment of the federal government considering the level of pollution in the Niger Delta.

“Considering the level of pollution in the oil fields and the handicap of the National Oil Spill Detection and Response Agency, NOSDRA, in terms of facilities one would have expected this agency to be well resourced. A well equipped NOSDRA would be better positioned to independently detect and respond to oil spills rather than depending on the oil companies that may actually be the offenders.

“There is nothing in the budget submission for vital equipment such as boats or helicopters that could facilitate monitoring in the creeks as well as offshore. We recommend that the NASS trims down the huge departmental subheads and properly equip this agency and others that are sorely needed to curtail reckless pollution and degradation of our environment,” Bassey said in a statement.

Also lending voice to the critique of the 2016 budget, The Punch editorial entitled: ‘2016 Budget Is An Untidy Mess’ of Monday, February 8, expressed disappointment that a government on a change mantra could allow such muddle.

It said: “Terribly poor, fraud-prevalent budgets have been our lot these past 16 years. Buhari disappoints by allowing the bureaucrats to continue the rip-off. He should knock heads, not only to punish culprits for tainting his reputation, but especially to put a final end to the travesty…

“We insist that only fraud and intent to defraud by bureaucrats can explain how money is voted every year for kitchen/canteen equipment, computers and accessories, vehicles, renovation of buildings and clinic equipment. No sane person replaces his kitchen equipment or computers yearly. The fatal flaw in our public governance is the propensity of officials to wallow in the highest levels of opulence in the midst of mass poverty and unemployment. Some 27 state governments are struggling to pay salaries, millions are unemployed, basic social services are mostly absent, while the budget is padded with irrelevance and waste. Yet, many in government cannot rein in spending, waste or make sacrifices. It is unacceptable.”

It also called on Buhari to cut cost by drastically reducing the presidential air fleet of 10 planes to two, adding that: “He should start by taking a pruning knife to this embarrassing budget.”

Similarly, Joseph Oyediran-Remi, director at Goldalmin, said he was disappointed that with the likes of Kemi Adeosun, a renowned chartered accountant in government, the kind of fraud in the 2016 budget would be allowed to creep in. Oyediran-Remi said: “How can so many scams be present in the 2016 budget with all the chartered accountants we have in the ministry of finance and ministry of Budget and Planning? Father God have mercy on Nigeria! President Buhari must jail the crooks!
“I don’t know about you but I know that I am sick and tired of reading about scams in Nigeria. Isn’t there any dignity in labour, hard work, honesty and integrity anymore?
“Why are public office holders in Nigeria so passionate and crazy about amassing money and wealth?” he asked.

But the fear being expressed by Nigerians is that as long as the budget is delayed, so is the economy going down the drain. The masses for which the budget is meant to alleviate problems will continue to feel the bruise while Nigerians officials continue to enjoy their regular allocations, salaries and emoluments.

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