Despite the passage of this year’s appropriation bill on April 9, President Goodluck Jonathan appears reluctant to sign it into law because of noticeable distortions by federal lawmakers
| By Vincent Nzemeke & Anayo Ezukwu | May 26, 2014 @ 01:00 GMT
FIVE months into 2014, the federal government is still operating without a budget. The development is not surprising. Right from the beginning, the signs were there that the annual budget would be delayed. Its presentation before the National Assembly suffered setbacks several times because of logistics and disagreement over crude oil benchmark between the Senate and the House of Representatives.
The presentation which was originally scheduled for November 12, 2013 was rescheduled for November 19 by President Jonathan due to circumstances beyond his control. He requested the National Assembly to shift the meeting and his request was granted by both chambers. But the president failed to show up again on that day. This time, he cited the inability of the two arms of the National Assembly to reach an agreement on the benchmark price for oil revenue for next year as contained in the Medium Term Expenditure Framework, MTEF, as his reason for not showing up.
The president explained his absence thus: “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 honourable 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.”
But unlike what happened on the previous occasions, Jonathan’s second excuse did not go down well with certain lawmakers from the Senate and the House. As this happened at a time when the country’s political atmosphere was charged, some lawmakers read political meanings into the excuse. They alleged that contrary to the MTEF issue, the real reason why Jonathan did not come was because of the crisis rocking the ruling Peoples Democratic Party, PDP. They said he was trying to avoid an embarrassing reception from some aggrieved lawmakers, especially those loyal to the Kawu Baraje-led faction of the party.
However, the lawmakers got over their disagreement to peg the crude oil benchmark at $77.5, thus paving the way for the executive arm of the government to present the 2014 budget to them. Again, the lawmakers expected Jonathan to present the budget himself, but the president delegated Ngozi Okonjo-Iweala, minister of finance and supervising minister for the economy, to stand in for him. Okonjo-Iweala was accompanied by Bright Okogu, director-general of the budget office and some of her colleagues in the cabinet.
After the passage of the Bill by the Senate on April 9, David Mark, Senate president, appealed the executive arm of the government to ensure efficient and effective implementation of the budget. But more than one month after, the 2014 budget still remains an ordinary document awaiting presidential assent. Labaran Maku, minister of information, on Wednesday, May 14, attributed the delay in the signing of the budget by President Jonathan to some distortions made by the National Assembly on the appropriation bill sent to him. He said the distortions were made in areas which he described as very serious, hence the need for the executive to look into them to avoid their possible negative impacts on the implementation of the budget.
Maku said it was very sad that almost in the middle of the year, the federal government was operating without a budget. He added that as part of efforts to reconcile the differences in the proposed Bill and the document passed into law, the ministry of finance is currently meeting with members of the National Assembly. The minister expressed optimism that the reconciliation would soon be concluded.
“The minister of finance briefed us at the Federal Executive Council, FEC, relating to the progress on the budget. It is very sad that we have almost entered the middle of the year and we don’t have a budget. This, indeed, is sad that the budget has taken so long in coming and practically we have less than seven months to execute the budget. We will do everything possible to reconcile the few differences that emerged in what was transmitted to the government by the National Assembly.
“There are few areas of distortions and there are those areas that are very serious and we think there is a need to look into them because of the negative impact those distortions may have on the implementation of the budget. There is a lot of conversation going on now between the federal ministry of finance and the National Assembly on these issues. And very shortly, we believe that we are going to reconcile those areas and then the final budget will be announced to the nation by the president,” he said.
This development has generated mixed reactions from various quarters with many analysts saying it would be difficult for the budget to be implemented let alone addressing the challenges it was meant to address. In a recent report, Augusto & Co, a renowned rating agency, said in view of the delay, the 2014 budget had lost out valuable implementation time like previous budgets. In its report which was titled: “Can Budget 2014 Correct Nigeria’s Jobless Growth?” the agency wondered if all the set goals of the budget could be achieved before the end of the year.
“If Nigeria’s fiscal budget was an item on the shelf of a mart, it would probably have a reading on the package—‘best before: 31-Dec-2014. Even after a month of passing the 2014 appropriation bill, the budget is yet to become an Act of Parliament; because it awaits presidential assent.”
The firm also expressed concern that its process did not consolidate on some of the successes of budget 2013 especially on timeliness. It pointed out that the “first fundamental drawback of budget 2014 is the undue delay of the process,” adding that “at current progress levels, we fear that budget 2014 could become a half year budget.”
According to the agency, the other significant drawback to the proposed 2014 budget is the increase in recurrent expenditure, which it noted, crossed the 70 percent threshold after dropping to 67.5 per cent the previous year. Furthermore, it pointed out that the document reflects the dire need to diversify government’s income.
“Government revenue in Budget 2014 is expected to drop by six per cent from 2013 due to factors such as the depletion of the excess crude account, ECA, and the uncertainty around Nigeria’s crude oil supplies. The ECA recorded a year-on-year decline of about 80 percent to $2.07 billion in February 2014 from $10.42 billion in February 2013. Rising oil output from producers such as Canada, the anticipated increase in output from South-east Asia as well as the growth in shale oil production by Nigeria’s former major oil consumer, the United States, is expected to change the market dynamics of crude oil.
“At the same time, generous tax waivers have led to a fall in corporate taxes, customs and excise duties accruable to the government. These developments further highlight the need for government to diversify income streams beyond crude oil earnings and exploit other burgeoning sectors as reflected by the rebased GDP figures,” it stated.
Some individuals are also worried about the delay in the implementation of the 2014 budget. An immigration officer, who did not want his name mentioned for fear of retribution, said the delay in the implementation of the budget has contributed to the growing problem of insecurity in the country. “This is May 2014 and they have not released money that should be spent before the year runs out. How can we buy the equipment we need to fight terrorism? I think the government must take the case of budget implementation very seriously.”
The question remains: For how long will the nation have to wait for the budget to be signed into law? But in the meantime, doing business in Nigeria without a budget is gradually becoming a culture.