Economic Confidential, May 2008

Delayed Budget Blues: Matters Arising

By Kayode Odunaro

When President Umaru Yar’Adua presented the 2008 Appropriation Bill (2008 Budget) to the National Assembly (NASS) early November 2007, there was much expectation of quick passage of the bill into law. The expectation was premised on the cordial relations between the Executive and the Legislature since the beginning of a new administration on May, 2007. Also the National Assembly made promises of early passage of the Bill into law with the House of Representatives under the newly elected leadership of Rt. Hon. Dimeji Bankole denying itself some of the goodies of the Yuletide.

But nothing of such happened, rather the 2008 Budget is over three months late in coming into effect .It was only signed into law on April14. Not only was it coming into effect as law late, it also threw up issues that one think the public should be well educated on as it strikes at deepening our democracy as well as ensuring overall development for our people. How did we get to a stage that a hitherto cordial relations between the Executive and the Legislature almost degenerated to confrontation on the issues of the budget?

Of course the deleterious effects of the delayed budget on the economy are well known in our economy where government spending drives a preponderance of various sectors. On a personal note, the delayed budget this public officer in a big ways as I have had to serve the nation through the Speaker of the House of Representatives on a limb. There was no official accommodation, official car and other prerequisites of the office. And for three months no compensation or alternative arrangements were in the offing. Picture an adviser to No. 4 citizens jumping from a “kabu kabu” (hired) car to another and you will get the personal angle of the delayed 2008 Budget. But as Hon. Bankole always admonish to us his aides, sacrifices has to be made to get things done right as a foundation for cleaning the Augean stable of Nigerian despoiled tapestry.

But what were the issues that led to the delay in passage of the Budget? One notes that shortly before the passage of the budget, attempts were made to ease the blame for the delayed budget on the National Assembly and quite regrettably some columnist and other opinion molders and stakeholders have latched on the unofficially adduced reasons form ‘sources’ within the Executive to disparage the National Assembly. Some have gone as far as attributing selfish reasons for the ‘recalcitrance’ of the National Assembly in not know-towing to the Executive blue print. This is quite regrettable as that position is not only uninformed on the democratic tenet of separation of powers  but also reflect a hangover from our best forgotten military dictatorship era where the executive wax lyrical and  strong at the expense of the other democratic institutions of a democracy- the legislature and the judiciary.

To start with the 1999 constitution that guides our democracy specifically rest the power of appropriation on the National Assembly. Sections 80-82 are very clear on this and the part of the executive in the process of enacting an Appropriation Act. The executive present, “estimates of revenues and expenditure” in form of a bill to legislature for passage into an Act. In a layman understanding estimates are projections that are not static and the appropriating body realistically (theoretically) have the powers to vary estimates positively or negatively. In exercising it constitutionally vested role, the National Assembly increased the Budget of N2.4 trillion presented by the President to N2.9 trillion. That and other issues led to the initial disagreement as the passed budget by NASS was returned to them with some “observations” bothering on the increase and “clauses” aimed at monitoring and tracking the budget.

Were NASS justified in increasing the budget and were the increase selfish as some are pontificating? The major increases were in the estimates of Ministries, Departments and Agencies, MDAs for more projects as well as constituency projects and recurrent expenditure for National Assembly. Well it is usual for MDAs in their budget defence preparatory to passage of an Act to ask for increases in funding for projects which are sited in various constituencies of members of NASS. And as true representatives, it is expected that such requests are acceded to by an appropriating body. Similar argument goes for constituency projects which quite to the contrary believe of many uninformed are to be executed by the Executive and not NASS. NASS role is only to identify and make appropriation for needed projects which are mostly Millennium Development Goals, MDGs (health, education, water etc) projects.

The supporting argument against increases in the estimates is the problem of deficit. Proponents have wondered aloud where the money to finance these increases is going to come from and the fact that the end result will be huge deficit. Quite right but deficit as most economists will agree is not in itself a bad thing. It is the end to which it is incurred that determine its desirability or otherwise. It must be noted that most developed countries economies run on huge yearly deficits. If for instance we incurred huge deficit in fixing our roads or power sector, the negative effects can be ameliorated by the gains of these sector overtime. Of course, as we all know our overall economic outlook would have been positively different today if huge funds appropriated for the power sector reforms are deficit budget that have been well utilized.

The other area of disagreement that was used to input selfishness on NASS was the increase in recurrent expenditure. There is nothing un-altruistic about this but the increases were informed by new reality and a determination of doing the right things. For instance, Hon. Bankole led House of Representatives has set for itself a more pro-active fulfillment of its law-making and oversight functions. This requires huge funding to prevent such ‘scandal’ as is presently playing out in the N300 million unspent budget fund from 2007. The House of Representatives, under Bankole properly funded intends to carry out its oversight functions without any compromising handouts from MDAs thus the need for more fund and the introduction of clauses to assist periodic oversight.

There is also the issue of capacity building which is related to the scandal above. With less than 20% members being returnee legislators at the national level, there is need for rigorous training in the intricacies of law-making, oversight and representations. For durable laws to be enacted, the enactors have to have a fairly good idea of what they are legislating on to make informed contributions. The issue of ‘benchmark’ has been over flogged. But suffice to say that the upper limit fixed by NASS is for below the current price of crude and the situation is possibly going to remain same in spite of an incipient recession in the USA economy.

On a optimistic he note, it is hope that while the Executive and the Legislature can and should disagree on issues and programmes for the benefit of the people, the era of confrontation between the Executives and the Legislature is over and done with. President Yar’Adua has shown enough openness and willingness to cooperate for the good of all as witnessed in the handling of “16 secret accounts” not captured by the 2008 Budget and the House of Representatives discovered N450 billion unspent funds from 2007 budget, all of which accounted for the initial delay in the process of passage of the budget. NASS is willing to reciprocate the spirit of openness and cooperation. The president should only watch out for some officials in his Executive pursuing personal agenda with sponsored confrontational stories against NASS. Rightly dialogue and consensus triumphed over personal agenda. The 2008 Appropriation Act is now a law and as agreed between the Executive and the Legislature amendments to the law on any areas of disagreement can come to NASS as applicable to any other law in addition to the constitutionally guaranteed supplementary appropriation bill.

Chief Kayode Odunaro

Special Adviser (Communications) to the Hon. Speaker House of Representatives