April 20, 2010

Why assent to 2010 budget delayed

By Daniel Idonor

ABUJA—THERE were strong indications that there are no immediate plans by the Acting President, Dr Goodluck Jonathan, to sign into law the 2010 Appropriation Act recently passed by the National Assembly and sent to the presidency for assent.

This is because of what officials say are sharp but critical alteration orchestrated by the National Assembly as noticed by Aso Rock, which has led to the inability of the Presidency to come to terms with the widespread anomalies and changes discovered in the fiscal document.

As a result, unless ongoing talks by stakeholders yield positive results, it might just be concluded that the 2010 budget is on its way back to the National Assembly, where the “unacceptable changes” in the document were traceable to.

Investigations by Vanguard revealed that there were a whole lot of grey areas in the budget which has resulted into sharp disagreement between the executive and legislative arms of government and despite the series of closed door meetings going on there appears not to be a common ground.

‘Unacceptable changes’

For instance, it was gathered that some key projects which contracts have been duly approved by the Board of Public Procurement, BPP, as meeting due process requirement, and awarded by the Executive Council of the Federation, EXCOF, were erroneously removed from the budget, without notice to the affected ministries, a development that place the Federal Government in dilemma.

This indication emerged, yesterday, in Aso Rock after one of such inclusive meetings on the budget, which was convened by the Acting President, with the key actors on the executive side in attendance.

They include the Ministers of Finance, Dr Olusegun Aganga; his State counterpart, Mr Remi Babalola; Head of Service of the Federation, Mr. Steve Oronsaye; Director-General of the BPP, Engr. Emeka Eze; Director-General of the Budget Office, Mr Okuogo, among others.

It was further leant that another round of meeting has been scheduled for today in the office of the Acting President as part of deliberate efforts to strike a balance between the two arms of government, even as it was discovered that the alleged offences in the budget cannot be swept under the carpet.

Budget ‘ll be signed soon, says Aganga

However, the new Minister of Finance, Dr. Olusegun Aganga, who rose from a crucial meeting on the controversial Appropriation Act told Vanguard that the Acting President would sign it into law very soon.

Also speaking with Vanguard, the Minister of State for Finance, Mr Remi Babalola, insisted that unless the series of meetings currently going on were concluded, the much anticipated presidential assent cannot be guaranteed.

Asked if there is the possibility of the Budget being signed this week, Mr Babalola said, “maybe this week, maybe not,” adding that “this would certainly be determined by the outcome of the meetings that are planned for this week.”

Budget analysis

President Umaru Yar’Adua, through the Special Adviser to the President on National Assembly Matters, Senator Mohammed Abba Aji, in the company of the Special Assistant to the President (Senate) Dr. Cairo Ojougboh, had on 24 November 2009, presented a budget proposal of N4.07 trillion for the 2010 fiscal year to the National Assembly.

However, it was not passed until after four months, on 24 March 2010. Then the planned spending for this year was raised to around N4.3 trillion ($30 billion) from an initial N4.079 trillion by the federal lawmakers without recourse to its workability.

The National Assembly had passed a budget of N4,608, 616,278,213 of which N180, 279,158,994 is for statutory transfer, while N497,071, 797,452 is earmarked for debt service. N2,077,358,560,347 is for recurrent expenditure and N1,853,906,761,420 is for contribution to the development fund for capital expenditure for the year ending 31 December 2010.

The budget is based on the projection of $67 per barrel benchmark oil price and crude oil production of 2.350 million barrels per day. The Joint Venture cash call projection is $7 billion, GDP of 5.47%, inflation rate of 11.2% and the exchange rate of N150 to a US Dollar.

The budget had a total additions and adjustments, by the executive, in the sum of N336 billion, showing a rise of executive proposals of the budget from N4,079 trillion to N4,415 trillion.

There were reports, 16 April 2010, that the Nigerian Senate has detected a number of additions to projects and allocations in the budget submitted by the executive to the National Assembly, without the knowledge of the ministries concerned.

Great expetations

“The purpose of the 2010 budget is to accelerate economic recovery through targeted fiscal interventions intended to further stimulate the economy and support private sector growth,” the Presidency said in a budget statement presented to the lawmakers.

The statement said N1.37 trillion was budgeted for capital expenditure and N2.011 trillion for recurrent, non-debt expenditure. The spending plans for the country, which vies with Angola as Africa’s biggest oil producer, assume oil output of 2.088 million barrels per day (bpd), a benchmark oil price of $57 and an exchange rate of N150 to the U.S. dollar.

The Presidency said improving power infrastructure was a top priority and that Nigeria aimed to double electricity capacity to 10,000 megawatts (Mw) by the end of 2011. Intermittent power supply is seen as a major blow on economic growth.

It was learnt that the utilisation of budgetary allocations for 2009 had been “below expectations”, raising questions about how effectively government would spend the additional funds.

In the original document presented to NASS, out of the N4.07 trillion budgetary proposed expenditure for 2010, N1.37 trillion is earmarked for capital expenditure, N2.011 trillion is proposed as recurrent expenditure, N517.071 billion is proposed for debt servicing and N180 billion is allotted for statutory transfers.

Among the beneficiaries of the statutory (first line charge) are the Niger Delta Development Commission, NDDC, N35.6 billion, the National Judicial Council, N91 billion and Universal Basic Education, N44.3 billion.