The National Assembly has dashed hopes of an early passage of the 2015 budget as it adjourned till February 17.
Members, who returned to the two chambers of the assembly on Wednesday after Christmas and New Year holidays okayed the second reading of N4.36tn in their respective chambers but referred further deliberations on it to their committees on Finance and Appropriations.
Shortly after giving the task to the committees, the Deputy Senate President, Ike Ekweremadu, and the Speaker of the House of Representatives, Aminu Tambuwal, adjourned.
The action, it was learnt, was to enable members to go to their respective states to galvanise support for respective political parties ahead of the February 14 presidential election.
In the House where the action was first taken, members resolved that their Joint Committee on Appropriations/Finance should invite the Minister of Finance, Ngozi Okonjo-Iweala, and the Director-General of the Budget Office of the Federation, Bright Okogu, for discussion on a realistic oil benchmark for the budget.
The Committee on Appropriations is chaired by a Peoples Democratic Party lawmaker, John Enoh, while an All Progressives Congress member, Abdulmumin Jibrin, heads the Committee on Finance.
They collectively agreed that plummeting oil prices could only mean a slash in the Federal Government proposed benchmark of $65 per barrel of crude.
President Goodluck Jonathan officially submitted $65 per barrel as the oil benchmark for the budget on December 17.
The $65 was a cut down from the $78 he initially proposed for the budget in the first Medium Term Expenditure Framework sent to the National Assembly for 2015-2017.
But, between December 17 and Wednesday, global oil prices further crashed to around $46, causing anxiety in oil dependent countries, including Nigeria.
The atmosphere in the chamber on Wednesday was devoid of the usual tension and rowdiness associated with budget debates in the recent past.
The passage of the budget for second reading received a unanimous voice vote at the session, which was presided over by the Speaker, Mr. Aminu Tambuwal.
House Majority Leader, Mulikat Akande-Adeola, who led the debate, said the budget had a provision of N387.1bn for capital expenditure and N2.6tn for recurrent expenditure.
She added that N411.8bn was budgeted for statutory transfers and N943bn for debt servicing.
Earlier, members observed that government did not do enough to diversify the economy.
Abimbola Daramola said, “They should have done a good homework because annual budgets should not be omnibus replication of previous ones.”
Two other lawmakers, Joseph Kigbu and Ndudi Elumelu, suggested that the capital expenditure should have been further slashed since government might not be able to raise adequate money to fund projects in 2015.
A member from Borno State, Mr. Mohammed Monguno, could not agree less, saying, “The Federal Government has been professing the diversification of the economy but this is not reflected in the appropriation.
“With the discovery of shale oil and the falling price of crude oil, there is a need to diversify the economy.”
Tambuwal clarified that while the plenary stood adjourned, various House committees would call meetings with Ministries, Departments and Agencies of government for defence of their budget proposals.
Before the Senate also adjourned, members lamented gross fiscal indiscipline by MDAs and vowed to carry out necessary legislative activities to check them in the current fiscal year.
They also noted, among others, the sharing of billions of dollars in the Excess Crude Account without the authorisation of the National Assembly and the illegal spending of revenues generated by the MDAs as some of the Executive excesses that must be curtailed.
The senators therefore resolved to ensure that all revenues accruable to the federal agencies were captured and appropriated by the National Assembly.
The Chairman, Senate Committee on Finance, Senator Ahmed Makarfi, in his contribution, stressed the need for caution in the treatment of the budget since no appropriation could be done without first determining allocations to various sectors.
He said, “The budget cannot be looked at in a hurry. This is an austerity period. Money should be generated. We also need to cut down on cost of governance by blocking leakages.
“We need to review the earnings and spending of the MDAs while taking into cognisance, the fact that the exchange rate of N165 to a dollar and the oil benchmark of $65 per barrel, are no longer realistic.”
Senator Abdul Ningi,who described the 2015 appropriation bill as a budget of caution told his colleagues that the vote for capital expenditure was less than 10 per cent.
Decrying the lack of information on the implementation of the 2014 budget, Ningi suggested the continued implementation of the 2014 budget till March 2015.
He also asked his colleagues to caution the appropriation committee against tinkering with the proposals of the MDAs which had been worked on by relevant Senate committees.
Senator Ayogu Eze suggested the expansion of the revenue base of the economy by putting it on a solid footing.
He also suggested the revisiting of the National Development Plans but faulted the allocation of N2.3tn to recurrent expenditure and N387bn for capital projects.
Senator Issa Galaudu noted that there had been excesses in the nation’s oil revenue since 2011 and wondered where the Executive put the funds in the excess crude account.
Also, Senator Olubunmi Adetunmbi expressed fears that the country might not be able to fund the budget since “the estimates which are based on $65 per barrel are now unrealistic.”
He added, “I don’t know the empirical bases upon which the projections were made in terms of oil production and revenue. It is a deficit budget because there won’t be any money to fund capital projects or the recurrent expenditure.
“The budget is unrealistic. We should allow the Federal Government to review the oil revenue projection and benchmark based on the reality on the ground.”
Another lawmaker, Ita Enang, said there was no point allowing the Central Bank of Nigeria, the maritime agency and the National Communications Commission to generate and spend money without transferring it to the Federation Account.
He said, “I am celebrating the fall of oil so that we can go back and see the amount generated by these agencies. This will enable us to determine the 20 per cent they should spend and the 80 per cent they should transmit to the Federation Account.
“How do countries that do not produce oil survive? It is through money they generate internally. Where is the ECA? The benchmark was $73 per barrel but oil sold for over $100 per barrel. Where is the excess crude share of the Federal Government?
“We are guilty because I had advised that no money from the ECA should be expended without the consent of the National Assembly. My submission is that since we signed the 2014 Appropriation Act, there has not been application for supplementary budget.
“The President should therefore fund the 2015 budget with the reserve in the ECA. The prices of petroleum products should be reviewed downward so that labour unions would not go on strike over the issue.”
Senator Victor Lar also said that the 2015 budget estimates were unrealistic because they lacked a basic scientific approach.
He said, “The recurrent expenditure is bloated. Any oil benchmark outside of $30 to $35 is unrealistic. The budget must be further cut down by 100 per cent. Revenue from other sources can fund the budget. Various public officers must make sacrifices by cutting cost of governance.”
Ekweremadu, who presided over the session, said the National Assembly would lead the fight against fiscal indiscipline.
He said, “I do believe that this is the time for us as Parliamentarians to ensure that while considering the 2015 appropriation bill , all the revenue items are captured. Our Committee on Finance will help us to do that.
“We need to ensure that all the revenue items are captured in the budget and determine a pool of resources to implement the budget when passed.
“The Federal Government should also put on a thinking cap to be able to develop new areas of revenue generation that would help us to drive our economy. We have gone through this way before but eventually the oil price improved but unfortunately we did not learn any lesson while we enjoyed the oil boom.
“I hope that this period, we will learn a lesson that will help us to be disciplined in our fiscal management. It is also time for us to think seriously about our fiscal federalism so that states can adopt initiatives for increasing their revenue bases.
“For us as politicians, we have to be mindful of our election expenses and we need to do things within the provisions of the Electoral Act.
“If anybody thinks that he will spend money and would recover them after election,he will be disappointed because there would be no money to recover.
“A country like Norway also produces oil but at no time had they predicated their budget on oil revenue. They save all the money for the future. We can also do the same thing by managing this time.
“It may be that God has designed it this way for us in order to make progress in terms of fiscal discipline. The National Assembly is taking this seriously based on our comments this afternoon and we are prepared to also lead the fight to enthrone fiscal discipline in Nigeria.”
After the contributions and transfer of further deliberations on the bill to the Committee on Finance and Appropriations, Ekweremadu adjourned further sitting till February 17.
Like Tambuwal, he gave no reason for the adjournment but a senator told one of our correspondents that it was to enable them to go back to their respective states to mobilise support for their parties for the February 14 presidential poll.
The senator, who did not want his name in print, said, “What happened today (Wednesday) is tactical. It means the passage of the budget can only be possible after the presidential election . On the surface, it was to enable members to work for their respective parties ahead of the next month’s presidential poll. But the core reason is to enable us to wait and see in whose direction the victory pendulum would swing to.
If the President with his party wins, much changes will not be made to the bill. They will always be a way to make the budget work. But if the opposition emerges victorious, you know the budget proposals may become a tissue paper.”