Sunset at the National Assembly
Opposition APC proposes reduction in budget allocations totalling N350 bn to fund capital projects.
Nigeria’s main opposition party, the All Progressives Congress, APC,
has asked its members in the National Assembly to block a plan by
President Goodluck Jonathan to upgrade facilities at the sprawling Aso
Rock presidential villa, and purchase a new aircraft into an already
bloated presidential air fleet at a huge N3 billion.
The proposals are part of the 2014 budget currently before federal lawmakers.
The APC also proposed a reduction in spending on about 16 items in
the budget, to save N350 billion which should be used to raise capital
expenditure and create jobs for Nigerians.
These proposals are contained in the party’s 23-page review report on
the 2014 budget titled: “Review of the Draft Federal Budget: APC’s
Views on the Federal Government Draft Budget,” exclusively obtained by
PREMIUM TIMES.
The 2014 Appropriation Bill, which proposes a total expenditure of
N4.62 trillion- a seven percent cut on the 2013 figure of N4.987
trillion- was presented to the National Assembly last December by the
Minister of Finance, Ngozi Okonjo-Iweala.
It is made up of N400bn (2013: N388bn) for statutory transfers;
N737bn (2013: N592bn) for debt service; N2.385 trillion (2013: N2.419
trillion) for recurrent non-debt expenditure; and N1.245 trillion (2013:
N1.589 trillion) for capital projects.
The opposition party had directed its members in the National
Assembly to block the passage of the budget and other executive bills in
protest against the manner the federal government was handling the
political crisis in Rivers State.
The APC, however, said the objective of the review of the document
was to guide its members in the National Assembly, who, with cooperation
from their like-minded colleagues in the legislature “can restructure
and improve the content of the 2014 budget to serve the people of
Nigeria, and not the select few that will capture it as currently
proposed.”
In the report, the opposition party said the purchase of another
aircraft, which would bring the number of aircraft in the presidential
fleet to 11 and which would cost the nation N1.5bn; the upgrade of
Presidential Villa facilities (N1.5bn) and the construction of a VIP
wing at State House Clinic at N0.75bn, all proposed by the federal
government, were unnecessary.
The APC also demanded the reduction by N4 billion the cost of the
proposed National Conference for which N7 billion was proposed by the
government. The party, which had opposed the convocation of the
conference, said the provision was excessive because it might achieve
nothing.
It further noted that the N7bn was more than what the average federal
university gets in one year and about the same as the N8bn budgeted for
“National Job Creation Scheme.”
“Reduce the provision for the National Dialogue to N3bn and save N4bn
for the capital budget. The provision is excessive. The National
Political Reform Conference of 2005 cost N945 million and likely to lead
to the same conclusion,” the party said in the report.
Other recommendations made by the opposition party are as follows:-
-Reduce travel budget by 75% and training budget by 50% and save N30bn;
-Reduce security votes in MDAs by 50% and eliminate them in all, but needy ones and save at least N20bn;
-Reduce some of the non-essential recurrent spending listed above and save at least N5bn;
-Reduce the constituency projects’ provision to the 2013 level of N50bn, thus saving N50bn;
-Delete all provision for outsourced services, all administrative
charges, and running and ‘verification costs’ for all pensions as they
were all provided for in the 2013 budget. This will save about N11bn.
-Deleting all provisions in MDA budgets for contributions to local,
state and international organizations, which have been partly duplicated
in the service-wide vote. This will save about N3bn;
-Reduce overall provision for monitoring and evaluation in the entire
budget by 75% and save N9bn for utilization on other capital
expenditure;
-Apply an across-the-board reduction of 75% on all ‘research and
development’ budget items and transfer the estimated savings of N35bn to
other capital projects;
-Roll up the following wasteful or ambiguous line items from the
service-wide vote; national job creation scheme – N8bn, special
intervention – N62.8bn, and sinking fund for infrastructural development
– N30bn, and transfer the total of N100.8bn to other capital projects;
-Reduce the provision of N14bn for acquisition of computer software
and N14bn for motor vehicles in the 2014 by 75% and transfer N20bn to
other job-creating capital projects.
-Eliminate the duplications and “cut-and-paste” items in the budget;
for instance provisions for kitting of youth corps members in virtually
every MDA budget, indefensible grants and the like, and transfer these
to the capital budget -estimated savings of N2bn;
-Removal of N16bn proposed for a brand new ‘wholesale’ development
finance institution instead of restructuring the Bank of Industry and
N2bn government contribution to the newly-established Mortgage Refinance
Company be taken off the service-wide vote and transferred to the
capital development fund;
The APC said the N350 billion that would be save from the reduction
in some allocations and deletion of others could be channelled into the
mass construction of houses in the states, rehabilitation of major
roads, construction of police and military barracks and funding of
agriculture and power sectors.
“From the foregoing items alone, over N350bn can be freed to be spent
on more job-creating capital projects like the construction of 2,000
housing units in each state of the federation plus the FCT (either by
the FHA or grants-in-aid to the various State Housing Corporations to do
so) at the cost of N90bn; enhanced funding of key roads and bridge
projects like the East-West Road, Lagos-Ibadan Expressway, New Niger
bridge, Onitsha-Enugu Expressway and Abuja-Lokoja Road that have
consistently suffered from inadequate funding – N100bn,” the party said.
“More funding for the construction of Police and Military Barracks
all over the country, and the rehabilitation of existing ones at the
cost of N30bn; better funding of the agricultural and SME sectors with
the sum of N50bn; increase the North-East Intervention Fund to N11bn
with an expected contribution of N33bn from multilateral and bilateral
donor agencies; increase funding for power supply by earmarking N30bn
for gas infrastructure and N30bn for the transmission company to
complete ongoing projects.”
The party also stated in the report that the adjustments would raise
the budgetary allocation to capital expenditure by 4.7% to 31.6%, adding
however it would still remain too low, relative to what was required to
meet the stated objectives of this budget.
The party said there was a limited link between the budget and Medium
Term Expenditure Framework, MTEF. Noting that the MTEF for the 2014
proposed a benchmark price of $74, which was revised upwards by the
National Assembly on the insistence of its members to $77.50 per barrel,
the APC said it was still too low and needed to be adjusted back to $79
during the appropriation process.
It stated that on the basis of price adjustment, an additional N173
billion goes into the federation account as crude oil sales and
federally collectible revenues rose to N10.692 trillion while gross
federation account inflows increased to N10.276 trillion.
It listed the “hidden” deductions as Joint Venture Cash Calls (N858,
588bn), Gas Infrastructure and Development (N304.541bn), Oil
Pre-Shipment Agency Expenses N3.200bn), Frontier Exploration Services
(N16.000bn) and Fuel Subsidy Payments (NNPC/Marketers) (971.138bn).
The APC said, “These deductions amount to over N2 trillion from
revenues accruing to states and local government. These deductions are
decided unilaterally by the federal government without any
consultations, transparency or rigorous debate. It is also noteworthy
that these sums deducted do not get transferred into the federation
account as required by the Constitution.”
On special funds, the APC said the special funds to be held in trust
by the federal government in 2014 for the entire nation needed to be
transparently budgeted, accounted for and audited regularly. The special
funds, which total N190.800bn, listed are Ecology and Derivation
(60bn), Statutory Stabilization (N30bn), Natural Resources Development
(N100.800bn).
The APC also criticized the allocation of N66 billion to the
Independent National Electoral Commission, INEC, to conduct the 2015
general elections. The party said the cost of the exercise could be
significantly reduced if all the elections were held in one day instead
of two days, February 14 and 28, 2015, proposed by the Commission for
the presidential, National Assembly, governorship and State Assembly
elections.
The APC also faulted the allocation of “a paltry N102bn” to the power
sector while the Agriculture ministry fell by nearly 20% from N83bn in
2013 to N67bn in 2014.
It criticized the N240bn budgeted for the Niger Delta Ministry,
associated agencies and programmes, saying it was twice the allocation
for electric power and more than the budgets of the ministries of works,
transport (including SURE-P) and the Millennium Development Goals
(MDG).
The party argued that even if the allocation to the Niger
Delta-focused agencies were justifiable, the outputs and outcomes of
similar allocations in past years “leave much to be desired on account
of pervasive corruption and lack of implementation capacity in the
benefitting Ministries, Department and Agencies, MDA.”
On regional considerations, the APC regretted that the entire North
East zone, which is the hotbed of the Boko Haram insurgency, received a
“pathetic” N2bn to address the devastation in the six states making up
the zone.
“This meagre budgetary proposal may have to do more with the
dominance of the opposition in the zone than an assessment of real
need,” the party, which controls three of the six states, alleged.
The party faulted the allocation of N39bn for Research and
Development, which it said “does not make sense in many MDAs that have
little or no R&D focus.”
The APC faulted the allocation of N14bn for the acquisition of
computer software and another N14bn for the acquisition of motor
vehicles, saying it was too large an amount in a federal government that
had monetized the acquisition of vehicles since 2004.
The APC added, “In summary, an overview of the budget proposals
clearly shows an attempt at spreading expenditure items in various parts
of the budget to mask the administration’s real priorities as against,
and in contradiction to, the stated objectives of the appropriation
bill.
“Furthermore, the critical areas earlier identified that need
enhanced public funding to generate inclusive growth with jobs have
received much lower allocations than expected. The budget contains many
classification errors, typos and duplication of items or line items that
are clearly not needed. These need to be corrected by the National
Assembly.
“Many line items in the recurrent and capital budgets were simply cut
and paste from the budget of 2013, complete with descriptions, amounts
and even typographical errors. MDAs simply felt the need to allocate
amounts large enough to exhaust their respective fiscal envelope for the
year without any regard for public purpose or real needs. Perhaps a
movement from the envelope system to a zero-based budgeting system is
what is needed to impose some fiscal and hard budget constraints on
federal MDAs.
“The Jonathan administration has predictably made no statements about
fighting corruption in the 2014 budget. The levels of allocation to
MDAs with publicly-acknowledged corruption challenges (e.g. the Ministry
of Aviation and agencies), while the anti-corruption agencies are
hardly getting by in this budget says it all. We will now look at
specific areas that the legislature will need to focus on to ensure the
2014 Budget works for all Nigerians.”
PremiumTimes