Three tiers of govt to get 12% more in 2018Saraki, Dogara hinge early passage on cordial executive, legislative relationsLawmakers subtly register protest over non-funding of constituency projects
Damilola Oyedele, James Emejo in Abuja and Obinna Chima in Lagos
In a bid to meet his administration’s target to restore the budget calendar to the January-December fiscal cycle, President Muhammadu Buhari Tuesday presented the N8.612 trillion 2018 Appropriation Bill to a joint session of the National Assembly, representing a 16 per cent increase over the N7.441 trillion budget for 2017.
Of the N8.6 trillion budget, the Ministry of Power, Works and Housing headed by Mr. Babatunde Fashola, got the lion share of N555.8 billion, signifying the administration’s commitment to infrastructure projects, to expand the economy and create more employment opportunities.
Clad in a light blue traditional babariga and cap with his trademark glasses, Buhari walked into the Green Chambers of the House of Representatives at 2.02 p.m.
He was ushered in by the Deputy Speaker of the House, Hon. Yussuff Sulaimon Lasun, his Senior Special Assistant, National Assembly Matters (Senate), Senator Ita Enang, Senate and House Leaders, Ahmed Lawan and Femi Gbajabiamila, and the House Whip, Hon. Alhassan Ado Doguwa.
The event was witnessed by Vice-President Yemi Osinbajo, Secretary to the Government of the Federation (SGF), Mr. Boss Mustapha; Head of Service, Mrs. Winifred Oyo-Ita; Chief of Staff to the President, Mr. Abba Kyari; Chairman of the Nigerian Governors’ Forum (NGF) and Zamfara State Governor, Abdulaziz Yari of Zamfara; national executives of the All Progressives Congress (APC) led by the party’s chairman, Chief John Oyegun; the Minister of Budget and National Planning, Senator Udoma Udo Udoma; and his finance counterpart, Mrs. Kemi Adeosun, among other ministers and senior government officials.
Tagged the budget of consolidation, the Bill is proposing N2.428 trillion as capital expenditure, representing 30.8 per cent of the budget, N3.494 trillion for recurrent expenditure, N2.014 trillion for debt service, N456 billion for statutory transfers, and N220 billion for the Sinking Fund to retire maturing bonds to local contractors.
The President of the Senate, Dr. Bukola Saraki, and the Speaker of the House of Representatives, Hon. Yakubu Dogara, however hinged the early passage of the budget on the cordial relations between the executive arm of government and the legislature.
The key parameters and assumptions for the 2018 budget proposal were set out in the yet-to-be approved 2018-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), which has been committed to the Senate and House Committees on Finance, Appropriation and National Planning.
These include a benchmark oil price of $45 per barrel, oil production estimate of 2.3 million barrels per day, including condensates, exchange rate of N305/$1 for 2018, real GDP growth of 3.5 per cent and inflation rate of 12.4 per cent.
The estimated total revenue for the 2018 budget was put at N6.607 trillion, 30 per cent more than the 2017 budget estimates. Of the total projected revenue, oil revenue was put at N2.442 trillion, while N4.165 trillion would come from non-oil revenue sources.
The projected deficit in the 2018 budget estimates was put at N2.005 trillion, representing 1.77 per cent of GDP.
According to Buhari, “We plan to finance the deficit partly by new borrowings estimated at N1.699 trillion. Fifty per cent of this borrowing will be sourced externally, while the balance will be sourced domestically.
“The balance of the deficit of N306 billion is to be financed from the proceeds of privatisation of some non-oil assets by the Bureau of Public Enterprises (BPE).”
Buhari said based on MTEF/FSP parameters, total federally collectible revenue was estimated at N11.983 trillion for 2018.
“Thus, the three tiers of government shall receive about 12 per cent more revenue in 2018 than the 2017 estimates. Of the amount, the sum of N6.387 trillion is expected to be realised from oil and gas sources. Total receipts from the non-oil sector are projected at N5.597 trillion,” the president explained.
Buhari, in an address which lasted for one hour and nine minutes, also presented key capital spending estimates to include N263.10 billion for the Ministry of Transportation, N145 billion for the Ministry of Defence, N118.98 billion for the Ministry of Agriculture and Rural Development, N95.11 billion for the Ministry of Water Resources, and N82.92 billion for the Ministry of Industry, Trade and Investment.
Others are N63.26 billion for capital projects in the Ministry of Interior, N61.73 billion for the Ministry of Education, N71.11 billion for the Ministry of Health, and N53.89 billion for the Niger Delta Ministry.
Capital spending for Special Intervention Programmes was put at N150.00 billion, N109.6 billion for the Universal Basic Education Commission (UBEC), N40.30 billion for the Federal Capital Territory, N45 billion for the North East Intervention Fund, N71.20 billion for the Niger Delta Development Commission (NDDC) and N100 billion for Zonal Intervention Funds (ZIFs).
Recurrent expenditure for key ministries such as interior was estimated at N510.87 billion, N435.01 billion for the education ministry, N422.43 billion for the Ministry of Defence and N269.34 billion for the Ministry of Health.
The 2018 budget is also proposing the sum of N9.8 billion for the Mambilla hydro power project, including N8.5 billion as counterpart funding, N12 billion counterpart funding for earmarked transmission lines and sub-stations, N35.41 billion for the National Housing Programme, N10 billion for the Second Niger Bridge, and N300 billion for the construction and rehabilitation of strategic roads.
The 2018 budget will consolidate on the achievements of previous budgets and deliver on Nigeria’s Economic Recovery and Growth Plan (ERGP) 2018 – 2020, Buhari told the audience.
The president spent considerable time highlighting the successes of the 2016 budget, probably due to the low implementation of the 2017 budget which was passed in June this year and is expected to end when the new budget is passed.
The president said N1.2 trillion was expended on capital projects in the 2016 budget, adding that 2017 was a year of uncertainty while 2018 is expected to be a year of better outcomes.
“Nigeria’s journey out of the recent recession was a revealing one. We heard many opinions from within and outside Nigeria on how best to address our economic woes. We listened carefully and studied these proposals diligently.
“Our belief has always been that the quickest and easiest solution may not necessarily be the best solution for a nation as diverse as ours. We took our time to create a balanced and equitable response, keeping in mind that only tailored Nigerian solutions can fix Nigeria’s unique problems,” Buhari said.
The president listed the achievements brought about by his policies to include an increase in external reserves to $34 billion as of October 30, 2017, an export-import trade surplus of N506.5 billon by the second quarter of 2017, rise in ranking to 145th position by World Ease of Doing Business report from 169th position, improved tax administration, optimising efficiency in expenditure, increased investment in infrastructure, agricultural and health sector development, and the Social Investment Programme.
“Our Sovereign Wealth Fund, which was established in 2011 with $1 billion, did not receive additional investment for four years when oil prices were as high as US$120 per barrel. However, despite record low oil prices, this administration was able to invest an additional $500 million into the fund,” he said.
Commending the members of the National Assembly for their collaborative support in moving Nigeria forward, Buhari gave the lawmakers the assurances of his strong commitment to deepening executive-legislative relations.
“I appeal to you to swiftly consider and pass the 2018 Appropriation Bill,” he said and expressed hope that the budget would be passed before January 1, 2018.
Legislature Pushes for Harmony
Having listened to the president’s budget speech, the leadership of the National Assembly harped on the need to sustain good working relations between the executive arm and legislature in tackling critical national issues that benefit Nigerians.
They, however, made it clear that the early passage of the budget would be dependent on its defence by agencies and departments of government.
The Senate President, in his remarks, specifically noted that both arms of government must work together in ensuring that budget estimates are passed by the end of the year.
He recommended sanctions for erring parastatals and agencies that fail to submit their budget along with the 2018 budget, insisting that they be denied access to their capital expenditure unless the budget is passed.
According to him, “The budgets of parastatals and agencies are meant to be submitted with this budget presentation, as stipulated by the constitution.”
Saraki also spoke on the need to review the agreements that government had signed with some private sector service providers, noting that some of them were tilted in the favour of the providers and clearly not in the interest of the country.
He said: “Many businesses were adversely affected by the recession; many lost their means of livelihood. As the country emerges from that period of uncertainty, the question on the lips of many Nigerians has been this: How does the recovery translate into tangible economic benefits for me?
“We must remember that the real gains must be felt on a personal level by the individual, for economic recovery to have meaning. People are seeking to get back to work but cannot find jobs.
“Entrepreneurs want to restart their businesses but are finding it difficult to access the needed capital. As for our farmers, the last thing they want is for produce to go to waste because people cannot afford to buy.”
In his speech, Dogara also hinted that the passage of the 2018 Appropriation Bill by the National Assembly might be delayed due to inadequate consultations in its preparation between the government agencies and various oversight committees of the National Assembly.
“Consequently, one can only hope and pray that it does not lead to delays in consideration and passage of the budget,” he said.
The Speaker, however, noted that the success of the budget presentation had separated them as “true leaders” who in the midst of a hazy executive-legislative relationship elected not to turn on one another but to turn to each other in the very interest of our constituents and national progress.
According to him, “This is the way we must go as our constitutional order is organised in a way that deliberately denies any of the three arms the strength to go at it alone on any national issue. Where that has happened, it is progress that suffers.
“That reminds us of the adage that says, ‘If you want to go fast, go alone but if you want to go far, go together.’ Examples abound on how fast but not far, the executive has gone on some national issues where they have decided to go alone. There is no national challenge we cannot overcome if we work together.”
He further highlighted the concerns of lawmakers over the poor implementation of the 2017 budget, fearing it could be abandoned.
Though the president had assured the lawmakers that next year’s budget would not in any way hamper the implementation of the 2017 budget, Dogara stressed the need to “redouble efforts in implementing the 2017 budget, if we must retire it in January or at the very least roll over most of the projects in the 2017 budget to 2018”.
He also likened the non-adherence to fiscal discipline to corruption, which the current administration is fighting to stamp out.
“Mr. President, as legislators, what agitates us is the prospects of totally abandoning the 2017 budget and the dire consequences of doing so. The questions that must be answered include whether we have effectively enforced 2017 fiscal targets and whether managers have complied with the budget as authorised by the legislature.
“Our experience with the implementation of the 2016 budget amply demonstrates that obeying our Appropriation Laws maximises the release of our potential while violating the Appropriation Laws caps the release of our national potential.
“This means that we have to redouble our efforts in implementing the 2017 budget if we must retire it in January or at the very least roll over most of the projects in the 2017 budget to 2018. No need to remind us that fiscal indiscipline is as grievous a problem as corruption which this government is busy eliminating,” he said.
He further informed the president that though the country was said to have exited the recession, the majority of Nigerians were still struggling to make ends meet.
“Although the recession has technically ended, most Nigerian families are still struggling. As a government, we must do all within our powers to hasten their long night of panic and fear into a glorious morning.
“We must never allow this nation to slide into recession, not now, not ever again. We cannot therefore discountenance policy consistency and synergy between all stakeholders, if we must sustain economic growth and development, going forward.
“Mr. President, I urge that you take no prisoners in the implementation of your well crafted and thought-out Economic Recovery and Growth Plan, which you launched in January 2017,” the Speaker said.
Meanwhile, the plan by members of the Peoples Democratic Party (PDP) House caucus to stage a protest during Buhari’s budget presentation, in order to draw his attention to their displeasure over the non-release of zonal intervention funds for constituency projects, was not followed through.
Although the lawmakers succeeded in smuggling their placards into the chamber, they did not raise them during the president’s presentation.
Some of the inscriptions on the placards read: “Zero implementation of capital projects is wickedness,” and “Implement 2017 capital projects or resign.”
Although the members did not give reasons why they shelved the planned protest, a reliable source told THISDAY that it took the intervention of Dogara who had pleaded with them not to carry out the protest, as this would have portrayed him in a bad light before the president.
However, while the budget presentation was relatively peaceful, the lawmakers in about four instances interrupted the president’s address with loud murmuring.
The first murmuring occurred when Buhari, while listing his achievements, claimed that 766 kilometres of roads across the country were rehabilitated or constructed.
Although the murmuring was audible all through the jam-packed chamber, it just elicited some laughter from the audience.
It was however strong enough to make the president halt his presentation for a few moments, when he mentioned the zonal intervention funds of N100 billion in the budget.
The murmurs were caused by the displeasure of the lawmakers over the non-release of the ZIFs for their projects.
Despite the few interruptions, Buhari was treated to a standing ovation at the conclusion of his address.
THISDAY had reported Tuesday that plans were afoot to boo the president over the non-release of the ZIF, which lawmakers believe was weakening their chances of retaining their seats in the next general election.
Ahead of the budget presentation, banks and other businesses operating in the National Assembly were shut, as is usually the tradition.
As early as 7 a.m., entry into the National Assembly complex was allowed only after strict security checks with prior accreditation.
Reactions to Budget
Reacting to the thrust of the 2018 Appropriation Bill, the chief executive of BudgIT, Mr. Seun Onigbinde, said that the bill showed that the government intends to continue its philosophy on expanding infrastructure, debt, deficit as well as to put more money on capital allocations.
Onigbinde noted that the 2018 budget was the last lap of Buhari’s budget presentation before the elections kick in, adding that this should compel the government to speed up the implementation of the budget.
“A lot of Nigerians are looking at this budget to see if there would be tangible achievements by this government.
“So it is important that the National Assembly considers this in the passage of this budget because we would have a short period of governance next year, and much more to do about politicking.
“So, before politicking starts, let’s have the budget passed so that we can factor in the procurement cycle that takes up to three months and we can get the projects implemented so that we can have results to show the electorate for the next election cycle,” he said.
He, however, stressed the need for the government to think of ways to ramp up non-oil revenue, saying most of the assumptions for the revenue projections in the 2018 budget were bloated and too optimistic.
“The federal government needs to look at how to expand VAT, Company Income Tax collections and build on other opportunities for revenue,” he explained.
Also, the chief executive of Financial Derivatives Company Limited, Mr. Bismarck Rewane, urged members of the executive as well as lawmakers, to ensure that the proposed budget becomes a tool of economic management so as to achieve its desired objective.
“What we have now is an aspirational budget, what we need to see is its impact. First and foremost, an exchange rate of N305 to a dollar in a budget is not an effective exchange rate. I don’t know where that is coming from. The world is full of uncertainties and unpredictable outcomes.
“But the reality check on Nigeria will be if this becomes an impactful tool of economic management. That is the question we all must answer,” Rewane added.
In their reactions, PDP lawmakers in the House who spoke to THISDAY expressed their frustration over the poor implementation of the 2017 budget and hoped that it won’t be truncated.
Hon. Samuel Ifeanyi Onuigbo (PDP, Abia) said: “Well, you know we are moving into 2018 and after 2018 we are going to 2019 and we are in the middle of the tenure of this administration.
“It is my expectation that we will find something in this budget to give my people hope because the implementation of the 2016 and 2017 budgets was not satisfactory. Therefore it’s my expectation that 2018 would bring better things for the people we represent.”
Hon. Raphael Igbokwe (PDP, Imo) said: “We need to draw the attention of government that the effective implementation of this budget will enhance the welfare of the people. And even though the 2017 budget is still there but you can see that the average Nigerian is clamouring for better welfare and the effect is not trickling down and a lot of people are still hungry.
“So this is something the executive should take home and they need to convince us about funding the budget.
“The presentation of a budget is a mere proposal of political activity, but funding it brings it to life and helps government to convince the people about its policy direction.
“It is only when things are felt that people appreciate the presence and policy direction of government. So we want to urge the government to do more concerning funding and as parliament, we will do our best to block existing revenue leakages, to ensure that money is available to government.”
Also, Hon. Sergius Oguns (PDP, Edo) said: “Our major concern is the 2017 budget, we don’t want it to be thrown under the table before the 2018 budget is passed.
“The MDAS are going to come for their budget defence and so what percentage has so far been released to them from the 2017 budget will be brought up. But what are they going to be defending That is my concern but let’s see what happens.”
On her part, Hon. Elendu Nnenna Ukeje (PDP, Imo) said: “If as of November we are unable to do more than 25 percent of the 2017 budget, is 2018 going to be a continuation of the 2017. I am a little concerned.
“But you know this (passage of the 2018 budget before January) is not going to be feasible, but I hope it happens in the interest of the Nigerian people and I am cautiously optimistic.”
Hon. Johnson Agbonayinma (PDP, Edo) said: “The 2017 budget has not been implemented fully, you can see a lot of agitation. Even before the arrival of the president today, you could see there was agitation.
“People are angry because we all represent our constituencies across the nation and people are complaining and wondering why things are not being done.
“People can’t even pay their children’s school fees because when you are doing all these projects, it’s not money coming to the lawmakers but rather these are things belong for the people. We are closer to our constituents than the president.
“I think the wise thing for us to do is to put our heads together and work as a team, it’s not about entering a competition between the legislature and executive.”