Proshare - Facebook Proshare - Twitter Proshare - Google+ Proshare - Linked In Proshare - RSS Feed

Budget/MTEF Document Inaccuracies: Time to Reverse this Trend

Proshare

Tuesday, November 29, 2016/5:00 PM /Webtvng

One of the challenges facing the Muhammadu Buhari led administration in the area of its fiscal policy plan has been the recent trend of setbacks in the approval of critical proposals and documents by the National Assembly. This is not to say that previous administrations did not experience gridlocks in getting their fiscal policy/programmes approved by the legislature, but compared to the present dispensation it was at a minimal rate.


With already one and a half year in office, this government has witnessed three instances where its presentation of key items like the Budget, Medium Term Economic Framework (MTEF) and even loan proposals were rejected by the National Assembly on the ground of incompleteness; with delay in approvals adversely impacting the political economic space.

While some commentators and analysts assert that it could be a sign of cold relationship between the leadership of the executive and legislature, we take a cursory look at the various instances and why this trend needs to be reversed.

Budget 2016 Delay
President Muhammadu Buhari presented the 2016 Federal Budget of about N6trillion to the National Assembly on December 22, 2016 it was focused on stimulating the economy, with a 30% capital expenditure plan to invest in infrastructural development across the country.

The Budget was well received by the National Assembly but in a dramatic manner the Senate on January 10, 2016 alleged that the document presented to the joint session, was missing. According to the Senate Majority leader Senator Mohammed Ali Ndume, deliberations on the budget could not commence in January until fresh copies of the budget, were obtained from the Ministry of Finance or its Budget and National Planning counterpart. Ndume later clarified issues denying that he said the Budget document was missing. According to him “Once the budget is laid in the National Assembly, it has become the property of the National Assembly".

Some of the  lawmakers made strong allegations that during their recess, the executive secretly withdrew the budget documented presented by the President, to make necessary adjustments before sending them back to the legislature. Nigerians received this with mixed feelings, wondering how a budget could be missing and the key documents tampered with, it generated debates across the entire nation. On its part the Presidency denied any connivance in the act, as the Media Aide to the President, Malam Garba Shehu said categorically that the President did not withdraw the document. The Minister of State for  Budget and National Planning, Mrs Zainab Ahmed also stated that before the resumption of the National Assembly for 2016,  over 400 copies of the document were printed and delivered to the lawmakers.

The National Assembly after two months approved the document for Presidential accent on March 23, 2016, reducing same by N17bl from N6.07trl to N6.06trl following rigorous scrutiny which revealed that the figures presented in the document were inaccurate. President Buhari signed the Budget 2016 into law on May 6, 2016 after another round of assessments and presently the implementation level as at October is 41.25% due to the passage delay.

MTEF 2017-2019
The Medium Term Economic Framework and Financial Stability paper covering 2017-2019 period, has been in the news throughout this month, because of its rejection by the National Assembly.

On November 4, 2016 the Senate outrightly rejected the document describing same as empty and not worth considering for passage. The Senate complained that the details of the fiscal proposal, which in Nigeria’s public finance architecture are the precursors to the annual budget, were not attached to the president’s letter requesting the consideration.

BudgIT a strategic policy advocacy group in the nation in a recent article, alluded to the position of the Senate stating categorically that the MTEF 2017-2019 framework is incomplete.

For BudgIT it lacks the following;

         Federation targets (Federal, States and Local Governments) as well as clear classification of revenue lines.

         The current MTEF document does not include a detailed 2016 budget performance report

         The Budget Office of the Federation has not released any budget implementation report for 2016.

         In terms of comprehensiveness of the MTEF documents as previously seen, the 2017-2019 projection is a setback.


Reviewing the reworked MTEF document on Thursday November 24, 2016 the Senate referred it to its  various committees on budget and finance, stating that the assumptions and projections were still unrealistic.

Senate President Senator Bukola Saraki who presided over the plenary  said “Like some of our distinguished colleagues said, our responsibility is to work on it and use our capacity to do the right thing. We have our committees on Appropriation and Finance that should not just take anything from the Executive, sign it and return it verbatim. If it means that we have to rehash it, look at it again, turn it around and do what is right, then, that it our responsibility”.

$30bl Loan Proposal
The Federal Government sent to the Senate a $29.9bl external borrowing plan approximately $30bl for a 3-year period (2016-2018) to finance key national infrastructure projects, that will stimulate the economy presently in a recession.

It was well received on November 2, 2016 but rejected by the Senate, whose members described it as a proposal that lacked details, strategies and a clear roadmap of why the loan was viable and how it will be repaid. Senators criticized the policy makers who developed the document, for not doing a thorough job on the external borrowing plan. The Presidency on its part has promised to send a more comprehensive plan covering the $30bl loan.

Conclusion
We have seen a repeated occurrence of issues around fiscal policy documents, which signifies that the Buhari administration must of necessity take seriously the improvement in its communication with the National Assembly. In addition, the economic management team must step up their game by presenting robust documents, to the National Assembly on its fiscal policy direction.

Nigerians need to know the true state of the economy and the onus is on the fiscal policy actors to effect this. Both arms of the government, the executive and legislature must be willing to listen to each other in engagements on the budget and critical fiscal and economic policies.

As the President prepares to present the 2017 Budget to the National Assembly on December 2, 2016, it is highly necessary that the Federal Government reverse this trend of inaccuracies, and ensure thorough work is done on any policy document to be submitted to the National Assembly. Nigerians and indeed the international community are watching and expectant; it is thus expedient that more be done by the Economic Management Team.

Related News
1.       The 2017-2019 Medium Term Expenditure Framework (MTEF) is Incomplete – BudgIT

2.      Nigeria Economy: Some Hopeful Projections in the MTEF

3.      The US$30bn Question or a No Brainer

4.      Summary of President Buhari’s Budget 2016 Presentation

 

Related News