Amidst a recap, EZREL TABIOWO replays the position of the Senate on the adoption of austerity measures by the federal government and funding of annual budgets.
Austerity
Following senate’s resumption on February 17, 2015, after a one month break taken to observe the presidential elections earlier fixed for February 14 and subsequently rescheduled to hold March 28, the relevant committees of the upper chamber during several meetings with various ministries, departments and agencies of government that appeared to defend this year’s budget, reiterated the need for a cut in spending.
The call for drastic reductions to mainly recurrent expenditures in the respective budgets of MDAs was reached and adopted by the federal government following the crash of crude oil price in the international market last year, a development that in turn resulted in the downward spiral of the country’s economic fortune.
The senate, apparently determined to see to the enforcement of the federal government’s austerity measure policy that is anticipated to salvage Nigeria from its economic woes, last week Tuesday, called for the outright scrapping of service wide votes in subsequent budget proposals after its transfer to relevant MDAs, one which got an allocation to the tune of N360.94 billion in the 2015 budget proposal.
Out of the said amount, the senate recommended the transfer of N63 billion meant for Presidential Amnesty Programme to the Niger Delta Ministry; and N22 billion earmarked for the provision of Internal operations of the armed forces to the ministry of defense.
Also, the chamber accordingly in another recommendation, stated that all sums provided as arrears of pension and gratuity should be reclassified from service wide votes to relevant heads, adding that general provision for same in subsequent budgets be discontinued.
Service wide vote is a major component of the budget of Ministries, Departments and Agencies of government, earmarked for contingencies and approved by the National Assembly but without projects attached to it.
Asides kicking against the continuation of the service wide votes, the Senate also embarked upon severe slashes by reviewing downward the allocation for Subsidy Reinvestment and Empowerment Programme, SURE-P from a whooping N102.50 billion proposed in last year’s to N21.03 billion in 2015, accounting for a difference of N81 billion.
The review was reached by the senate following the adoption of the report of the senate committee on finance on the 2015-2017 Medium Term Expenditure Framework, MTEF, and Fiscal Strategy Paper, FSP submitted to the National Assembly by President Goodluck Jonathan last year.
Also reviewed was subsidy for Premium Motor Spirit (PMS), otherwise known as petrol, from N200bn last year to N100bn in the 2015 budget proposal.
Projected subsidy on kerosene was cut down from N91.08 billion to N45.52 billion.
Similarly, the total recurrent expenditure profile of the N4.3 trillion 2015 budget was also reduced from N2,616.01 trillion to N2,584.08 trillion; just as Total statutory transfers was reduced from N411.85 billion to N363.27 billion.
The senate, however, increased Total capital expenditure of N633.53 billion earlier proposed by the executive arm of government to N700.78 billion; while reviewing upward the total non-oil revenue from N3,539.07 trillion to N4,024.11 trillion.
Highlights of other critical areas adopted by the senate in the finance committee report are the parameters fixed for the 2015 budget profile.
The chamber reviewed the earlier proposed oil benchmark of $65 per barrel by the executive to $52 per barrel; just as it fixed an exchange rate of N190 to $1USD as against N160 to $1USD earlier proposed.
In a related development, the various Ministries, Departments, and Agencies of government while appearing last week to defend their respective budgets were hit below the belt by senate’s decision to commence drastic cuts to the recurrent expenditure profile of the 2015 budgets of MDAs.
The decision to so do was reached by some of the various committees of the senate that felt the urgent need to effect cuts that would see to a reduction of almost 50 percent of total spending proposed by ministries and departments of government.
During one of such budget defense sessions last week, and which had the Ministry of Special Duties appearing before members of the Senate Committee on Special Duties, led by Senator Clever Ikisikpo, PDP, Bayelsa East, one of the lawmakers on the committee, Senator Ahmad Lawan, APC, Yobe North, expressed total dissatisfaction with the low level implementation of the 2014 budget, as passed.
Senator Lawan, who chairs the senate committee on public accounts, noted that recurrent expenditures of the Judiciary and the legislature have since been trimmed down by 45 percent, in line with the austerity measures, and insisted similar measure be effected in the executive arm of government, especially within ministries and departments of government.
“It is important that the austerity measure being projected by government should be truly reflected in our spending pattern.
“I think that the recurrent expenditures for ministries should be cut down by 45 percent, otherwise, we will not be fair to the judiciary and the National Assembly,” he added.
He particularly flayed when he found out in the ministry’s 2014 budget that it spent a total of 6 million naira for fumigation of its office during the year.
“To spend N6 million on fumigation office complex alone, I think it is unacceptable and we must do everything possible to discourage things like this,” he said.
Earlier, the Minister of Special Duties, Alhaji Tanimu Turaki, represented by the ministry’s permanent secretary, Mr Taiwo Haruna, said a total of N805,792,038 was allocated to the ministry in the 2015 fiscal year.
Out of this, he said N200,000,000 was allocated for capital cost, N266,342,719 for overhead cost while N339,449,319 was earmarked for personnel cost.
He explained that the ministry was being faced with serious funding challenges as the “envelopes allocated to the ministry for 2015 capital and overhead expenditures are insufficient to successfully carry out its mandate.”
Budget funding
Finance Minister and Coordinating Minister for the economy, Dr. Ngozi Okonjo-Iweala on February 24, 2015, came under severe fire in the Senate following the analysis of last year’s budget of Ministries, Departments and Agencies which revealed very poor level of implementation.
Senators who on that day had met behind closed doors for two hours, resolved to resist attempts by any government official to stifle the implementation of projects approved for execution in the budget.
The chamber while urging members of the various senate committees working on the budget to hasten work on the 2015 budget, directed its committees to liaise with the various Ministries, Departments and Agencies to cut down on recurrent votes in order to make more fund available for projects.
Also, during the budget defense of their respective 2015 budget proposals which held over the last two weeks, some of the MDAs while appearing before the various committees explained that the poor implementation of projects approved in last year’s budget was due to lack of funds required for execution.
The angered senators on the various committees however vowed to redress the lopsidedness between the recurrent expenditure and capital votes, in favour of the Ministries, Departments and Agencies.
One of such lawmakers while speaking at the senate committee on Power, Mines and Steel, Senator Victor Lar, said, condemned the action of the Finance minister’s refusal to release funds for approved projects in the budget.
He said: “A situation where we considered a budget, have it approved, then somebody sits in an office and refuses to make releases is too bad.
“Ministers and heads of various agencies who had awarded contracts could not pay but somebody would sit in the comfort of her office and declare a surplus. Is that an economy that is growing?
“This is simple planlessness, this is frustrating and it cannot go on like this. The presentation by the Minister of steel for instance is an opportunity to raise the revenue profile of the ministry from a non oil sector which would have enhance economic growth was frustrated.
“A serious nation would have encouraged this ministry to ensure that everything required was provided but this is the same ministry that had been subjected to the same envelope system, to the same non releases among others.
“We need to change the way we do things because if we have a problem and you keep on using an approach that has not yielded the desired results, common sense demands that you change the approach.
“We keep doing the same thing wrongly and we expect to get the desired results. It will not work. It is now becoming part of our tradition to get budgets approved as a parliament and someone refused to provide funds for its implementation.”
On his path, Senator Chris Ngige, said that the Nigerian economy was headed in the direction of collapse should the non release of funds for the implementation of the budget be overlooked by the National Assembly.
He said: “We as legislators should be interested in putting in place, structures that will enable the country to realise additional sources of revenue apart from the oil sector.”
In a related development, lawmakers on the senate committee on Lands and Housing were short of words by the revelations of the Minister of Lands and Housing, Mrs.Akon Eyakenyi, which disclosed that the ministry owed contractors over N39bn.
According to her, the ministry could not embark on the execution of new projects last year because of the heavy burden on it.
Chairman of the committee, Senator Bukar Ibrahim expressed wondered how the ministry could go ahead to address the housing needs of Nigerians in view of the non-release of funds meant for same.
Also, his colleague on the senate Committee on Establishment and Public Service, Senator Aloysius Etuk, described as shameful, the manner budgetary allocation was released to MDAs, adding that “The rate of budgetary releases is shameful and unacceptable.”
“For us to sit down to plan annual budget and at the end of the day, only 41 per cent performance is implemented is like cutting short the expectations of the people”, Etuk said.
