As Reps work on 2020 reviewed budget…

Last Thursday, both chambers of the National Assembly reconvened from their Sallah break to consider the amended 2020 Appropriation Act. JOSHUA EGBODO writes on expectations.

What Buhari asked for

President Muhammadu Buhari, in a communication, which the Speaker of the House of Representatives, Femi Gbajabiamila, read out to his colleagues at start of the plenary last week, he urged the house to speedily pass the amended 2020-2022 Medium Term Expenditure Framework (MTEF), and the Fiscal Strategy Paper (FSP), as well as the revised Appropriation Bill for the 2020 fiscal year.

The president explained in the letter that it had become necessary to review the 2020-2022 MTEF/FSP and amend the 2020 Appropriation Act in view of the sharp decline in oil prices and the cut in Nigeria’s crude oil production quota occasioned by the COVID -19 pandemic.

According to Buhari, the main assumptions of the 2020 Appropriation Act were “no longer sustainable and it is important to adjust expected revenues, considering the widespread disruptions in other economic activities as well as national trade and transportation due to the measures implemented across the world to contain the pandemic”.

With the noted developments, the president said it was imperative to re-allocate resources in the Appropriation Act, to ensure effective implementation of the emergency measures and other actions necessary to mitigate socio-economic effects of the COVID -19 pandemic.

Fresh loan request also

The president also requested the house to approve a loan request of $5.513 billion, to be sourced from four unilateral financial institutions, under the external borrowing plan of the federal government to finance the budget as amended, citing reasons earlier highlighted: decline in crude oil prices at the international market from about $57 per barrel benchmark price projected in the budget to the current $25 per barrel, as well as sharp cut in crude oil production quota for Nigeria.

He gave details of the facility sources as; International Monetary Fund (IMF) $400 million, World Bank; $1.5 billion, African Development Bank $500 billion and Islamic Development Bank $113 billion.

The amended budget

The 2020 budget as initially passed by the National Assembly had an aggregate projected expenditure of N10,594, 362,364,830, (approximately put at N10.594 trillion). However, the executive arm of the federal government for obvious reasons, this time proposed a downward review, putting the aggregate expenditure at N10,509,654,033,053 (N10.600 trillion), indicating a reduction by about N84.708 billion from the initial figure passed by the parliament.

Concerns, views

The budget amendment bill was formally presented before the house at its last week’s special session for its consideration by Majority Leader, Alhassan Ado Doguwa, allowed room to other members to provide their views and opinion on its general principles.

Leading debate on the bill, Doguwa reiterated Buhari’s earlier position in the communication, stressing the need to amend the 2020 budget as necessitated by the global effect of the COVID-19 pandemic, adding that the review was solely in the interest of all Nigerians and the entire country.

He, therefore, urged his colleagues to support the bill as it promises to assist the country to combat the effects of the pandemic, adding that the bill should be referred to the relevant committees of the house to speedily work for its quick passage.

In his view, Mohammed Shehu, who agreed that the fall of crude oil price in the international market may have necessitated the budget review, however argued that the proposal before the house still did not reflect the reality on ground. According to him, “we, as a country, are at a time when we need to tighten our belt to survive the current challenges”.

He noted that the high size of recurrent expenditure in the proposal does not reflect the difficult economic times the nation had found itself, adding that the recurrent expenditure should be the first item on the budget that should be reduced.

“As it stands, it means we want to continue with life as usual as we plan to borrow money”, he said and charged the house to do a thorough job by reducing the recurrent expenditure so as not to send Nigeria backward.

Also speaking, Sada Jibia, a member elected on the platform of the APC from Katsina state, called the attention of the house to certain provisions made for savings in the excess crude account, and insisted that the parliament must amend the bill to conform with the provisions of the constitution.

On her part, Taiwo Oluga, also drew the attention of her colleagues to the amount proposed for the education sector. He stressed the need for such funding, noting that it enables the country to include e-learning in schools curricula. She further advised that funds should be moved from certain allocations from the Ministry of Finance to the ministries of education and agriculture.

After many others had contributed to the debate, the Deputy Speaker, Idris Wase, who oversaw the debate session on the budget, put the question for members’ voice votes, and the bill scaled second reading, and was subsequently referred to the relevant committees of the house for further legislative action, and to be coordinated by that on appropriations.

Earlier note of warning

Prior to formal presentation of the budget bill last week, and subsequent second reading, the House of Representatives Committee on Appropriations raised concerns over information that some Ministries, Departments and Agencies (MDAs) were already engaging in altering some of their allocations in the reviewed estimates, without recourse to the National Assembly, warning that such would not be condoned.

The chairman of the committee, Muktar Aliyu Betara, in a statement to that effect, said “there were reports that following the downward review of the budget from N10.59 trillion to N10.52 trillion due to the COVID-19 crisis and the dwindling oil prices, some MDA’s were already adjusting the budget proposal to suit their needs. Such acts will not be condoned by the National Assembly as any MDA or official found to be engaged in such illegal practices will be made to face the music”.

This alone, in the considerations of some analysts, has set the stage for possible clashes between committees of the house and respective MDAs under their supervision, when the expected engagements start.

How soon?

The leadership of the house had, both formally and informally, given assurances that it would do everything legislatively possible to reboot Nigeria’s economy, after the harsh effects of the COVID-19 pandemic. So, expectations are high from Nigerians that politicking, as it is usual with budgets in the house, may be take a back seat, when consideration of the bill commences at the committees’ level. How fast and the form the consideration will take remain questions to be answered by actions of the house in the coming days.

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