Minister of Finance, Mrs Kemi Adeosun has said that due process has been the guiding principle in government’s releases of approved allocations in the budget to ministries, departments and agencies (MDAs).
The minister, who spoke through a statement by her spokesperson, Oluyinka Akintunde, was reacting to allegations that annual budgetary releases to MDAs usually take long because they have to ‘lobby’ top officials of both the Finance Ministry and Office of the Accountant-General of the Federation.
“From our findings and investigations, we have no such claims before the Federal Ministry of Finance and Office of the Accountant General of the Federation.
”Budgetary releases are (sent) automatically to the MDAs’ accounts without any interface with officials of the FMF and OAGF. Due process is the only guide to all releases of budgetary allocations to MDAs,” Mr Akintunde explained in a statement.
Review of 2017 budget performance
A review of the 2017 budget performance showed total releases for capital expenditure for the year at about 47 per cent, against 2016 performance of about 58.7 per cent and 2015 figure of 34.94 per cent.
The Minister of Budget and National Planning, Udoma Udoma, said funding of projects by the government would henceforth be on “Project-Based Release System, or targeted releases to critical ongoing infrastructural projects, such as power, roads, rail, and agriculture, to curb waste of public funds by MDAs.”
He said part of the requirement for capital releases to MDAs was evidence of compliance with the provisions of the Bureau of Public Procurement Act.
Mr. Udoma’s spokesperson, Akpandem James, had stated that the government’s handling of budget releases to MDAs ”does not leave any room for lobbying any official, whether in the Ministry of Finance, Budget & National Planning or Office of the Accountant-General of the Federation”.
Zero-based budgeting system
He said under the “zero-based budgeting system” adopted by the present administration in preparing annual budgets, MDAs are mandated to justify all releases, by retiring them before receiving the next allocation.
He however noted that some MDAs often defied this regulatory requirement by refusing to comply, resulting in the release of their next allocation being delayed.
“These releases are not done arbitrarily by the Ministry of Finance. There is a standard template to follow. When all regulatory conditions are met, approved allocations are transferred electronically to designated MDAs’ accounts. There is absolutely no room for lobbying of any official,” Mr. James explained.
Processes for MDAs to follow
The General-Secretary, Nigeria Labour Congress, Peter Ozo-Eson, said there are established processes for MDAs to follow for their releases of budgetary allocations, either quarterly or monthly based on when funds become available.
Mr. Ozon-Eson said he had no direct evidence of lobbying of government officials by MDAs to get their budgets released, saying ”it would be unfortunate if that happens.”
Rather, he said priorities are always determined long before the budgeting process is completed, with releases based on assessment, set timelines and milestones in line with established financial regulations.
For Lead Director, Centre for Social Justice (CSJ), Barrister Eze Onyekpere, delays in releases of budgetary allocation to MDAs is a tricky issue, beginning from the revenue forecast to inclusion of projects and programmes in the budget.
Mr. Onyekpere said the government’s revenue forecast over the years has always been overly optimistic, with revenue projections hardly met, thus ending with deficit revenue bases to execute projects.
He cited the example of the government basing part of its 2017 and 2018 budget on expectation of recovery of N500 billion debts from looters of public treasury.
“If the monies expected to be recovered do not materialise, government is in trouble. If revenue projections do not add up, the executive would be left with a ‘secondary power of appropriation’ to decide on the expenditure, by picking and choosing projects to accord funding priority.
“Once the situation confers on the executive the discretion of an approving authority outside the National Assembly without clear parameters for its exercise to determine how to prioritise releases or not, the MDAs would have to lobby for their budgets,” Onyekpere said.
He further pointed out that achieving 100 per cent budgetary releases was not easy, as money is not always available.
Onyekpee therefore advised the government to set clear parameters on how to prioritise releases where funding is insufficient, by following the fiscal scale risk appendix as provided in Section 19 (f) of the Fiscal Responsibility Act to avoid lobbying.