Punch Needless standoff on 2013 budget JULY 23, 2013 BY PUNCH EDITORIAL BOARD AS the National Assembly reopens the controversial debate on the 2013 Appropriation Act amendment this week, it is hoped that the unnecessary standoff between the Executive and the National Assembly will soon be resolved. When President Goodluck Jonathan presented the 2013 budget proposals to the parliament on October 10, 2012 for consideration, the move raised a ray of hope that the document would be expeditiously passed. It appeared then that both the executive and the legislative arms of government were coming to terms with the strategic importance of early budgeting to the national economy. But more than halfway into its lifespan, it is worrying that our politicians are still bickering over the 2013 budget. This should not to be so. Good government does not run itself – it must be managed. And a budget, as a process, a statement of goals, a policy instrument, and a managerial tool, is perhaps the most important tool for national economic management. At stake now again is an amendment to the Appropriation Act sent to the National Assembly in March. Jonathan proposed four amendments to clauses 6 (ii), 7, 9 and 10 of the document. He also asked the parliament to restore the N72 billion the lawmakers cut from the budget and moved to other sub-heads, different from what the executive proposed. But the lawmakers returned the budget to the executive last month without passing the amendments, insisting that the President was wrong by asking them to amend the law, when he should have brought a supplementary bill to the parliament to correct the situation. Finance Minister, Ngozi Okonjo-Iweala, had confessed that the economy was facing challenges with dwindling oil revenues and lower receipts from Customs duties. She attributed the financial crisis to the problem of pipeline vandalism, crude oil theft and frequent shutdown of oil pipelines by oil firms, as well as the reduction in Nigeria’s oil exports to the United States, owing to the discovery of shale oil by our major crude oil buyer. Even without revealing that the Federal Government might not be able to pay workers’ salaries beginning from September if the amendments to 2013 budget were not passed immediately, these economic realities should have prompted our federal lawmakers to a serious belt-tightening budget amendment. Okonjo-Iweala said on July 1, “At some point, we will need the amendments to pass because, come September, October, we may not be able to pay salaries. We will need to restore (the sum of) N32 billion for salaries that was moved around (in the budget); we will also need to restore the SURE-P money, which is experiencing some difficulties now.” The executive and parliament are to blame for allowing their personal interests to becloud the larger interests of the nation. The needless budget standoff actually started when the President initially submitted the proposals to the lawmakers. While the executive pegged the oil benchmark at $72 per barrel – an increase of $3 per barrel over the 2012 estimate – the lawmakers insisted on $79 per barrel. Both parties should begin to see budgeting as a developmental tool, rather than a political contrivance for sharing the national cake. The sticky points for the legislators are constituency projects and their obscene allowances. As usual, the emoluments of our notorious lawmakers top the chart of 28 countries with $189,500 or 116 times of the nation’s Gross Domestic Product per person in a report, “Paying lawmakers”, published by the influential magazine, The Economist, this week. This is unequivocally awful. This fat pay must be cut drastically. As is done in other climes, parliamentarians can get their constituency projects executed by lobbying the executive, which is authorised by law to prepare the budget, long before the document is publicly presented. This is reasonable and it saves everyone the headache of economic upheavals. The ones for the executive are bloated recurrent expenditure and corruption. The Federal Government has achieved a recurrent to capital expenditure mix of 65 per cent to 27 per cent with 7.5 per cent as statutory transfer, in its budget performance in the first quarter of 2013. But it should do more in line with global and domestic economic realities as painted by Okonjo-Iweala in March. According to her, the international natural resources map is changing. “There have been discoveries of new oil and gas deposits in many African countries, as well as the discovery of shale oil and gas in the US. These developments suggest that there could be lower demand for Nigeria’s crude oil in the (near) future, and thus we should be even more prudent in managing our natural resources today!” The sad truth is that graft is bringing the economy to the edge of ruin. Jonathan must stop the slide. The executive should also clamp down on oil thieves. Nigeria loses at least 150,000 barrels per day to thieves, costing the economy $6.1 billion or N965 billion annually in revenue. Henceforth, budgeting should be taken more seriously. Nigeria should copy the best-practices elsewhere. The British Chancellor of the Exchequer, George Osborne, presented the 2013-2014 financial outlay to the House of Commons on March 20, while President Barack Obama presented the 2014 US budget of $3.77 trillion to the American Congress on April 10. This early presentation allows for extensive work to be done, especially in the area of citizens’ participation, before the document is passed.
Posted on: Tue, 23 Jul 2013 07:35:53 +0000