Supplementary budget: Buhari, NASS head for showdown over N228.8bn request

…President seeks lawmakers’ approval of N242bn for 2019 polls
…Dogara laments mystery surrounding recovered loots
…NECA decries N2.2trn debt service provision in 2018 Budget
Controversies have continued to trail the 2018 budget as President Muhammad Buhari on Tuesday requested the National Assembly to approve through virement and supplementary, a total sum of N 228,854,008,215 to be deducted from the N578, 319,951,904 allocated for 1,403 projects by the National Assembly in the budget.

Apparently drawing another round of face-off, the president requested the Senate to fund the N164,104,792,065.00 2018 supplementary budget for the conduct of the 2019 election which is part of the total N228, 854, 008, 215, from money he alleged was inserted in the 2018 budget by the legislature.

This request, no doubt, is a considered means of getting back to the National Assembly for infringing on the appropriation bill as proposed by the executive and subsequently making provisions for 1,403 projects at a total cost of N578, 319,951,904.

Apparently exposing the National Assembly to the Nigerian public, the president in a letter read at plenary, asked the Senate to consider, “in the national interest, reallocating some of the funds appropriated for the new projects which were inserted into the 2018 Budget proposal totaling N578,319,951,904 to cover the sum of N228,854,008,215 required as noted above.

A schedule setting out a comprehensive list of these inserted projects is attached to this letter for ease of your consideration”.

Justifying his request, Buhari said, “implementing a budget of N9.12 trillion for 2018 will be extremely challenging and therefore, I do not consider it expedient to propose a further increase to the size of the 2018 Expenditure Framework to fund these very important and critical expenditure items”.

The president said: “In the light of prevailing fiscal constraints, I am proposing that the sum of N164, 104,792,065.00 be provided for through virement or supplementation of the 2018 budget.

I propose that the balance of N78, 340,530.535.00 mostly related to personnel allowances, fueling and other costs not required until the election proper, be provided in their 2019 budget”.

A summary of the N242,445,322,900 proposal for the 2019 General Elections indicated that the INEC gets a total N143,512,529,455 from 2018 supplementary and N45,695,015,438 from 2019 budget; Office of National Security Adviser gets N3,855,500,000 from 2018 supplementary and N426,000,000 from 2019 budget;

Department of State Security gets N2,903,638,000 from 2018 supplementary and N9,309,644,455 from 2019 budget; Nigeria Security and Civil Defence Corps gets N1,845,597,000 from 2018 supplementary and N1,727,937,500 from 2019 budget;

Nigeria Police Force gets N11,457,417,432 from 2018 supplementary and N19,083,900,000 from 2019 budget and Nigerian Immigration Service gets N530,110,178 from 2018 supplement and N2,098,033,142 from 2019 budget.

He said the allocation became imperative to ensure that adequate arrangements are made for free and fair elections as it has become necessary to appropriate funds to enable the relevant agencies to commence preparations.

President Buhari also requested the reinstatement of money cut from the initial proposal.

He said: “You will also recall that when I signed the 2018 Appropriation Act, I indicated the need to request the reinstatement of certain cuts made to certain critical projects provided in the original Executive Bili.

I am therefore submitting for your consideration the reinstatement of the most critical of such cuts totaling N164, 749,216,150, which are summarized in page 1.

“The total amount required to be provided for in the 2018 budget for the 2019 General Elections and to restore the identified critical projects to the amount earlier proposed is therefore N228,854,008,215”.

The Daily Times recalls that the President recently raised certain issues while appending his signature to the N9.12trillion 2018 budget which was jerked by N578, 319,951,904 from the initial N8.6trillion proposed by the executive.

Meanwhile, Speaker, House of Representatives, Hon Yakubu Dogara, has bemoaned the confusion, lack of transparency and mystery surrounding recovered looted public funds estimated at over $2 trillion and other assets by the Federal Government.

He said that the National Assembly will not continue to look on as confusion trails the recovery of looted funds and assets.

The speaker said this on Tuesday at a public hearing held by the House Joint Committee on Public Accounts and Finance on the need to ascertain the status of recovered public funds and assets from 1999 to date.

He said, “It is common knowledge that there are a lot of conflicting reports and claims from various agencies of government concerning the status of the funds and assets recovered from some citizens and corporate entities by law enforcement agencies.

“As a parliament, we cannot fold our arms and allow the confusion trailing the whereabouts of the recovered funds and assets to continue.

“This is why the House of Representatives resolved to mandate this joint committee to investigate the issue in the interest of accountability and transparency.

He added that the investigation has become necessary in order to ascertain how the recovered resources are being appropriated, and that it is in line with the duties of the National Assembly as stated in the constitution.

The speaker further said that as a parliament, “we owe the people of Nigeria the duty to ascertain the resources available to government and how they are being appropriated in their interest.

“This is in line with the exercise of our constitutional powers in Sections 88 and 89 of the 1999 Constitution (as amended),” he added.

He also urged stakeholders present at the hearing to be patriotic, truthful and honourable in their submissions, just as he charged the joint committee to handle the investigation with utmost seriousness as it is capable of eroding the credibility of the present administration.

The total value of recovered funds and assets is estimated at $2 trillion and the House has also mandated its Committee on Financial Crimes to investigate whether any crimes have been committed in the course of the management and disbursement of funds recovered by the federal government in the last 12 years.

In a related development, the Nigeria Employers Consultative Association (NECA) has raised concerns over the high debt service provision of N2.2 trillion, which represented the third largest component of the 2018 expenditure framework.

In his presidential address delivered at the 61st Annual General Meeting (AGM) of NECA in Lagos on Tuesday, the NECA President, Mr Larry Ettah, said the recently passed national Budget showed that the debt service provision N2.2 trillion, represented 24.17 per cent or approximately a quarter of the entire budget of N9.12 trillion.

He explained that the N2.2 trillion cost of debt servicing is about 30.76 per cent of total expected revenue of N7.1 trillion, indicating that debt service may soon be back to the pre-debt relief period.

According to him, the capital vote (inclusive of transfers) of N2.87 trillion is just a little higher (31.50%) than debt service.

He said, “We are very worried that for the third consecutive year, the rising cost of debt servicing is in the top three allocations in the national budget.

In the last three years, the government has had a budget of about N18.012 trillion (2015:4.493 trillion, 2016: 6.077 trillion and 2017: 7.441 trillion); of which debt service alone took an average of 23.71 per cent, more than one-fifth – N18.012trillion, leaving N13.741 trillion for recurrent and capital expenditures.”

He added that the national budget as recently passed showed that recurrent expenditure as a percentage of total Federal Government expenditure stands at a staggering 68.50 per cent, an increase from 68.27 per cent in 2017.

He stated that the expenditure pattern is not healthy as it shows a clear indication that the government is yet to accord the issue of infrastructure improvement it deserves through adequate fiscal support.

The NECA boss emphasised that the debt service provision, including a sinking fund of N2.2 trillion, is the third largest component of the 2018 expenditure framework representing 24.17 per cent.

He said it represents a quarter of the entire budget (N9.12 trillion) indicating that debt servicing may soon be back to the pre-debt relief period.

Ettah reiterated that the debt level as a percentage of the GDP seems in order but considering the debt to revenue ratio, it is unhealthy and not sustainable.

He advised the government to tame its appetite for more leverage as the World Bank in its recent Global Economic Prospects Report had noted with dismay that the current optimism over the country economic is tempered by concerns over huge debt servicing obligations and continuous foreign exchange controls.

Ettah disclosed that the cost of serving the country debt on both the domestic and external fronts has risen in contrast to the revenue earned by the government and the bigger concern is the possible unsustainable debt servicing,

adding that ”while the debt servicing costs in other economies remain sustainable, that of Nigeria is being dragged down by Naira depreciation and increased recourse to non-concessional borrowing for infrastructure development ”

He urged the government to improve its non-oil revenue generation, as it is the most realistic way to reduce the debt service as articulated in the Economic Recovery and Growth Plan (ERGP).

The NECA boss also cautioned the government not to raise revenue by increasing the tax rate for organised businesses and the working class but alternatively expand the tax net by bringing more people into it.