Golu: Passage of 2018 budget in December impossible
Chairman, House of Representatives’ Committee on Legislative Budget and Research, Timothy Golu, in this interview with ADAMU ABUH, ruled out the possibility of passing the 2018 budget by December this year.
What progress has been recorded so far with the Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP)?
The Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF-FSP) was presented to us in the National Assembly by Mr. President, on the 18th day of October 2017, and the Speaker of the House of Representatives, Yakubu Dogara, who announced the receipt of the document, directed relevant committees – Finance, Appropriation, Aids and Loans, and my committee- Committee on Legislative Budget and Research to sit down and work on the document. We expected the document long before now, precisely in August, so that by October or November when the budget would have been presented, we would have gone very far in the analysis of the MTEF-FSP so that as the budget comes in, we would have had an insight into it, especially the revenue profile that is expected vis-a-vis the expectation of oil production, the exchange rate, and the oil price benchmark. But the executive did not submit it until recently, and they were also supposed to present the budget just days after. You can imagine the National Assembly receiving the documents within a few weeks. That would definitely not be too good for the National Assembly because it would not give us enough time to compare and contrast, discuss and analyse the budget based on the MTEF-FSP.
Is the action of the executive in tandem with the Fiscal Responsibility Act?
Most of the things the executive does fall short of the provisions of the Fiscal Responsibility Act. If we do not insist on procedures and timelines, we would not have a budget; we would not have some policies in place and Nigerians would not be happy with us. The executive would always delay the budget, and would always work outside the provisions of the law. This is why most times we have problems with the executive. The same executive is even supposed to present the performance of the previous budget before submitting the next budget, but it has not been doing it.
Why are there delays in the presentation of the MTEF-FSP, budgetary proposal to the National Assembly?
It is the executive’s problem. Our own is to get the MTEF-FSP early enough so that we can also work towards passing the budget early enough. There is nothing new in the entire thing because there is no budget that is divorced from the previous one, as all budgets are tied to one another. Even if it is another government taking over, it is the same document, the same projection, so, it is not something strange. We just concluded the previous budget that was based on an oil production of two million barrels per day, and on an amended exchange rate of N305 to $1. In fact, it was pegged at N190, which was completely out of reality. So, the executive moved it to N305 because the exchange rate of the dollar at that time was above N500, and then a benchmark of $42.5 per barrel. It was the National Assembly that upped it by $2, to $44.5 last year. So, it would have been easier for the executive to say, going by the performance of last year, what was the performance of the production level? Is it okay? It was even above what the executive projected because it projected two million barrels per day. And now it is projecting 2.2 million barrels per day, which means that the performance was good. We got the amount of oil needed to generate the amount of money that was needed to generate monies to fund the budget, and augment the deficit and so there was no problem with that. The benchmark too we upped from $42 to $44 and the executive maintained our own position, which means that it was left for the National Assembly to either sustain it, or look at the realities on ground to, may be, up it again so that we can have funds because going by the performance of the oil market and the performance of the production, we are definitely going to look at the possibility of upping it again. This means that we want to have enough funds so that we can take care of some other exigencies like security and infrastructure etc.
The price of oil has never come down below the benchmark. In fact it has gone above $50, which means that by now, there should be enough money in the Excess Crude Account of the Federal Government. The executive is supposed to tell us all these things even before we start looking at the budget. As it is now, we are not aware of how much is it in the Excess Crude Account.
How would you grade the implementation of the 2017 budget?
That is the problem we have now because the 2017 budget is yet to be implemented in earnest. Now, it is even not feasible because with two months to the end of the year, what are they going to implement? The Minister of Finance is saying that they are going to roll over 60 per cent of the budget to next year, which is not a good story. This is not good for us because it means that some projects would suffer; it means that there would be no implementation of some projects; it means that 2017 budget is going to be implemented below the required level, which is not good.
The executive talked about releasing monies for capital projects up to N450b, but the capital component of the budget is supposed to be about 30 per cent of N7 trillion. So, we are not anywhere near implementation of the 2017 budget. At this point, even the earlier releases they made, I do not know whether they have cash-backed it because that is another terminology. To release fund is different from cash backing it. Now, almost all the MDA’s are saying that only 10 -15 per cent of funds have been given to them, out of all these funds that the Minister of Finance kept talking about. If this is to mobilise contractors, what of the administrative cost that would be incurred as a result of this mobilisation? What are they waiting for?
As a person, I know that funds are available because if we can get 2.2 million barrels per day from the time we passed that budget in 2016 (at an exchange rate that was higher), then we should have enough funds. We have recovered monies from different sources, looted funds are being recovered through the anti-graft campaign, and they have also been borrowing. So, why the complaint about funds? I think the entire thing is slow because the ministry itself is slow, and the Minister of Finance, the Minister of Budget and National Planning lack the synergy required to implement the budget, and they are not helping Mr. President to implement the budget.
What do you make of the approval sought by the Presidency to access foreign loans to fund the budget?
It is not enough for the executive to just bring in requests for loans, and then we just consider them. We need to look at the viability of the loans. That is what the constitution provides. Apart from representing the people, we are also part of government, we know what is happening. However, if we are to approve, how are we going to pay the money back? What are we going to use the money for? Let us not tie the country’s neck in the event we could not clear the debt on time because it could affect the development process of the nation. So, on the approval sought by Mr. President for the loan, we are not rejecting it, but we are also not automatically accepting it. Therefore, we need to sit down and analyse them, already the relevant committees have started sitting down to consider loans requests from other states. Those on merit have been approved, and those that do not deserve it have not been approved.
Is resetting the 2018 budget life span to run from January to December feasible. How will it be?
In fact, it is not possible. Personally I don’t see it happening. We are in November already, so we have a month to go. So, I ask, how are you going to implement it to revert back. Even when you roll over 60 per cent from 2017 to 2018 budget, what magic are you going to perform to reset the budget life span? If they want to achieve such target, they should accelerate action in the implementation of the 2017 budget, which we passed since May this year, and yet no implementation, so how are they going to revert to it? The executive just submitted the MTEF-FSP recently and are planning to bring the budget within a span of just days. As we speak we are amending the Procurement Act. Before we finally get that done, let us also out of understanding, and the Doctrine of Necessity put some things in place. Even as it is now, assuming the lifespan of the 2017 budget is May next year, they would not be able to implement the projects before May next year if they don’t release fund before the end of this year. I say so because there are projects that cannot be executed during the rainy season.
To what extent is the non-implementation of the 2017 budget affecting the citizenry?
It is affecting the way money is circulating; it is affecting the economy; job creation and wealth creation. There are people that are daily workers that look up to construction activities. If there are no projects, they would not be in business. There are micro industries that are tied to the macro ones that have to do with the construction industry. So, as they do it, it opens up the space for other people’s participation. And a lot of people at that micro level are engaged in wealth creation, job creation more than even those involved at the macro level because there may be one contractor handling a job and then down the line you see that most people are getting jobs. So, if you don’t release funds people would suffer and a lot of nasty things are bound to happen. And once the purchasing power of the people is limited, it affects everything, creates insecurity as people would begin to think of stealing.
Across the country, people go to farms to steal corn that are yet to be harvested. So, if people can go to that extent, that tells you the level of hunger and poverty in the land. But when you implement the budget, it opens up spaces and before you know it people are gainfully employed and they would not do anything untoward. What is happening now regarding the budget implementation is affecting security, unity and peace among Nigerians because people are becoming prone to criminality. We have heard of parents selling children, a particular case is a woman who sold her child for N80, 000, and this ugly incidents are avoidable. The nation is rich and it can afford a conscious planning and engagement of our people. The National Assembly passes resolutions daily for the wellbeing of Nigerians, but some of these MDA’s are not helping matters. They are not helping Mr President to deliver democracy dividends.
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