NASS Slashes 2016 Budget By N17bn
Exactly 93 days after President Muhammadu Buhari presented the 2016 budget proposal to the joint session of the National Assembly, the Senate yesterday approved a total aggregate expenditure of N6,060,677,358,227 trillion for the executive to spend this year, 2016.
The president had presented a total budget estimate of N6, 077,680,000,000. Of the total sum, N351,270,000,000 was for statutory transfers, N1, 475,320,000,000 for debt servicing, N2,648,600,000,000 for recurrent (non-debt), while the sum of N1,845,540,000,000, inclusive of N157,150,000,000, was for capital expenditure in statutory transfers and N86,000,000,000 was for interest on capitalised loans.
Section 80 subsections 1, 2 and 3 of the 1999 Constitution, as amended, however, gives the National Assembly the powers to approve all money Bills, including annual budgets for the spending of the executive.
The Appropriations Act, Fiscal Responsibility Act of 2007 and the 1999 Constitution also allow the National Assembly to effect an upward or downward review of estimates laid before the National Assembly by the executive.
According to the highlights of the budget, as scaled down and passed yesterday by the Senate, the aggregate expenditure is N6,060,677,358,227; statutory transfers, N351,370,000.000; debt servicing, N1,475,320,000,000; recurrent expenditure, N2,646,389,236,196 trillion; capital expenditure, N1,587,598,122,031trillion; fiscal deficit, N2,204,936,925,711.16, with a deficit/GDP of 2.14%.
However, the chairman of the Appropriations Committee, Sen Danjuma Goje (APC, Gombe) while leading debate on the estimates, said his committee lamented the late presentation of the 2016 budget estimates as it affected the timely passage of the Bill.
He observed that the 2016 Appropriation Bill, after its presentation to the National Assembly, “was seen to be fraught with some inconsistencies from MDAs, given the subsequent reference by them to different versions of the budget. This was also noticed at the level of the sub-committees. This is strange and goes against proper budgetary procedures and processes, with attendant implications.”
Goje observed further that “the available revenue for appropriation was grossly inadequate to meet the huge demand of MDAs to prosecute needed programmes for national development across all spheres in the economy”.
He, however, remarked that “the 2016 Appropriation Bill seeks to stimulate the economy but the recurrent expenditure as compared to the capital component at a ratio of 30:70% is still high. This takes away from the infrastructure-stimulus funding that the country so desperately needs for development.”
He also warned that certain issues around salaries and allowances of staff at the MDAs of government be addressed subsequently by President Buhari.
“The 2016 Appropriation Bill contains a number of omissions, particularly in the area of personnel cost. Though the Appropriations Committee has filled some of the gaps, there are many outstanding cases which could raise serious concern in the course of the year”, he noted.
The Committee of Appropriations thereby recommended that “subsequent budgets should be submitted in strict compliance with the provision of the Fiscal Responsibility Act to enable the National Assembly conduct proper engagement and to conclude the budget processes in good time”.
The Committee warned that “there should be proper engagement in future between the Budget Office of the Federation and the MDAs on budget contents in order to avoid what appears to be a disconnect between them in the processing of budget proposals. This will also ensure that the Budget proposal between the two parties is in harmony”.
Goje, on behalf of the Committee, warned that government must endeavour to increase and diversify its revenue generation streams, given the yawning gap between collectible revenue and actual collections.
“Recurrent expenditure relative to capital expenditure should be driven down. Such a ratio in favour of an increased capital expenditure profile will ensure that the capital thrust of the budget is delivered to the Nigerian people.
“From the 2017 fiscal year, government should endeavour to shore up capital expenditure by substantially reducing recurrent expenditure. This is the only way to free up resources for critical infrastructure towards economic growth and development,” he advised.
The Senate Committee said in view of the economic difficulties, the Senate “reduced the size of the aggregate expenditure and consequently reduced the total recurrent, deficit and borrowing plan”.
Besides being the bulkiest budget to be passed for presidential assent since 1999, it remains the most controversial.