Summary of the 2016 Budget

Lawmakers have retained the N500 billion intervention fund for the poor in this year’s N6,077,680,000,000 budget.
The Muhammadu Buhari administration plans to dole out N5,000 to the poorest in the land and feed school pupils, among its populist programmes.
But the National Assembly yesterday passed the 2016 controversial budget with a reduction of over N17 billion.
President Buhari on December 22, last year presented to the joint session of the National Assembly an Appropriation Bill of N6,077,680,000,000 for consideration and passage into law.
The lawmakers passed N6,060,677,358,227 as the 2016 budget, slicing off N0,017,002,641,773.
Passing the budget, the House of Representatives gave a proviso that Section 318 of the constitution must be strictly adhered to.
Section 318 stipulates that the Appropriation Bill will run for 12 months, starting from the date it is assented to.
While considering the bill for second reading at a plenary chaired by Speaker Yakubu Dogara, the lawmakers said the Excess Crude Account is unconstitutional and should no longer be operational.
The budget oil benchmark is $38. Oil has hit $41, the highest in months.
However, the mood of the lawmakers was difficult to guage when the item for N100b Constituency project came up for approval.
The lawmakers also questioned, through loud murmurs, when an item N3.43b Bulk Trader, in addition to N10b Sinking Fund came up for adoption.
Senate Committee on Appropriation Chairman Mohammed Danjuma Goje, who presented the report of his committee, noted that in view of the revenue and general economic challenges confronting the country, “the committee has, in a landmark decision not witnessed since the advent of the present democratic dispensation in 1999, reduced the size of the aggregate expenditure and consequently reduced the total recurrent, deficit and borrowing plan.”
Part of the highlights of the budget as passed include Aggregate Expenditure N6,060,677,358,227; Statutory Transfers N351,370,000.000 (retained); Debt Service N1,475,320,000,000 (retained); Recurrent Expenditure reduced from N2,648,600,000,000 to N2,646,389,236,196; Capital Expenditure also reduced from N1,845,540,000,000 to N1,587,598,122,031; Fiscal Deficit N2,204,936,925,711.16 and Deficit/GDP 2.14%.
The same benchmark of $38pb was proposed by the Executive.
The Executive proposals of crude oil production of 2.2 million barrels per day and an exchange rate of N197 to $1 were also adopted
The committee observed that the late presentation of the budget affected its timely passage.
The committee also said that the 2016 Appropriation Bill, after its presentation to the National Assembly, was seen to be “fraught with some inconsistencies from ministries, departments and agencies, given the subsequent reference by them to different versions of the budget”.
Goje, who said that the inconsistencies in the fiscal document were also noticed at the level of the sub-committees, described them as “strange and goes against proper budgetary procedures and processes with attendant implications”.
The committee chairman told the Senate that they observed 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 of the economy.
Goje said: “The 2016 (Appropriation) Bill seeks to stimulate the economy by the recurrent expenditure as compared to the capital component at a ratio of 30:70% is still very high. This takes away from the infrastructure-stimulus funding that the country so desperately needs for development.”
He noted that the Appropriation Bill contained some omissions, particularly in personnel cost.
Goje added that “though the Appropriation Committee has filled some of the gaps, there are many outstanding cases which could raise serious concern in the course of the year”.
The committee recommended, among others, that subsequent budgets should be submitted in strict compliance with the provisions of the Fiscal Responsibility Act to enable the National Assembly conduct proper engagement and to conclude the budget in good time.
The committee also said that there should be proper engagement in future between the Budget Office and MDAs on the budget contents to avoid what appeared to be a disconnect between them in the processing of the budget proposals.
Goje specifically referred to a situation where some MDAs disowned their budget before the Appropriation Committee.
Some statutory transfer allocations include National Judicial Council N70b; Niger Delta Development Commission N41,050b, Universal Basic Education N77,110b; National Assembly N115b; Public Complaints Commission N2b, Independent National Electoral Commission N45b and National Human Rights Commission N1210b.
Debt Service: Domestic debts N1,307,400,000,000 while N54,480,000,000 was allocated for Foreign Debts Service.
Presidential Amnesty Programme stipends and allowances of 30,000 Niger Delta ex-militants was allocated N7,875,000,000, Presidential Amnesty Programme operational cost N1,834,149,261 and N10,290,850739 was voted for Presidential Amnesty Programme reintegration of transformed ex-militants.
Other allocations: Ministry of Agriculture N46,175,963,859; Ministry of Defence N130,864,439,542; Ministry of Education N35,433,487,466; Ministry of Health N28,650,342,987, Ministry of Information and Culture N6,071,503,956; Ministry of Interior N61,713,279496; Ministry of Justice N879,736,744; Ministry of Solid Mineral Development N7,332,623,257; Ministry of Niger Delta N19,440,328,551; Ministry of Transportation N188,674,679,674; Ministry of Works, Power and Housing N422,964,928,495.
Senate President Bukola Saraki remarked that there was no bickering over benchmark.
He noted that the budget “reflects efficient and equitable allocation of resources to reduce the challenges that we are all aware of”.
“The budget is now a product of bipartisan engagement, commitment and one that is broadly nationalistic”.
“It gives me great joy to commend and appreciate all the efforts that you have all put in . It is the duty of the executive to ensure full implementation of this budget as part of the campaign to bring succuor to our people.
“While implementing, we charge the executive also to consider the areas of supporting locally produced products in order to help our economy.
“We have all seen the earlier hiccups in the beginning of the budget and we hope that by the time we are about to get the 2017 budget, the agencies and the budget office would improve their level of interaction and government itself would bring the budget much earlier to give ample opportunity. It is very important that we do this.”
“Nigerians have been waiting for us to pass the budget. I think at this time too, the implementing agencies should ensure that they get to work quickly in implementing the budget.”
Deputy Senate President Ike Ekweremadu said: “I am a bit worried about the observation made by Goje as contained on page five of the report, which says the 2016 Appropriation Bill contained a number of omissions particularly in the area of personnel cost.
“Though the Appropriation Committee has filled some of the gaps, there are many outstanding cases which could raise serious concern in the course of the year.
“The executive presented what we considered as proposal and so the ultimate responsibility for this budget rests on us the members of the National Assembly.
“If there are mistakes on the part of the executive, it ends at the point they presented the budget. If anything happens after that and we pass the budget, we cannot blame them any longer.
“I therefore want to know what these outstanding cases are because it appears that it is in relation to personnel cost.”
Goje said: “This budget exercise was full of negotiations, going forth and back. When the budget was presented as attested by many committees, there were shortages discovered, including personnel cost in various committees, and the total amount involved was presented to the executive and in the course of our interaction with the budget office we presented the shortfalls for personnel and other overhead costs, which we believe was being taken care of.
“Somehow they did it halfway, so since they did it halfway, we also did it halfway but for critical organisations, most of them were satisfied.”
“We still have pockets, few that we believe will have some problems and the Budget Office confirmed to us that they may come with something to make it up.
“Because this budget is full of controversy, we didn’t want to add more controversy. If we add more controversy, the report wouldn’t have been submitted now and the National Assembly will be blamed for delaying this budget.
“That is why we did everything possible to ensure that we beat the deadline instead of continuing back and forth and Nigerians will not understand; they will say the National Assembly is playing politics with this budget, meanwhile we are doing everything possible to ensure that the budget is as implementable as possible.”
Defending the budget work at a news conference, the joint Appropriation Committee said almost all parts of the bill presented to the National Assembly were tinkered with, except President Muhammadu Buhari’s N500b intervention programmes.
Goje said: “We did not tinker with it; nobody asked any questions; we just approved it because we believe, the interventions can touch the lives of Nigerians.”
Goje also disclosed that when calculated, what was passed yesterday was N1.05 trillion as the capial component of the expenditures of some agencies in the Presidency were not available to the Committee.
“When the capital component of the expenditure of all those Commissions are added, then it will amount to N1.060 trillion,” he added.
Abdulmumin Jibrin, Chairman, House Committee on Appropriation said it was the first time since 1999 that the country has witnessed a reduction in aggregate expenditure.
He said though the budget estimate is huge, contrary to widely held belief that the National Assembly would add to it, the reverse was the case as N17b was reduced from the initial estimate.
“We all know the challenges that accompanied this bill and often times, with overheads being most contentious.
“We engaged the Executive and the Budget Office on it because we also discovered that several critical items that were not in the budget. We had to allocate funds to those areas.
“We also have to tilt some allocations in favour of security, anti corruption drive in order to strike a balance with the policy thrust of the government”.
The Committee however enjoined Nigerians to focus less on the padding controversy. “Don’t concentrate on how the padding issue was resolved but on light at the end of the tunnel.
“This is because we cleaned it up and we believe that most of these problems won’t occur again in future. For the fact that this is a transitional government from one political party to the other, this should not be too strange. We are sure this will not occur again,”Jibrin said.

The Nation

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