Analysts believe that, technically, no budget has been signed since some conditions were attached and the document sent back to the National Assembly for alteration. That the Federal Ministry of Finance also failed to provide a breakdown of the “signed” budget also points to the fact that the “signing” was merely cosmetic. The president signed the budget in secret, defying the known tradition of previous years when it was done in full public glare, fuelling suspicion that the budget may not have been signed.
The suspicion is further fuelled by the failure of the finance ministry to make available a breakdown of the signed budget unlike in the past when details of the signed budget were readily available to allow for public analysis. According to Wale Abe, chief executive officer of the Financial Market Dealers Association of Nigeria (FMDA), signing a public document like the budget of the country behind closed door means that the budget has not been signed.
Okechukwu Unegbu, former president of the Chartered Institute of Bankers of Nigeria (CIBN), said that, as it were, there is no way anybody can implement such a budget.
Samir Gadio, a London-based emerging markets strategist with Standard Bank, said the final shape of the 2013 Appropriation Bill will hopefully be made public in the near future.
LEADERSHIP gathered that the decision to keep sealed lips over the breakdown is not unconnected to the grey areas identified in the budget approved by the National Assembly (NASS).
An inside source at the Ministry of Finance told LEADERSHIP that the executive has decided not to accept the major alterations made to the 2013 budget by the NASS. Among the areas of disagreement between the executive and the legislature are the inclusion of constituency projects in the budget and the provision of zero budget for the Securities and Exchange Commission (SEC).
Accordingly, it has decided not to make the breakdown public until the differences are sorted out.
The president signed the budget in the understanding that that the Act is to be further referred to the National Assembly for amendment to accommodate some of the hitherto grey areas that the two parties had reached consensus on.
While President Jonathan sent a budget of N4.92 trillion to the National Assembly for approval last October, the National Assembly returned an approved budget of N4.98 trillion, that is, N63 billion higher.
Sketchy highlights of the signed budget gleaned by LEADERSHIP indicated that the National Assembly had increased statutory transfers from N380.02 billion proposed by the executive to N338.97 billion. Also the capital expenditure was jacked up from N1.54
trillion to N1.62 trillion while the recurrent expenditure was reduced from N2.412 trillion proposed by the executive to N2.38 trillion, indicating a difference of N26 billion. Only the provision for debt service was left untouched at N591.76 billion.
Gadio said, at this stage, it appears that the National Assembly has been successful in raising the oil price benchmark to USD79 per barrel versus USD75 per barrel in the draft put forth by the finance ministry. This is consistent with the multi-year stance of parliament which has typically sought to impose a more expansionary fiscal stance than that proposed by the government.
“There are few countries in Africa where parliament systematically pushes spending up, even though it is controlled by the same party that won the presidential contest,” said Gadio.
In this context, one can understand why the MPC of the CBN recommended creating an independent body that would set up the oil price benchmark based on tangible economic fundamentals and oil price projections.
An upward trend in the oil price benchmark in coming years would be problematic not only because the oil price is unlikely to increase sizeably from current levels, but also given that the effective fiscal breakeven point has generally been much higher as illustrated by the modest accumulation of Excess Crude Account (ECA) proceeds (only USD9.2 billion [3.5 per cent/GDP]).
In solving the benchmark puzzle, Unegbu wondered how a board which will not implement the budget of a company force on the managing director what the budget midget must be.
Abe said the only thing the National Assembly could do is to ensure close monitoring of budget implementation.
Gadio went further to say that the reality is that the budget of the federal government is only a part of the fiscal puzzle in Nigeria.
What really matters is the federally consolidated fiscal position at the three-tier level (including the budget of the federal government and states) that also factors in above-the-line expenditure and the balance of the excess crude account. This aggregate approach would be in line with international best practice since one would be able to compare Nigeria’s overall revenue as a country (rather than federal government revenue) with total public expenditure across the board.
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