Mar. 9, 2014
Opposition APC proposes reduction in budget allocations totalling N350 bn to fund capital projects.
Nigeria’s main opposition party, the All Progressives Congress, APC, has asked its members in the National Assembly to block a plan by President Goodluck Jonathan to upgrade facilities at the sprawling Aso Rock presidential villa, and purchase a new aircraft into an already bloated presidential air fleet at a huge N3 billion.
The proposals are part of the 2014 budget currently before federal lawmakers.
The APC also proposed a reduction in spending on about 16 items in the budget, to save N350 billion which should be used to raise capital expenditure and create jobs for Nigerians.
These proposals are contained in the party’s 23-page review report on the 2014 budget titled: “Review of the Draft Federal Budget: APC’s Views on the Federal Government Draft Budget,” exclusively obtained by PREMIUM TIMES.
The 2014 Appropriation Bill, which proposes a total expenditure of N4.62 trillion- a seven percent cut on the 2013 figure of N4.987 trillion- was presented to the National Assembly last December by the Minister of Finance, Ngozi Okonjo-Iweala.
It is made up of N400bn (2013: N388bn) for statutory transfers; N737bn (2013: N592bn) for debt service; N2.385 trillion (2013: N2.419 trillion) for recurrent non-debt expenditure; and N1.245 trillion (2013: N1.589 trillion) for capital projects.
The opposition party had directed its members in the National Assembly to block the passage of the budget and other executive bills in protest against the manner the federal government was handling the political crisis in Rivers State.
The APC, however, said the objective of the review of the document was to guide its members in the National Assembly, who, with cooperation from their like-minded colleagues in the legislature “can restructure and improve the content of the 2014 budget to serve the people of Nigeria, and not the select few that will capture it as currently proposed.”
In the report, the opposition party said the purchase of another aircraft, which would bring the number of aircraft in the presidential fleet to 11 and which would cost the nation N1.5bn; the upgrade of Presidential Villa facilities (N1.5bn) and the construction of a VIP wing at State House Clinic at N0.75bn, all proposed by the federal government, were unnecessary.
The APC also demanded the reduction by N4 billion the cost of the proposed National Conference for which N7 billion was proposed by the government. The party, which had opposed the convocation of the conference, said the provision was excessive because it might achieve nothing.
It further noted that the N7bn was more than what the average federal university gets in one year and about the same as the N8bn budgeted for “National Job Creation Scheme.”
“Reduce the provision for the National Dialogue to N3bn and save N4bn for the capital budget. The provision is excessive. The National Political Reform Conference of 2005 cost N945 million and likely to lead to the same conclusion,” the party said in the report.
Other recommendations made by the opposition party are as follows:-
-Reduce travel budget by 75% and training budget by 50% and save N30bn;
-Reduce security votes in MDAs by 50% and eliminate them in all, but needy ones and save at least N20bn;
-Reduce some of the non-essential recurrent spending listed above and save at least N5bn;
-Reduce the constituency projects’ provision to the 2013 level of N50bn, thus saving N50bn;
-Delete all provision for outsourced services, all administrative charges, and running and ‘verification costs’ for all pensions as they were all provided for in the 2013 budget. This will save about N11bn.
-Deleting all provisions in MDA budgets for contributions to local, state and international organizations, which have been partly duplicated in the service-wide vote. This will save about N3bn;
-Reduce overall provision for monitoring and evaluation in the entire budget by 75% and save N9bn for utilization on other capital expenditure;
-Apply an across-the-board reduction of 75% on all ‘research and development’ budget items and transfer the estimated savings of N35bn to other capital projects;
-Roll up the following wasteful or ambiguous line items from the service-wide vote; national job creation scheme – N8bn, special intervention – N62.8bn, and sinking fund for infrastructural development – N30bn, and transfer the total of N100.8bn to other capital projects;
-Reduce the provision of N14bn for acquisition of computer software and N14bn for motor vehicles in the 2014 by 75% and transfer N20bn to other job-creating capital projects.
-Eliminate the duplications and “cut-and-paste” items in the budget; for instance provisions for kitting of youth corps members in virtually every MDA budget, indefensible grants and the like, and transfer these to the capital budget -estimated savings of N2bn;
-Removal of N16bn proposed for a brand new ‘wholesale’ development finance institution instead of restructuring the Bank of Industry and N2bn government contribution to the newly-established Mortgage Refinance Company be taken off the service-wide vote and transferred to the capital development fund;
The APC said the N350 billion that would be save from the reduction in some allocations and deletion of others could be channelled into the mass construction of houses in the states, rehabilitation of major roads, construction of police and military barracks and funding of agriculture and power sectors.
“From the foregoing items alone, over N350bn can be freed to be spent on more job-creating capital projects like the construction of 2,000 housing units in each state of the federation plus the FCT (either by the FHA or grants-in-aid to the various State Housing Corporations to do so) at the cost of N90bn; enhanced funding of key roads and bridge projects like the East-West Road, Lagos-Ibadan Expressway, New Niger bridge, Onitsha-Enugu Expressway and Abuja-Lokoja Road that have consistently suffered from inadequate funding – N100bn,” the party said.
“More funding for the construction of Police and Military Barracks all over the country, and the rehabilitation of existing ones at the cost of N30bn; better funding of the agricultural and SME sectors with the sum of N50bn; increase the North-East Intervention Fund to N11bn with an expected contribution of N33bn from multilateral and bilateral donor agencies; increase funding for power supply by earmarking N30bn for gas infrastructure and N30bn for the transmission company to complete ongoing projects.”
The party also stated in the report that the adjustments would raise the budgetary allocation to capital expenditure by 4.7% to 31.6%, adding however it would still remain too low, relative to what was required to meet the stated objectives of this budget.
The party said there was a limited link between the budget and Medium Term Expenditure Framework, MTEF. Noting that the MTEF for the 2014 proposed a benchmark price of $74, which was revised upwards by the National Assembly on the insistence of its members to $77.50 per barrel, the APC said it was still too low and needed to be adjusted back to $79 during the appropriation process.
It stated that on the basis of price adjustment, an additional N173 billion goes into the federation account as crude oil sales and federally collectible revenues rose to N10.692 trillion while gross federation account inflows increased to N10.276 trillion.
It listed the “hidden” deductions as Joint Venture Cash Calls (N858, 588bn), Gas Infrastructure and Development (N304.541bn), Oil Pre-Shipment Agency Expenses N3.200bn), Frontier Exploration Services (N16.000bn) and Fuel Subsidy Payments (NNPC/Marketers) (971.138bn).
The APC said, “These deductions amount to over N2 trillion from revenues accruing to states and local government. These deductions are decided unilaterally by the federal government without any consultations, transparency or rigorous debate. It is also noteworthy that these sums deducted do not get transferred into the federation account as required by the Constitution.”
On special funds, the APC said the special funds to be held in trust by the federal government in 2014 for the entire nation needed to be transparently budgeted, accounted for and audited regularly. The special funds, which total N190.800bn, listed are Ecology and Derivation (60bn), Statutory Stabilization (N30bn), Natural Resources Development (N100.800bn).
The APC also criticized the allocation of N66 billion to the Independent National Electoral Commission, INEC, to conduct the 2015 general elections. The party said the cost of the exercise could be significantly reduced if all the elections were held in one day instead of two days, February 14 and 28, 2015, proposed by the Commission for the presidential, National Assembly, governorship and State Assembly elections.
The APC also faulted the allocation of “a paltry N102bn” to the power sector while the Agriculture ministry fell by nearly 20% from N83bn in 2013 to N67bn in 2014.
It criticized the N240bn budgeted for the Niger Delta Ministry, associated agencies and programmes, saying it was twice the allocation for electric power and more than the budgets of the ministries of works, transport (including SURE-P) and the Millennium Development Goals (MDG).
The party argued that even if the allocation to the Niger Delta-focused agencies were justifiable, the outputs and outcomes of similar allocations in past years “leave much to be desired on account of pervasive corruption and lack of implementation capacity in the benefitting Ministries, Department and Agencies, MDA.”
On regional considerations, the APC regretted that the entire North East zone, which is the hotbed of the Boko Haram insurgency, received a “pathetic” N2bn to address the devastation in the six states making up the zone.
“This meagre budgetary proposal may have to do more with the dominance of the opposition in the zone than an assessment of real need,” the party, which controls three of the six states, alleged.
The party faulted the allocation of N39bn for Research and Development, which it said “does not make sense in many MDAs that have little or no R&D focus.”
The APC faulted the allocation of N14bn for the acquisition of computer software and another N14bn for the acquisition of motor vehicles, saying it was too large an amount in a federal government that had monetized the acquisition of vehicles since 2004.
The APC added, “In summary, an overview of the budget proposals clearly shows an attempt at spreading expenditure items in various parts of the budget to mask the administration’s real priorities as against, and in contradiction to, the stated objectives of the appropriation bill.
“Furthermore, the critical areas earlier identified that need enhanced public funding to generate inclusive growth with jobs have received much lower allocations than expected. The budget contains many classification errors, typos and duplication of items or line items that are clearly not needed. These need to be corrected by the National Assembly.
“Many line items in the recurrent and capital budgets were simply cut and paste from the budget of 2013, complete with descriptions, amounts and even typographical errors. MDAs simply felt the need to allocate amounts large enough to exhaust their respective fiscal envelope for the year without any regard for public purpose or real needs. Perhaps a movement from the envelope system to a zero-based budgeting system is what is needed to impose some fiscal and hard budget constraints on federal MDAs.
“The Jonathan administration has predictably made no statements about fighting corruption in the 2014 budget. The levels of allocation to MDAs with publicly-acknowledged corruption challenges (e.g. the Ministry of Aviation and agencies), while the anti-corruption agencies are hardly getting by in this budget says it all. We will now look at specific areas that the legislature will need to focus on to ensure the 2014 Budget works for all Nigerians.”