In line with legislative procedure, consideration of the N20.51trillion 2023 budget proposal by both chambers of the National Assembly, enters committee stage this week. TAIYE ODEWALE reports
The N20.51trillion 2023 budget proposal
After approval of projections and proposals made in the 2023 – 2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), by both the Senate and the House of Representatives, President Muhammadu Buhari penultimate Friday, presented to joint session of the National Assembly, N20.51trillion budget for the 2023 fiscal year which is about N750billion higher than N19.76trillion earlier proposed in the MTEF/FSP papers.
President Buhari in the budget anchored on Fiscal Sustainability and Transition, however, made a lower projection of budget deficit by pegging it at N10.78trillion against N11.30trillion proposed in the MTEF/FSP documents.
The N10.78trillion deficit as explained by the President, will be funded by projected N8.80trillion new borrowings and proceeds from privatised assets and others.
“We plan to finance the deficit mainly by new borrowings totalling N8.80 trillion Naira, 206.18 billion Naira from Privatization Proceeds and N1.77 trillion Naira drawdowns on bilateral/multilateral loans secured for specific development projects/programmes”, he said.
He also earmarked N3.6trillion to fund fuel subsidy from January to June next year with warning that the subsidy regime must stopped in saving the nation’s economy from avoidable bleedings on yearly basis.
Critical assumptions and parameters upon which the projected N20.51trillion 2023 budget is based are: Oil price benchmark of 70 US Dollars per barrel, Daily oil production estimate of 1.69 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day), Exchange rate of 435.57 Naira per US Dollar; and Projected GDP growth rate of 3.75 percent and 17.16 percent inflation rate.
Added to the parameters as critical components of the budget as presented by President Buhari are ÷ N744.11billion for Statutory Transfers, N8.27trillion for Non-debt Recurrent Costs, N4.99 trillion for Personnel Costs, N854.8 billion for Pensions and Gratuities of Retirees.
Others are: N1.11 trillion for Overheads cost, N5.35trillion for Capital Expenditure including the capital component of Statutory Transfers, N6.31 trillion for Debt Service and N247.73 as Slinking Fund of billion to retire certain maturing bonds.
Passage for second reading at both chambers
Apparently being a pre – election year, both the Senate and the House of Representatives last week Wednesday, carried out debates on general principles of the N20.51trillion 2023 budget proposal and passed it for second reading.
Unlike in the past that such debate used to last for three solid days , it only lasted for three hours in the Senate and by extension, in the House of Representatives.
However some of the Senators who contributed to debate on general principles of the budget proposals, frowned at rising recurrent votes on yearly basis even with embargo placed on employment, yet to be fully lifted by the federal government.
Specifically the Chairman, Senate Committee on Army, Senator Ali Ndume (APC Borno South), in his contribution, wondered why recurrent expenditure component of yearly federal budget keeps increasing, despite embargo placed on employment and retirement from service by those who clocks 60 years or already spent 35 years in public service.
He consequently, urged the Senate to thoroughly look into the seemingly unjustifiable yearly increase in the recurrent expenditure projection of federal budget.
His words: “The N8.2trillion earmarked for recurrent expenditure in the proposed N20.51trillion 2023 budget , constitute 43% of the entire budget profile.
“Mr President, our relevant committees, should thoroughly scrutinize proposals made in the N20.51trillion 2023 budget by the executive, particularly the recurrent expenditure component which has been rising on yearly basis.
“Statistically, in the 2018 budget recurrent expenditure vote was N3.5trillion, in 2019 it increased to N4.7trillion, rose again in 2020 to N4.8trillion, in 2021 N5.9trillion, 2022 N6.9trillion and astronomically projected as N8.2trillion for the 2023 fiscal year.
“The yearly increases are even happening in the face of embargo placed on employment in all the Ministries and parastatals aside hundreds of civil servants retiring on yearly basis as well.
“The Senate and by extension, the National Assembly, need to critically look into it this time around, more so, with attendant increase in the votes of debt servicing which is projected to be N6.31trillion for the 2023 fiscal year and far higher than capital vote of N5.35trillion.
“Mr President and very distinguished colleagues, we must thorough look into budgetary proposals made by the executive to prevent a situation of borrowing money for payment of workers salaries”, he said.
Senator Betty Apiafi (PDP Rivers West) in her contribution, drew the attention of the Senate to the issue of oil theft again which she said, must be stopped in saving the Nation’s economy from total collapse.
“In August this year, from 1.82million barrels oil production expected from Nigeria per day , the country was only able to produce 972million barrels per day , losing 859million barrels per day to oil thieves.
“The loss in the stated month , translated into $59million per day and N9.5trillion per annum.
“This dangerous revenue loss must be stopped in the general interest of all”, she said.
Also worried by the economic sabotage, the President of the Senate, Ahmad Lawan in his remarks after the passage of the budget for second reading, bemoaned the huge loss of revenue due to high scale oil theft and called for appropriate sanctions against the perpetrators.
Lawan charged the committees of the Senate to, in the course of the budget defence, ensure critical scrutiny of the submissions and trace any leakage or wastages contained in it.
“Aside identifying loopholes for revenue leakages and blocking them, priority in terms of appropriation, should be given to completion of on going projects rather than initiating new ones to avoid incidents of abandoned projects, particularly now that the present administration is on its last lap”, he said.
Expectedly the Senate thereafter, adjourned plenary to 15th of November for consideration of the budget estimates at committee level.
Will it be garbage in, garbage out at committee level?
Real scrutiny and consideration of budgetary proposals supposed to take place at committee level in any parliament but to a large extent, that has not been the case in Nigeria at the federal and State level, particularly under presidential democracy being practised.
This so because the executive be it at the state or federal level, believes that drafting and implementation of budgets fall within its purview and should just be only approved by the legislature.
Yearly squabbles between NASS and the Presidency
Although to a very great extent, most of the State Houses of Assembly, are pocketed by governors to the extent that consideration and approval of budgetary proposals are made within two weeks without subjecting them to thorough scrutinies but at the federal level, it has been yearly squabbles between the Presidency and the National Assembly on what should be the final content of budgetary proposals.
Such squabbles often lead to allegations of budget padding on both sides and insertions of projects by the National Assembly.
However since the issue at stake now as repeatedly said by both sides at the stage of consideration of proposals made in MTEF/FSP papers and even the stage of budget presentation by President Muhammadu Buhari himself, is revenue generation; Nigerians await how the various relevant committees will reduce excessive votes earmarked for overhead costs by some of the MDAs in saving cost and providing required fund for implementing the budget.