As reports of the Appropriations Committees of the two houses of the National Assembly were being expected for consideration and passage, the news broke of a suspicious additions that the Ministries concerned could not explain to the parliament, on what the proposed expenditure were meant for. JOSHUA EGBODO writes
The curious disclosure
The alleged padding drama had started from the Senate, when its committee on Special Duties, in about a fortnight earlier engaged the Minister of Humanitarian Affairs and Disaster Management, Sadiya Umar Farouq, during a budget defence session, where a question was raised on what specifically, an allocation of about N206 billion inserted in the budget was meant for. The curiosity of the panel was ignited when the subhead appeared rather unclear.
Whether genuinely ignorant, or some political gimmicks, and or mischief as was widely perceived by many Nigerians afterward, the minister was to deny knowledge of the allocation, stressing that her ministry never made such proposal in its budgetary estimates forwarded to the Budget Office of the federation. Reports were that she later wrote the Federal Ministry of Finance seeking explanations on the supposed embarrassing development.
Reps’ intervention
While debates on the matter was up in the air, the House of Representatives Committee on Appropriations, from which report of the 2023 budget is being expected for consideration and passage by the larger house waded in. Chairman of the Committee, Hon. Aliyu Betara, whose panel had invited the duo of Minister of Finance, Zainab Ahmed and Farouk for insights into the controversial revelation said they needed to know where the confusion arose from.
Figures, mix up explained
It was made known to the House of Representatives committee last week that such supposed padded figures amounted to N1.7 trillion, cutting across a number of MDAs. The Minister of Finance noted that the N1.7 trillion loan-tied projects are domiciled in 14 MDAs of the federal government, which some coding errors created the mix ups.
Specifically, she said the controversial N206 billion in the Humanitarian Affairs Ministry was for the National Social Safety Nets Project – Scale Up (NSSNP-SU), adding that the project was correctly described in the submission from International Economic Relations Department (IERD) for the 2023 budget.
She said, “but regrettably, a wrong code was inadvertently used in the process of inputting it, which resulted in it being captured as Purchase of Security Equipment in the GIFMIS Budget Preparation System (BPS), which has a limited dropdown range of project descriptions/codes.”
According to her, the World Bank is the funding source for the project, which is domiciled in the FAHADMSD Headquarters, with projected drawdown of $473,500,000, which is equivalent to N206,242,395,000, using the N435.57/USD exchange rate applicable to the 2023 budget.
She said the same project was correctly captured in the 2022 budget of the Humanitarian Affairs Ministry in the amount of N12,304,500,000 [ERGP1180310], based on the projected drawdown of $30m at N410.15/$ 2022 exchange rate in the budget.
Other MDAs with similar issues
Also on the alleged wrong insertions in the Ministry of Defence’s budget relating to Refurbishment and Procurement of Harris RF-5/7800 Military Communication Equipment and Safe Schools Initiative Projects, she said, “The Honourable Minister of Defence wrote to Mr. President requesting the immediate release of $1,363,880.40 and N158,928,045.37 for the implementation of Phase 1 of the project. HM-MoD also requested the sums of $12,274,923.60 and N11,946,311,375.18 to implement Phases 2 and 3 of the project, all of which Mr President graciously approved.
“Further to Mr President’s approval, 50% of the requirement for Phases 2 & 3, amounting to N8,600,000,000 (using the exchange rate of N435.57/USD), has been included in the 2023 budget proposal of the MoD. The Defence Headquarters submitted its un-costed requirements under this programme. The SSI Secretariat, Federal Ministry of Finance, Budget & National Planning (FMFBNP), however, submitted a request of N4.5bn for MoD, of which only N2.250bn [50%] was provided in the 2023 budget.
“The safe schools initiative [SSI] is a coordinated multi-agency initiative to enhance security in FGN owned educational institutions. The agencies involved are: the Defence Headquarters/Ministry of Defence; the Department for State Security, Nigeria Security & Civil Defence Corps, Federal Ministry of Education and the Federal Ministry of Finance, Budget and National Planning. Provisions have been made in the budgets of each of these agencies to cover their own responsibilities under the SSI.”
For the Ministry of Power, the Minister pointed out that the 2023 proposed budget for the ministry includes a total of N195,465,151,790.65, with a breakdown as follows: “Zungeru HydroElectric Power Project: funded by Export-Import Bank of China. Amount: USD175,757,149.92, which is N76,554,541,790.65.
“Power Sector Recovery Operation (PSRO); funded by World Bank. Amount: USD 162,000,000, which is N70,562,340,000.00. Nigeria Electrification Project (NEP) to be executed by the Rural Electrification Agency (REA), funded by World Bank and AfDB. Amount: USD55,000,000, which is N23,956,350,000.00. The Nigeria Electricity Transmission, to be executed by Transmission Company of Nigeria (TCN)): funded by the World Bank. Amount: USD56,000,000, which is N24,391,920,000.000″. The total projected drawdown for the four projects according to her is USD448,757,149, which is N195,465,151,790 at N435.17/$ exchange rate.
On a similar mix up in the 2023 budget of the the Federal Ministry of Education, the Minister of Finance said, “The amount in question here relates to the 2022 budget, during which it had a projected loan drawdown of $30m equivalent of N12,304,500,000 (@ exchange rate of N410.15/USD). The issue relating to this arose from the NASS committee’s review of FME’s 2022 budget implementation. The project is the “Second Africa Higher Education Centres of Excellence for Development Impact Project” and the financier is the World Bank. [ERGP30180290]
“For 2023, the amount captured for this project and the Sustainable Procurement, Environmental and Social Standard Enhancement Project is N26,134,200,000 (60 million US Dollars @345.57/$]; both are World Bank funded projects.”
An avoidable controversy?
In the words of the Minister of Finance, and as averred to later by analysts, the controversy could have been avoided if the right communication gaps-bridging mechanisms were in place. She said the current issues would have been easily clarified between the respective MDAs and her ministry, if the affected agencies followed the established budget processes. “The proposed 2023 budget for each ministry was circulated for review and feedback, then presented at the Federal Executive Council (FEC) before it was submitted to NASS (sic) by President Muhammadu Buhari.
“It is noteworthy that the total amount of multilateral/bilateral loan funded projects included in the 2023 budget is N1,771,404,182,322, involving a total of 14 implementing ministries. The aggregate projected multilateral/bilateral loan drawdown and expenditure of N1,771,404,182,322 is shown on Lines 271 and 301 of the MTEF/FSP approved by FEC and presented to NASS. It is also shown on Lines 182 – 195 on page 12 of the 2023 Appropriation Bill.
“So far, no issues have been raised in relation to the multilateral /bilateral loan funded projects by the other ministries. It is evident that there are internal coordination issues between the PIUs in some MDAs and the CEOs/Accounting officers of the implementing ministries. We will be taking necessary actions to ensure that this is addressed going forward
“Finally, let me state clearly that the allegation that the FMNBNP (sic) ‘padded’ the budgets of the affected MDAs by inserting the projects in question makes absolutely no sense. If the projects are in the budgets of these MDAs, the FMBNP cannot procure them, as their procurement can only be handled by the concerned MDAs. Specifically, for multilateral/bilateral funded projects, the PIUs are domiciled in the designated implementing MDAs, and the lenders will not deal with any other agency, including FMBNP, on their procurements”, she told the Betara-led panel last week.
Anger over Farouk’s absence
Before the appearance of the Minister of Finance, Budget and National Planning at the committee’s session, her counterpart at the Humanitarian Ministry was reported to have made statements of backtracking, claiming awareness of what the funds were actually meant for. However, the committee did not found it funny when the Humanitarian Minister failed to honour its invite to clear the air alongside side the Finance Minister.
Chairman of the House Committee, Betara, in his closing remarks came hard on the Minister of Humanitarian Affairs and Disaster Management, for going to the press over the alleged padding without trying to sort out the mix up. He also expressed dissatisfaction with the Minister’s absence, saying she was in the habit of avoiding the invitation of relevant committees of the House, saying that if she was tired with the job offered her by President Muhammadu Buhari, the door was open to her to honourably quit.
With clarifications are offered…
From the repeated assurances of the House of Representatives that the January-December reinstalled budget cycle will not be distorted, especially on the premise that the 2023 appropriation remaining its tenure exit budget, Nigerians are in high hopes that report of the Appropriations Committee will be laid and approved in days.