The President’s Budget Speech: Our Response

We appreciate the fact that the 2018 Appropriations Law which was passed by the National Assembly on May 16th, 2018 was signed by President Muhammadu Buhari on Wednesday, June 20th, 2018.

In his speech at the signing ceremony, certain observations were raised about the work of the National Assembly and its Constitutional responsibility to modify and amend the budget estimates submitted to it by the Executive.

You may recall that when the National Assembly passed the 2018 budget, it gave reasons why the budget was increased and why certain projects and programmes had to be provisioned for. However, due to recent developments, it is once again necessary to let Nigerians know the justification for our actions on the 2018 budget, which were based on our Constitutional responsibilities.

Adjustments and reductions in the locations, costs and number of projects approved were made in order to address geo-political imbalances that came with the Executive proposal. The introduction of new projects was done to ensure the promotion of the principles of Federal Character as contained in Section 14, subsection (3) of the 1999 Constitution of the Federal Republic of Nigeria as amended which states that “the composition of the Government of the Federation or any of its agencies and the conduct of its affairs shall be carried out in such manner as to reflect the federal character of Nigeria…” The number of projects had to be increased in order to give a sense of belonging to every
geo-political zone of the country to ensure socio-economic justice, equity, fairness, and to command National loyalty.

Within the context of the provisions of Sections 4, 80 and 81 of the Constitution, everything that the National Assembly has done is within its powers.

Furthermore, Chapter 2 of the Constitution emphasizes the need for balance, inclusivity, and equity in the distribution of national resources. The annual budget, which symbolizes the distribution of these resources must reflect the aforementioned values, which we swore to uphold.

These Constitutional provisions, in addition to a recent Court judgment have affirmed the fact that the budget process is a ‘joint effort’ that must reflect the input of both the executive and the legislature — the latter being the closest representatives of the people. However, we are fully aware that the Executive has the exclusive responsibility to execute all parts of the Appropriation Act once it is signed into law.

It is our firm belief that if the President had been properly briefed by his appointees, he would not have raised most of the concerns that he did in his remarks at the budget signing. It is therefore inevitable for the legislature to give members of the public an insight into what transpired during the appropriations process and how we arrived at the decisions that are contained in the 2018 budget.

With the aforementioned background, let us respond to each of the issues raised.

On the issue of the period when the budget proposal was submitted and when it was passed by the National Assembly, it is necessary to remind Nigerians that although the budget was submitted in November, as at March 15th 2018 (5 months and 8 days after the budget submission), Mr. President was still directing the Secretary to the Government of the Federation to compel the Heads of Ministries, Departments and Agencies of the Federal Government to appear before the committees of the National Assembly to defend their respective budget. In addition, up till April (6 months after the budget submission), the Executive was still bringing new additions to the 2018 budget which the National Assembly in good faith and in the spirit of collaboration and harmonious working relationship accepted.

More importantly, the 2017 budget, was signed into law on June 5th, 2017 and by the provisions of Section 318 of the Constitution, which defines the Financial Year as “any period of 12 months beginning on the first day of January in any year, or other date as the National Assembly may prescribe” – the 2017 budget lapsed on the 5th of June 2018. This same provision is replicated in the 2017 Appropriation Act.

It is important to also note that if not for the fact that the 2017 budget elapsed on the 5th of June 2018, the Federal Government would not have recorded notable capital projects for the just ended financial year. This is because the Federal Government only started releasing funds for capital projects in December 2017 when the funds from the Federal Government’s loans were released and disbursed to contractors.

On the issue of an Organic Budget Law to improve the budgetary process, the proposed law is pending in the National Assembly and cannot be considered without the amendment of Section 81 of the 1999 Constitution (as amended) which gives the President the power to propose “estimates” at ANYTIME in the financial year. Nigerians need to know that during the last Constitutional Review exercise, the National Assembly in its wisdom amended this provision and it was approved by over two-thirds of the State Houses of Assembly. The new Constitution Amendment requires the President to submit the budget not later than 90 days to the end of the financial year. As of today, the President has not yet signed this Constitutional Amendment Bill which would have helped us to have a proper budget calendar, which shall eventually lead to the realization of the proposed January to December budget cycle.

It was stated that the legislature made cuts amounting to N347 billion which were meant for 4,700 projects. Again, these reductions of N347 billion were made from low priority areas to higher priority areas to support the generation of employment for our youth by MSMEs. We took the decision to reduce the funds in some areas in order to ensure balance and equity in the spread and utilization of our national funds. Additionally, the figures given amounts of the reductions made by the National Assembly were unduly exaggerated as we did not make any substantial reduction on any project to the extent of affecting its implementation.

To give the exact detail of the projects where we made deductions, it should be noted that the counterpart funding for the Mambilla Power Plant, Second Niger Bridge/Ancillary roads, the East-West Road, Bonny-Bodo Road, Lagos-Ibadan Express Road and Itakpe-Ajaokuta Rail Project, was reduced by only N3,956,400,290 – which represents only 1.78 % of the total N222,569,335,924 submitted by President Buhari. This left these projects with N218,612,935,634 which cannot negatively affect their implementation. This obviously contradicts the claim that these projects lost “an aggregate of N11.5 billion”.

Specifically:
The counterpart Funding for 3050mw Mambilla Hydropower Project was reduced from N8.5billion to N8.2billion (a reduction of N300million);
The construction of the Second Niger bridge including access roads phases 2a and 2b in Anambra and Delta states and other projects in the South East were reduced from N10billion to N9.1billion (a reduction of N900million);
The construction of Bodo-Bonny road with a bridge across the Opobo channel in Rivers State was reduced from N10billion to N8.7billion (a reduction of N1.3billion);
The funding for the Lagos-Ibadan Expressway was reduced from N20billion to N18billion (a reduction of N2billion), which would not significantly affect the construction of the road in one appropriations cycle;
The Railway Projects (Counterpart Funds): 1. Lagos-Kano (ongoing) 2. Calabar-Lagos (Ongoing) 3. Ajaokuta-Itakpe-Aladja (Warri) (Ongoing) 4. Port Harcourt- Maiduguri (New) 5. Kano-Katsina-Jibiya-Maradi in Niger Republic (New) 6. Abuja-Itakpe and Aladja (Warri)-Warri Port and Refinery including Warri new Harbour (New) 7. Bonny deep Sea Port & Port Harcourt of N162,284,335,924 was retained by the National Assembly as presented by
Mr. President; and

The National Assembly increased the aggregate funding for the East-West Road from N11,285,000,000 to N12,085,000,000 because we realized the strategic importance of the road to the entire oil producing areas of our country and the fact that the road project has lingered for too long;

Addressing the issue of the Second Niger Bridge project, apart from early works, as of today, there is no existing contract for the Second Niger Bridge in spite of frequent requests from the National Assembly. The N900million reduced from the N10billion proposed by the Executive was deployed to fund ancillary roads that connect to the Bridge. It should again be noted that the N12.5billion and the N7.5billion appropriated for the Second Niger Bridge in the 2016 and 2017 budget by the National Assembly were never utilized for the project.

We also need to call the attention of the public to the fact that the National Assembly allocated an additional N2billion to the Enugu-Port Harcourt Expressway project. This was more than the Executive proposed.

As part of the implementation of the 2017 budget, the contracts for 15 roads were awarded by the Federal Executive Council with no budgetary provisions. Realizing the importance of these projects, the National Assembly decided to spread the N3.9billion saved from the earlier mentioned projects funding to facilitate the take-off of these projects that include: the rehabilitation of Ikorodu-Shagamu road in Lagos State; the rehabilitation of 9th Mile-Orakam to Benue Border; and the general maintenance of Pankshin – Ballang – Nyelleng – Sararele – Gindiri road in Plateau State, etc. These are the projects purported to be “project inclusions without conceptualization.” On these projects, the National Assembly needs to be commended by Mr. President for helping
to to support the take-off of these awarded but unfunded projects.