Nigeria Matters

Odyssey Of An Unworkable Budget

Days before President Umaru Yar’Adua literally wept openly over alleged bastardisation of the 2009 Budget by the National Assembly, during the budget signing ceremony in Abuja, indications were rife that the visibly discontented President would head to the Supreme Court to, as it were, challenge the power of the federal law makers over budget in a Presidential system.

According to reports, the President’s discomfiture stemmed from the audacious actions, or most appropriately, inactions, of the National Assembly members on the budget, which, in the words of a Presidency source, were “not far from sabotage”, and approximated the conduct of “an opposition to a government.”

These seemingly unwholesome actions of the law makers bordered on their reported cutting down (of) allocations for critical sectors such as power, water and gas supply to very “unimaginably unbelievable levels”, and in one particular case, such as in the Abeokuta-Abuja-Kano pipelines, the allocation was outrightly removed, which in the long run, totally changed the context and content of the entire budget. For instance, the allocations for power transmission, a key element of the President’s famed Seven Point Agenda, by way of grid enhancement and reimbursement was reduced from N3.55 billion to a ridiculous N800 million, ditto for the water sector, which was knifed from N5.1 billion to N2 billion.

Besides, the law makers were alleged to have arbitrarily allocated funds to non-existent agencies, as in the so-called Federal College of Complimentary and Alternative Medicine which got a princely N103 million, while one “anonymous council” was dashed N250 by the benevolent Abuja Sancta Claus.

As if that was not bad, and sad enough, the N6.5 billion allocation meant for the completion of the Geregu, Papalanto and Abeokuta and other gas projects across the country, critical to increasing the nation’s power generation capacity to 6000 megawatts by December 2009, as promised by the government, was reduced to N1.1 billion.

Every thought that the National Assembly members were patriotic in their doings was washed away when one discovers, albeit aghastly, that while the selfsame National Assembly was reducing allocations to critical sectors of the economy, it was at the same time raising the allocations meant for its use from N64.17 billion to, wait for it, N111.3 billion! Selfishness has no other name and description, I tell you! This measure, as someone sarcastically enthused, is aimed at cushioning the effects of the global economic crisis on the law makers and their families while the citizens, as Senator David Mark enjoined later, make the essential sacrifices for national development.

What was, however, seen as the greatest undoing of the National Assembly on the 2009 Budget was the projection of higher oil revenues as well as oil production for the country, in a manner only soothsayers and prophets would. In the passed budget, $45 per barrel and 2.209 million barrel per day (mbpd) were respectively forecast by the National Assembly, (at a time the average price of crude oil at the international market in recent months falls at N40 per barrel and the country’s crude oil production capacity hovering at an average of 1.6 mbpd), much to the consternation of President Yar’Adua who, without mincing words, stressed that “given the current realities of the declining international oil prices and production constraints”, the budget is simply unworkable! As he put it, “Due to militant activities in the Niger Delta, our production has sometimes declined to as low 1.6 mbpd from a projection of 2.209 mbpd.” Meaning, the President is not living in the same world with the National Assembly members even though they live and reign in the same neighbourhood and country!

What more, the President contended that the budget would inevitably run into troubled waters because “Should this low production turn out to be our average for the year and the average price falls to $40/barrel from the original budget projection of $45/barrel, our fiscal deficit would increase to N1.35 trillion or 5.24 per cent of GDP, which is well above the three per cent allowable limit under the Fiscal Responsibility Act.” What this means, in plain language, is that financing such a budget, as the President himself admits, would be one Herculean task for the executive, and the President in particular. And, for a government not known for effectively executing even budgets that are less admittedly defective, this evidently is too disturbing a reality just as the consequences thereof for a country on the throes of economic collapse are too grin to contemplate.

Interestingly, the leadership of the National Assembly shared the same sentiment with the President on the defectiveness and seeming unworkability of the budget. Speaking after the signing ceremony, the President of the Senate, David Mark retorted that President Yar’Adua was not just raising an unnecessary alarm because there were some parameters that had changed since the estimates were presented to the National Assembly by the President stressing that “ I think once we start the implementation, we will see how far we can go in terms of how much of it we can implement, I mean going by the 2.29 mbpd to 1.8 mbpd is a lot different, there is no doubt about it.” In his own submission, Speaker of the House of Representatives, Dimeji Bankole reportedly said “I agree with the President. I have raised some concerns as well with some members of the National Assembly. We are just concerned as he is on the fact that we have falling revenue.”

It is against this backdrop that one finds it simply inconceivable how the same President would at the same breath assume that the decidedly defective budget, which he grudgingly assented to, could ensure the “regeneration of the national economy” leading to the attainment of the Millennium Development Goals, peace, security and sustained development of the Niger Delta. This is so because as they say in Logic, something can NEVER be and not be at the same time!

Significantly, beyond the protestations of “strong reservations” as well as the fleeting thought of a walk along the path of judicial interpretation of the power of the National Assembly over budget preparation in a Presidential System by President Yar’Adua, what this episode has brought to the fore is that the country is foisted with a president apparently lacking in what someone called the “Presidential Courage” to confront the rampant whims of a buccaneering and self serving National Assembly. It is safe to say that assenting to the budget largely known to be unrepresentative of the allocative power of the office of the President is more of a sign of weakness never seen anywhere. This essentially explains why the law makers could go on a binge, the global economic meltdown notwithstanding, while President Yar’Adua goes worrying how to finance a budget that is supposedly his!

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