CIVIL SOCIETY STATEMENT ON 2014 BUDGET - [This is the comunique of the Civil Society Summit on the Budget published at page 56 of Thisday Newspaper yesterday] The Civil Society Summit on the 2014 Federal Budget was convened by Centre for Social Justice on February 4th and 5th 2014 to review the 2014 proposals with a view to make inputs to align the proposals with the needs of the population and best practices in fiscal governance. Participation was drawn from non-governmental and faith based organisations, professional associations and other citizens groups. The Summit was held under the umbrella of Citizens Wealth Platform dedicated to ensuring that public resources are made to work and be of benefit to all. The following observations were made. Observations (A) Although the budget is titled a budget of inclusive growth and job creation, it has no key performance and measurable indicators in terms of the number of jobs to be created, the sectors where the jobs will be created, linkages with other sectors of the economy and the sustainability of the jobs, etc. (B) The budget proposal is suffused with a lot of inappropriate, unclear, frivolous and unduly bloated expenditure heads. Examples include: the Presidency proposes N2.617bn for travels, office stationery of N718,919 a day, N1.52bn deposit for a new aircraft, maintenance of office buildings/residential quarters for N907.1m, rehabilitation/repairs of office buildings for N1.650bn and rehabilitation/repairs of residential buildings for N205m; National Assembly’s demand for N150bn and a further N100bn for constituency projects; Ministry of Information’s demand for N201m for diaries and calendars, N201m for anniversaries and celebrations, national media tour of N241m, international media spending of N300m and N2bn for public enlightenment on SURE-P; Ministry of Finance needs N600m for purchase of security equipment. Further, the Ministry of Agriculture repeats the yearly joke of “seed”, “seeds”, “improved seeds”, “inorganic fertilizer” and “organic fertilizers” so many times and demanding billions of naira. Clearly, these cannot be the priorities of the average Nigerian! (C) Statutory transfers ([1] National Judicial Council: N68bn [2] National Assembly: N150bn [3] Niger-Delta Development Commission: N61.94bn [4] Universal Basic Education: N70.470bn [5] Independent National Electoral Commission: N45bn [6] Public Complaints Commission: N2.9bn [7] National Human Rights Commission: N1.350bn totaling N399.69bn are stated as lump sums without any details or disaggregation. There is no law authorizing lump sum statement of allocations. Stating statutory transfers as lump sums is not acceptable in a constitutional democracy founded on the rule of law and the sovereignty of the people. Indeed, no agency of government, under any guise, is allowed to spend public resources in a way and manner and for purposes not known to citizens - see section 48 of the Fiscal Responsibility Act (“FRA”). (D) The line item referred to as “welfare packages” which runs into billions of naira across the Ministries, Departments and Agencies (MDAs) is an illegal vote not founded on any law. The welfare of the staff of MDAs is already provided for in the personnel vote reflecting as salaries and wages and other perks of office. For instance, allocating N1.223bn as welfare packages to the Office of the Secretary to the Government of the Federation makes no sense. (E) Capital expenditure got a paltry 23.7% of the votes leaving the bulk of spending as recurrent expenditure and the provision for debt service is 64.69% of the capital vote.The capital vote of 10 critical ministries of agriculture, education, health, power, Niger Delta, transport, works, aviation, mines and steel and defence is only 60.24% of the debt service. Two critical bills that will enhance infrastructure development vis, the Federal Road Fund Bill and the Development Planning and Projects Continuity Bills are still pending before NASS. (F) The FRA (S.41) allows borrowing only for human development and capital expenditure but Nigeria’s debts have been increasing in geometric proportions in the last couple of years with no concrete improvements in human development and critical infrastructure. Also, the President and the Minister of Finance have failed, refused and neglected to present overall limits on Consolidated Debts of the Federal, State and Local Governments to the National Assembly for approval as demanded by S.42 of the FRA. (G) The expenditure proposals show that there are too many MDAs and the government is unwieldy. There are too many agencies collecting huge sums of money and delivering little or no tangible services to the public. And there are too many projects competing for very little resources. For example, the budget of the Ministry of Works for roads and other projects is too thinly spread. (H) The bloated personnel vote which gulps over 50% of recurrent expenditure and 37% of aggregate expenditure is not sustainable. The delay in the full implementation of the Integrated Payroll and Personnel Information System (IPPIS) has contributed to the high figures. However, the report of the Orosanye Committee is gathering dust on the shelves and FGN has failed to produce a White Paper on the report while the perpetrators of the N108bn ghost workers scam are yet to be prosecuted. (I) New demands for vehicles and maintenance of residential buildings (for instance, rehabilitation of residential buildings for N888.237m for the Ministry of Finance) seem to suggest the abandonment of the Monetisation Programme of FGN. (J) The proposals for education and health do not meet national and international standards demanding 26% of the budget to education and 15% to health respectively. The funding for infrastructure (roads, power, etc) and agriculture is also meagre. (K) The demand for Joint Venture Cash Calls persists in 2014 in the sum of N858.588b while the Petroleum Industry Bill is still pending before NASS. Also, it is not clear on the face of the budget whether subsidy has been provided for kerosene. However, previous subsidy did not reach the intended beneficiaries and there are no plans in place to stop the subsidy scam. The Summit thereafter made the following: Recommendations NASS Should: (1) Prevail on all MDAs seeking a vote for job creation to provide key performance and measurable indicators in terms of the number of jobs to be created, the sectors where the jobs will be created, linkages with other sectors of the economy, the sustainability of the jobs, etc. (2) Weed out all inappropriate, unclear and frivolous expenditure and reduce the bloated votes. As shown in the publication of inappropriate, unclear and frivolous expenditure by the Citizens Wealth Platform, a minimum of N295.3bn can be saved for reprogramming. The line item referred to as “welfare packages” should be expunged from the budget. (3) Disaggregate the statutory transfers and provide details of the allocations just like the budgets of other MDAs. NASS should cut its vote by 50%. (4) Increase capital expenditure to a minimum of 30% of the budget expenditure through savings from the budget heads referred to in Resolution 2 and prioritise the passage of critical bills that will enhance infrastructure development including the Federal Road Fund Bill and the Development Planning and Projects Continuity Bill. (5) Insist that new borrowing proposals from the executive should be accompanied with the list of capital projects, their cost benefit analysis and the terms of the borrowing which should not exceed 3% per annum interest rate as required by the FRA, and meticulously review the proposals before approval. (6) Insist on the President submitting proposals for the setting of the Consolidated Debt Limits as required by section 42 of the FRA before approving new borrowing. (7) Streamline the number of projects being funded, continue with existing projects and discountenance new ones unless they are absolutely necessary; seek to build consensus with the executive and other stakeholders and decide on key national infrastructure projects that should be completed in the short term and channel the bulk of the expenditure to them. (8) Ensure the passage of the Petroleum Industry Bill before the end of the second quarter of 2014 as this is imperative for enhanced accountability and transparency in the oil sector, increased revenues accruing to the Federation Account and to stem the demand for Joint Venture Cash Calls. (9) Ensure the strict implementation of the Monetisation Programme as a means of cutting down frivolous expenditure. (10) Increase the votes to agriculture, education and health particularly their capital allocations; increase the total education and health budget to reflect the agreements with labour unions in the industry to avoid another strike action in the current year. The increases should come from the savings earlier identified. (11) Abolish the subsidy on kerosene since the target beneficiaries will never benefit from the subsidy and there is no feasible plan to stem the subsidy scam. The Executive should: (1) Activate mechanisms for feasible and bankable public private partnerships for critical infrastructure delivery as a means of supplementing public funding of infrastructure. (2) Produce the White Paper on the report of the Orosanye Committee and forward relevant amendment, repeal and restructuring bills to NASS. (3) Ensure that IPPIS covers all MDAs and be used as a basis for computing personnel costs; and the anti-corruption agencies should prosecute the officials who presided over the loss of N108bn to ghost workers in already verified and IPPIS compliant MDAs. Signed: Eze Onyekpere, Convener CWP; George Hill Anthony of Niger Delta Budget Monitoring Group, Abiodun Oyeleye of New Initiative for Social Development and Ibrahim Adamu of Community Centre for Development.
Posted on: Wed, 26 Feb 2014 13:37:39 +0000
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