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National Assembly and the budget process, By Emmanuel Ado

By Emmanuel Ado on 08/02/2017

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 •Emmanuel Ado
•Emmanuel Ado

Before 1974 the United States Congress was faced with the same kind of situation confronting the National Assembly – the refusal of President Richard Nixon to spend funds that Congress had approved for projects.

The Congress, in reaction, created the Congressional Budget Office (CBO) and literally ‘seized’ power, by that very act, from the Office of Management and Budget. In a way, Congress was helped by the Watergate scandal which, not only distracted Nixon, but was to consume him.

The Senate President, Senator Bukola Saraki, whose survival instinct has befuddled his political opponents, has started a process which, given existing circumstances, are similar to the situation the United States faced in 1974. Like Nixon, President Muhammadu Buhari, despite his public posture of a “tough guy”, is not in control of his government due to circumstances beyond his control and, more, due to his ‘nature.’

Buhari is lazy, and has never pretended to be intellectually inclined. Memos of more than one page, according to Aso Rock insiders, puts him off. As a result, he “contracted the government” to Maman Daura, his nephew that he “defers to for his intellect” and to Abba Kyari, his Chief of Staff and Daura’s acolyte.

The Arewa Consultative Forum (ACF) has severally asked for his sack due to lack of capacity. The ACF believes that the president has actually abdicated powers. But not even the recruitment of the old war horse, Ambassador Babagana Kingibe, the butt of jokes in top northern circles, has remedied the situation. The poor health of the president will further worsen the situation of “powerful powerlessness of the president.”

And like they say, nature abhors vacuum. So, for the benefit of Nigeria, the Senate president steps in. It is confounding that political analysts are not giving Saraki the credit that he truly deserves for political brinkmanship. He opened the can of worms on the management of the subsidy programme, and he is quietly changing Nigeria through some of his reform agenda in the upper legislative chamber.

There is no doubt that Nigeria needs to reform its budget process. The subsisting process is evidently outdated. His worry that the budget processes, over the years, has been marred by several irregularities, leading to inadequate implementation, is not tales by moonlight. As he rightly observed, there are structural and procedural gaps that limit transparency and accountability in the budget process and fiscal discipline. In setting up the committee, he said: “It is a fact that annual budgets are yet to be fully aligned with our development goals, from conceptualisation, approval to implementation.”

The truth, however, is that the answer to the questions he is seeking are there. In 2010, the Goodluck Jonathan administration approved the adoption of the provisions of the International Financial Reporting Standards (IFRS) and the International Public Sector Accounting Standard (IPSAS), for the private and public sectors. The Federation Accounts Allocation Committee (FAAC), also did a substantial job that culminated in the production of a Standardised National Chart of Account (COA) that is IPSAS compliant. The COA was designed in line with the provisions of Government Financial Statistics (GFS) of the International Monetary Fund (IMF).

The FAAC subsequently developed templates for IPSAS compliant budget, and it became operational with the 2014 budget. The requirements include presentation of budget information in financial statements, which requires a comparison of budget amounts and the actual amounts arising from execution of the budget.

The comparison should be presented separately to show original budget and the supplementary budget, as well as the final budget amount and the actual amount on a comparable basis.

More fundamental is the requirement of the Public Expenditure and Financial Accountability Framework (PEFA) that makes comprehensive budget information to the National Assembly compulsory.

In other to comply with IPSAS, the information must include the following: Macro-economic assumptions including, at least, estimates of aggregate growth, inflation and exchange rate

Fiscal deficit, defined according to government Finance Statistics (GFS) or other internationally recognised standards

Deficit financing, describing anticipated composition

Debt stock, including details, at least, for the beginning of the current year Financial Assets, including details, at least, for the beginning of the current year Previous years’ budget outrun presented in the same format as the budget proposal, summarised budget data for both revenue and expenditure according to the main heads of the classification, including data for the current and previous year.

An explanation of budget implications of new policy initiatives with estimates of the budgetary impact of all revenue policy changes and or some major changes to expenditure programmes.

To the Senate president, the way forward is by first insisting that the 2017 budget be withdrawn and re-presented in the approved IPSAS budget compliant format, and in the six segments.

The capacity of IPSAS to open the budget process to greater scrutiny and openness is not in doubt. The major problem with the 2016 budget was the blunt refusal by the executive to use the approved IPSAS compliant budget format.

For instance, the Medium Term Projections of Aggregate Revenue, Expenditure and Financing by Economic and Programme and Actual of the two preceding years were not included in the 2016 Budget. Its inclusion would have provided a comprehensive overview of fiscal prospects to all stakeholders. The 2017 budget has same draw-backs substantially. It is budget with no history. There is no implementation report which is key.

The National Assembly should ask for it, otherwise the objectives (good roads, healthcare facilities, good schools, reduction of the unacceptable high level of unemployment and the poor standard of living) will remain a mirage.

So the good that Saraki owes Nigerians is to come up with a Budget Bill that would ensure compliance with the laws. The budget crisis is the refusal or failure of both the Executive and Legislature to adhere to laws.

The Fiscal Responsibility Act provides some road-maps for the preparation of the budget. Thankfully, the Senate insisted on the presentation of the Medium Term Expenditure Framework and its underlying Medium Term Sector Strategies, though the assumptions didn’t change.

Mr Senate president asked Mrs Kemi Adeosun, Minister of Finance, for her budget implementation report for the 2016 budget.

Though the Senator Ali Ndume Committee seems to have gone to sleep, the budget reform bill should set efficient and realistic timelines for the entire budget process and ensure that the Federal Government and, indeed, the sub-national governments adhere to the law.

This will impose some order and enable the National Assembly to adequately interrogate the budget bills before passage.

Emmanuel Ado writes from Kaduna. He can be reached via mayad497@yahoo.com 

 

Source news express

Posted 08/02/2017 12:29:04 PM

 

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