The co-founder and Chief Executive Officer, BudgIT, Seun Onigbinde, in this interview with TOBI AWORINDE, says Nigerians expect harmony between the National Assembly and the executive to deliver exceptional results in the execution of the 2018 budget
What are your thoughts on the 2018 budget?
A budget that precedes an election period will definitely be an object of politicking and this is what we have seen. The trend I see is that the National Assembly is piling micro projects in the budget, defeating the essence of the Federal Government. I think the N100bn, which the executive has given to them to fix constituency projects, is enough. It is shocking that they reduced allocations for over 4,000 projects and added another 6,000 projects as stated by the President. The first problem is that the budget is not a product of shared vision by the executive and legislature. This is sad because both houses of the National Assembly are nominally led by the majority of the governing party. We also have issues of rising deficit and low revenue returns that should be the conversation but no one is talking about that. The budget is not realistic as revenues and GDP growth are overly optimistic.
President Muhammadu Buhari complained about the legislature increasing the National Assembly budget from N125bn to N139.5bn. That is a difference of N14.5bn. What impact does this have on the Nigerian economy?
The National Assembly does not deserve more than N60bn to do its work. However, they (members) have been drawing N125bn from the national treasury and civic groups have complained that this is too much. A university or teaching hospital doesn’t get more than N20bn annually. Why should the parliament spend more? National Assembly payments are first-line charge, which means even if Nigeria sells a barrel of oil, it will be paid. They are immune from revenue fluctuations and this is the sad part. Rather than come forward with details of their expenses and ensure it is thoroughly efficient, they are involved in huge expenditure. Public expenditure in the midst of revenue shortage is a tough call and increase in National Assembly budget and other bogus MDAs costs limit public funding for capital items. We can’t take giant leaps without making our cost of governance relative to abysmal revenues.
What do you make of the National Assembly’s injection of 6,403 projects, totaling N578bn, while making cuts of N347bn in allocations to 4,700 projects by the executive?
I believe the National Assembly has the power to appropriate funds and that function is open-ended. The executive needs to find interpretation in the Supreme Court but I guess they are afraid of the outcomes. The estimates submitted by the executive can be tinkered with to any length but great power comes with great responsibility. Because you have the powers to modify the budget does not mean to appropriate for private gain or without alignment to the set vision. I don’t think the National Assembly has done the right thing and the President should not have signed it. Buhari had 26 days to review the budget. Why did he not return it in 10 days?
Why did you say that it was a bad idea for him to sign the budget?
He should not have signed the budget. The budget office should have reviewed the changes in 10 days and brought the points to the President’s notice. He should make his points known before signing the budget. There is a window for the budget to be reviewed and President should have taken advantage of this to set the record straight. I don’t think he took the right approach but there’s a chance for supplementary budget.
With the Federal Government consumed by electioneering towards the 2019 elections, is there a likelihood that the budget will lead to failure to execute projections or outright abandonment?
The first challenge we have is revenue performance. This will determine how the budget goes. The budget might not perform based on revenue and distractions of the election. Technically, we have just four months to implement the budget. We might not see great performance of the budget and the executive should be wary of micro projects that can be used to siphon public funds. Fund disbursement and procurement process is still within the purview of the executive and they should ensure strict discipline as regards the inserted projects.
Some of the projects affected by the cuts are the Mambilla Power Plant, Second Niger Bridge/ancillary roads, the East-West Road, Bonny-Bodo Road, Lagos-Ibadan Expressway and Itakpe-Ajaokuta Rail Project. What do you think will happen to these projects over the next one year?
If the executive is still serious about these projects, they will rapidly present a supplementary budget and make up for the cuts introduced by the National Assembly. This is why I emphasise that the budget should be a product of a shared vision. The National Assembly has claimed that the executive only budgets huge sums but fails to release them to the public. The executive has failed to provide details of funded projects to the public and only makes unsubstantiated claims. Transparency is lacking and this is a major issue.
Some major arterial roads and the mass transit rail project were also cut by a total of N7.5bn. What does this mean for the economy?
Cutting funding for roads is a huge setback in plugging the immense infrastructure gap that exists in Nigeria. However, if funds are budgeted and not spent, it does not still make a difference on how things change. I believe there is a chance for supplementary budget and they should swiftly work together towards fixing the infrastructure.
Do you agree with Buhari that it would be difficult, if not impossible, to implement the budget because of the alterations to the budget?
I am not a fan of the public bickering between the National Assembly and the executive. As previously said, the President should have returned the budget with his notes for the sake of posterity. We are in a democracy where dialogue and respect for another arm of government must be clearly defined. A budget is a policy document and he should have made a strong point on how cuts to critical infrastructure limits his vision. I have reservations on this “me vs them” approach of the President. He leads the Nigerian state and an arm of government. He should work together and raise his issues.
The President said he had hoped the 2018 budget would help his government deliver on Nigeria’s Economic Recovery and Growth Plan 2017-2020. Would that have been the case if the alterations were not made?
I don’t think cutting a cumulative amount of N5bn from the key capital projects in the budget will change the direction of the plan. We should not be sensational about this. It is evident that Nigeria does not have the revenue position to power the ERGP. The constitution gives a way out as long as the norms of respect and tolerance are not broken between the arms of government. The executive should use this.
Whose responsibility should it be to identify projects for execution in the project – the executive or the legislature?
Both arms of government can identify projects for the budget. Don’t forget that the National Assembly is a representation of the people. What we must take note of is responsibility. Are the arms of government using their powers with honour and a deep sense of responsibility? However, this is my position. I think there should be a Supreme Court interpretation. If this has happened in the last three budget cycles, why is the executive afraid of approaching the Supreme Court? We should have landmark cases to set the tone for the future and also set a consensus on constitutional review.
What do you make of the decision to cut provision for security infrastructure in the 104 unity schools across the country by N3bn?
I have not looked at this but to do this is absurd. This is what I mean that though the appropriation powers of the National Assembly is open-ended, it must not be abused and must be linked to the realities and national vision.
Will it be proper if the executive fails to release funds for the execution of those projects inserted by the legislature?
Funding the budget is an issue of priority and if revenue performance or defined vision does not support the execution of such projects, the executive should not fund those projects. However, it looks like the executive also lacks spending discipline. We have heard stories of the finance minister defying the executive order not to fund certain items. This is why every element of corruption in the public finance space starts with budget but the executive can also limit its funding. But do they have the discipline to ensure that priority projects are solely funded? Time will tell.