The battle line seems drawn as Chairman, House Committee on Finance, Abdulmumin Jubrin challenges Finance Minister Okonjo-Iwaela and Central Bank of Nigerian (CBN) Governor Sanusi Lamido Sanusi to public debate. Jubrin was the Chairman, Joint Committees of the Legislative Budget and Research of National Planning and Committee on Aids, Loans and Debt that considered the 2013-2015 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP). Victor Oluwasegun and Dele Anofi report.
The Legislative Budget & Research Committee of the House of Representatives is the engine room for the National Assembly?s Budget and Research Office (NABRO). For the first time since the return of democracy in 1999, the office actually did an analysis of the budget (in this case, the 2013-2015 Medium Term Expenditure Framework submitted by President Goodluck Jonathan) as required in the Fiscal Responsibilities Act, 2007. The committee in conjunction with the House committees on Finance, National Planning & Economic Development and Aids, Loans & Debt Management , in its report on the MTEF, recommended that the benchmark be increased from $75 to $80 per barrel of crude oil. This has been a source of conflict between the House and the Executive.
Indication that the battle between the House and the Executive on the 2013 budget may have just have begun, emerged when the Chairman, House Committee on Finance, Dr. Abdulmumin Jubrin challenged the Minister of Finance Dr. Ngozi Okonjo-Iweala and the Governor of Central Bank, Sanusi Lamido Sanusi to a public debate on the feasibility or otherwise of the $80 benchmark for the 2013 budget.
According to the lawmaker, there seems to be more to it than meet the eye concerning the stiff opposition from the Executive to the slight increment of $5 to the proposed $75 . He said the economic management team of President Goodluck Jonathan must, therefore, be courageous enough to prove beyond doubt why the $80 benchmark should be discarded. Jubrin noted that the only way to convince Nigerians is for both parties (House of Representatives and the Executive) to engage in a public debate for Nigerians to have the benefit of merits and demerits of the contending issue.
Besides, he posited that the Executive must be able to disprove 2013 forecast for international oil price at between $100to $120. According to him, key international forecast agencies, like the Energy Information Agency, the Barclays, the Credit Swiss, the Dutch Bank and the City Group put their projections at between $ 120 and $100 while the average of all their forecast was pegged at between $100 and $105.
He reiterated Speaker Aminu Tambuwal?s emphatic declaration that the 2013 budget would be anchored on $80 bench mark. Jubrin, however, expressed confidence that the Executive would have no better argument against the House?s position. In his words: ?They will not have any superior argument, mark me and if they can, the Executive that I know, would have responded the first time we started talking. They have nothing superior to tell Nigerians than this point we have given. This is a pro-people analysis and position and they don?t have anything to say other than this. I am challenging them to a public debate, the Minister of Finance, the Governor of Central Bank, the DG of Budget Office and others involved in drawing up the document. Let us all face Nigerians a put our facts before them?.
To buttress his argument on the defects inherent in the budget proposal of $75 benchmark by the Executive, the lawmaker regretted that those saddled with the management of the economy seemed to be incompetent and unwilling to consult widely in the process of preparing the document.
?A very important factor that we discovered and which is quite disgraceful is that the position of MTEF is at variance with the position of most of these MDAs. Most of these agencies don?t even know the content of MTEF. We were the ones that gave them copies of the MTEF. So, it is convenient for us to draw conclusion that the MTEF is just a product of one to three people that are saddled with the management of our economy. There wasn?t wide consultation, it is not a national consultation but just a product of few people that believe that they can sit and write policies for this country and write MTEF for this country and write the budget of this country, which is why I said it without mincing my words,? he said.
The lawmaker also urged Nigerians to be wise to the antics of the Executive that would always want to present one aspect of an issue rather than avail the people the opportunity of all aspects to the issue. Contrary to the Executive?s claims that savings, among other parameters, would be badly affected if the benchmark was jerked up to $80, Jubrin said the Executive has not been forthcoming on the true analysis of the situation. While he stressed that the lawmakers were not against savings, he regretted that the country?s economic managers have not been fair to Nigerians through unreasonable savings. He said, ?You know that crude is going for about $110 as it is, if we peg the benchmark at $75, for instance, if the international price of crude as at today is $100 and we peg the benchmark at $75, it means that for every barrel of crude that you sell, $75 will go into financing of the budget and extra $25 should go into savings because this savings is the excess crude account and the Sovereign Wealth Fund. So what we are saying is that we are increasing the benchmark to $80 because we are convinced, after our analysis, that it is safe for us to increase it by $5. The implication of this is that rather than save $25, you will now have $20 to save. All we are taking away from them is just $5 out of the excess to service our budget deficit. So why are they resistant to it? Are we throwing the money in the river or are we taking it to go and share for our people in the villages? No, we are using it to help the economy; rather than taking it and dumping it in that place like European and American banks at a giveaway interest at the expense of the country, we are saying they should take part of it and invest it today which is the bone of contention?.
Another loophole which the Jubrin picked in the budget proposal is the bloated recurrent expenditure which he said the government has not been able address. He expressed disappointment that despite all the noise over cutting the cost of running government, the Executive has not been able to reduce recurrent expenditure to an appreciable level. ?These are part of the problems that we addressed during the MTEF. We had expected that in the MTEF because it is a medium term plan, so it is for 2013 ? 2015, we will receive a systematic and clear-cut strategy to reduce recurrent expenditure drastically but it is not contained in the MTEF. I am so disappointed in the Minister of Finance because we made recommendation about that in the earlier MTEF.
?I had thought that one area where she would have shown her competence is to be able to drastically reduce recurrent expenditure and if you ask them how they intend to reduce it, they will not give you figure but percentage. They are taking advantage of Nigerians because a lot of people are not enlightened about these things. Now, what they are saying is that they have reduced the recurrent expenditure by 3%. Why are they scared of converting it to monetary value? Let people understand from a real perspective of the budget provisions. The implication of this is that they want to continue to promote recklessness in spending and that shows how incompetent they are?,
Jubrin also faulted the claims of the Executive that the $5 increment would put pressure on exchange rate and inflation. He said ?I told all the agencies that came during our engagement during the MTEF deliberations to quantify the impact that a $5 will have on our exchange rate and on inflation; they have not been able to do that. We have also asked them if they have problem with this increment just for the singular reason of reducing the deficit and consequently reducing government domestic borrowing to create space for the private sector but they have not responded. The final reason they always give which is very important is that it will make more money available for the State and Local Government which they will mismanage because they believe that every Nigerian is corrupt and that they are the only people who are credible. I am not holding brief for State Governors but I think it is an insult to all State Governors that being against $5 was because it means more money for State Governors to misuse. I am calling on the State Governors to listen to this and now respond to the Ministry of Finance and the Minister. When we talk this way, they say that we want to bring down the country, shut down the economy.
Jubrin however advised the Finance Minister, Ngozi Oknojo-Iweala to resign her appointment if she cannot manage the economy with the $80 benchmark as the House would not shift ground on its decision. He said for the Minister to undermine the Appropriation Act when it becomes operational would amount to breaking the law. ?The Minister of Finance would have to resign her position If she can not comply with the provisions of the Appropriation Act because that would amount to breaking the law. By the time the budget is passed, it becomes law that everybody must comply with. We are talking from the point of law because our position on the issue of bench mark would be backed by the law and if she cannot relate with it, it would be better for her to resign rather break the law?.
Culled From:The Nation
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