A Civil Society organization, the Centre for Social Justice, CSJ, yesterday, contended that the Presidency may have erred in the sight of the law in the preparation and preparation of the 2017 budget with the approval of the Medium Term Expenditure Framework, MTEF.
In his preliminary review of the 2017 Federal Appropriation Bill, Executive Secretary of the CSJ, Mr. Eze Onyekpere, argued that there cannot be an executive budget submitted for legislative approval without the approval of the MTEF.
He said, “Some key challenges arising from the budget speech and the presentation include: The fact that there is no approved Medium Term Expenditure Framework 2017-2019. Section 18 of the Fiscal Responsibility Act, FRA, states: “Notwithstanding anything to the contrary contained in this Act or any other law, the Medium-Term Expenditure Framework shall- (1) be the basis for the preparation of the estimates of revenue and expenditure required to be prepared and laid before the National Assembly under section 81 (1) of the Constitution. “(2) The sectoral and compositional distribution of the estimates of expenditure referred to in subsection (1) of this section shall be consistent with the medium-term developmental priorities set out in the Medium-Term Expenditure Framework”. “Thus, strictly speaking in law, illegality may have occurred in the preparation and presentation of the budget.” He expressed concern that the N2.36 trillion deficit in the budget is to be financed mainly by borrowing, noting that this would further add to the country’s already high debt profile. Onyekpere further stated that the lack of a clear path for the resolution of the insurgency in the Niger Delta region will affect the realisation of the projection for oil revenue. He said, “The President indicated that disruptions in crude oil production partly contributed to significant shortfalls in projected revenue. “If the country could not meet the 2016 projection, and without resolving the challenge, it is likely that the 2017 projection will not be met. But the $42.5 benchmark price seems realistic if members of OPEC and other oil producing nations stick to the current path of cutting down on production. “The second is that it is not clear whether the N565.1 billion recovered loot is already in the bag or being expected. This should be clarified by the fiscal authorities. If it is an expected sum, then it should not be made a revenue source and should only be appropriated when it has already been realized through a supplementary appropriation.” To this end, he said the National Assembly should approve the MTEF before commencing work on the budget, adding that the National Assembly is expected to do a thorough vetting of the proposals before their approval and forwarding for presidential assent. Continuing he said, “Efforts should be made to speed up reform bills like the Petroleum Industry and Governance bill and the use of incorporated joint ventures instead of cash calls awaiting the budget. “The Presidency should continue good faith engagements and negotiations with Niger Delta militants to restore peace to the troubled region so as to increase crude oil production. NASS should also ensure that revenue projections are based on empirical evidence; consider the 2016-2018 External Borrowing Plan and come up with a position; and if possible, trim budget expenditure to be in harmony with realistic and realizable revenue projections.
He said, “Some key challenges arising from the budget speech and the presentation include: The fact that there is no approved Medium Term Expenditure Framework 2017-2019. Section 18 of the Fiscal Responsibility Act, FRA, states: “Notwithstanding anything to the contrary contained in this Act or any other law, the Medium-Term Expenditure Framework shall- (1) be the basis for the preparation of the estimates of revenue and expenditure required to be prepared and laid before the National Assembly under section 81 (1) of the Constitution. “(2) The sectoral and compositional distribution of the estimates of expenditure referred to in subsection (1) of this section shall be consistent with the medium-term developmental priorities set out in the Medium-Term Expenditure Framework”. “Thus, strictly speaking in law, illegality may have occurred in the preparation and presentation of the budget.” He expressed concern that the N2.36 trillion deficit in the budget is to be financed mainly by borrowing, noting that this would further add to the country’s already high debt profile. Onyekpere further stated that the lack of a clear path for the resolution of the insurgency in the Niger Delta region will affect the realisation of the projection for oil revenue. He said, “The President indicated that disruptions in crude oil production partly contributed to significant shortfalls in projected revenue. “If the country could not meet the 2016 projection, and without resolving the challenge, it is likely that the 2017 projection will not be met. But the $42.5 benchmark price seems realistic if members of OPEC and other oil producing nations stick to the current path of cutting down on production. “The second is that it is not clear whether the N565.1 billion recovered loot is already in the bag or being expected. This should be clarified by the fiscal authorities. If it is an expected sum, then it should not be made a revenue source and should only be appropriated when it has already been realized through a supplementary appropriation.” To this end, he said the National Assembly should approve the MTEF before commencing work on the budget, adding that the National Assembly is expected to do a thorough vetting of the proposals before their approval and forwarding for presidential assent. Continuing he said, “Efforts should be made to speed up reform bills like the Petroleum Industry and Governance bill and the use of incorporated joint ventures instead of cash calls awaiting the budget. “The Presidency should continue good faith engagements and negotiations with Niger Delta militants to restore peace to the troubled region so as to increase crude oil production. NASS should also ensure that revenue projections are based on empirical evidence; consider the 2016-2018 External Borrowing Plan and come up with a position; and if possible, trim budget expenditure to be in harmony with realistic and realizable revenue projections.
“The budget should be realistic, implementable and in harmony with available resources.
Finally, the President is enjoined to seek the amendment of the Public Procurement Act rather than use executive orders to abridge the procurement implementation process.”
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