Budget timeframe bill, controversies and fiscal law violations
Sadly, most of the times, it is not for good, because the country has not only been at the bottom of the rankings, but has struggled to come out clean and failed as many times as it tried.
The homegrown Budget Inequality Index is one.
The other is Open Budget Index conducted by a global agency- Global Initiative for Fiscal Transparency Framework.
These have, at one point or the other, affirmed the country’s backwardness in budget matters. When shall it?
One of the measurements of these studies has included the level of participations of citizens.
But the other most challenging task that has given the country the low score is the tardiness between presentation and passage of the budget.
The circle has become a determining factor in not only budget performance, but also in mobilising the private sector, as well as other economic agents to influence various activities to support growth.
But the country has remained at the low point because of defiance to rules and stereo-types, experts have lamented.
For instance, it is still doubtful how many Ministries, Departments and Agencies in Nigeria that currently have strategic plans and how many others have theirs reviewed for over a decade?
This has left the implementation of policies characterised by “ideological confusion”.
Last year, Nigeria was ranked 142 out of 144 countries on the index of diversion of public funds on the World Economic Forum Index of official corruption.
These are partly borrowed funds earmarked for projects. Yet, little has the authorities realised that project timing has more to do with performance.
In public finance management and the budget cycle, there is time to prepare budgets, another for implementation, reporting, monitoring and evaluation and audit.
The cycle continues and rolls on and on, but guided by law, including the commencement and the end.
The Fiscal Responsibility Act 2007, provides that the Medium Term Expenditure Framework (MTEF) shall undergird and be the basis for the preparation of the yearly budget and is expected to be ready before the end of the second quarter in June.
It is to be endorsed by the Executive Council of the Federation before being sent to the NASS for approval. All these go to show the intention of the law for early budget presentation and approval.
This calendar, has not been respected by the budget authorities in a long while and it is the crux of the subject matter in discourse and the mischief in the existing law for which a remedy has been proposed now.
The basic knowledge of law is that law is as an instrument of social engineering used to move society on the path of progress and sustainability and if the lawmakers have decided to amend sections 81 and 121 of the Constitution to ensure appropriate timeframes that accord with the Nigerian Financial Year Act for the budget, they are on point.
The amendment, tagged: “Constitution of the Federal Republic of Nigeria, 1999 (Fourth Alteration, No. 28 Bill, 2017,” proposes that instead of the old order, where the President and Governors present the budget estimates at any time in each financial year, they would now be bound to present same not later than 90 days to the end of the financial year.
This amendment has secured the approval of both Houses of NASS and that of the required majority of State Houses of Assembly in accordance with section 9 of the Constitution. But the President has withheld assent to same.
Meanwhile, there are more questions than answers for the refusal.
One is: “Is it against national interest to pass budget early and run it from January to December?”
A knowledge-based institution- Centre for Social Justice (CSJ), said that Nigeria’s financial year is described in the Financial Year Act as the period starting from January 1 to December 31 of every year.
Besides, Section 318 of the 1999 Constitution (as amended) defines the financial year as any period of twelve months beginning on the first day of January in any year or such other date as the National Assembly may prescribe.
At the moment, the National Assembly (NASS) has not enacted any new date as the official beginning of the financial year, but in recent years, the financial year has been undulating and is more of a pendulum, depending on the time the lawmakers were done with the approval of the budget and when the President decided to assent same.
For the records, the 2017 budget estimates were presented to NASS on December 14, 2016, while that of 2018 was presented on November 7, 2017. These show the practice of late presentation of budgets in the last decade. The 2015 Financial Year was different from that of 2016, 2017 and the current 2018 year which just started last month.
Nigeria’s challenge is that instead of strengthening what we have, it opts for adjustments as dictated by personal interests.
The Lead Director of CSJ, Eze Onyekpere, said: “A common section has now been introduced by the NASS as part of Appropriation Acts. Section 11 of the 2016 Appropriation Act: “In line with the provisions of Section 318 of the Constitution of the Federal Republic of Nigeria 1999 as amended, this Act will run for a course of 12 months starting from the date it is assented into law”.
He noted that he 2016, 2017 and 2018 budgets were all approved and given assent very late in the year, after the end of the first quarter. With very late presentation, NASS also took their time before approval, which came out late.
The 2017 assent did not come until June and the same happened in 2018.
“The essence of the proposed amendment is to give the legislature adequate time to examine, vet and approve the budget before the end of the presentation year and the beginning of the New Year.
“The amendments proposes a new sub-section by giving a time line to NASS and State Houses of Assembly to pass the budget for the incoming year before the end of the financial year in which the budget estimates is presented,” Onyekpere noted.
For him, this would essentially, end the late presentations and approvals just as it has happened in the last three years and will now be ready on or before January 1 of every year.
Still not signing?
President Muhammadu Buhari had severally, including the 2018 budget signing speech, indicated his intention to return the financial year to the January-December timeline and even blamed the NASS for delayed approval of the budget.
This bill should have been a celebrated quick win for the administration, a low hanging fruit that would have been used to shore up the public finance management credibility of the administration.
As at now, no one has fathomed a reason for the refusal and the question that follows is: “What is the way forward?”
Onyekpere pointed out that Section 58 (4) and (5) of the Constitution provides as follows: “Where a bill is presented to the President for assent, he shall within thirty days thereof signify that he assents or that he withholds his assent.
Where the President withholds his assent and the bill is again passed by each House, by two-thirds majority, the bill shall become law and the assent of the President shall not be required.”
However, the civil society activists have said that the Constitution is clear and requires no further elaboration, but now behooves NASS to exercise its powers for the peace, order and good governance of the country and override the presidential veto without any further delay.
Dr. David Agu of the Heritage Institute, said: “Any other course of action will be a great disservice to the long suffering people of Nigeria. Nigerians do not expect that the executive legislative rift should get in the way of such clear-headed amendments.
“There must be irreducible minimum levels of cooperation between the two arms of government, no matter the situation; otherwise the government will need to throw in the towel and call for fresh elections under the doctrine of necessity.
What is going on now is part of the constitutional architecture that can only promote dictatorship in both the long and short term.”
He reiterated that an endeavour of this nature that has traversed both chambers of the NASS, with two thirds majority vote to amend sections and the resolution of not less than 24 State Houses of Assembly, cannot be held hostage by one person.
An economist, Dr. Uzochukwu Amakom, said the implication of the foregoing is that our economy is subjected to various degrees of uncertainty as stakeholders can no longer plan properly with the budget, fiscal and monetary policies as a guide, while things remain in a state of flux until the middle of the year.
“For instance, as at the time the first quarter budget implementation report of 2017 and 2018 became due (one month after the end of the quarter), there was no 2017 or 2018 budget in existence.
The same with the 2017 and 2018 second quarter budget implementation reports.
Even if the budgets were signed into law in June, releases and disbursements for implementing the capital votes had not started.
“Uncertainty is the bedrock of underdevelopment.
NASS, no doubt can amend any law but until that amendment is done, the undulating financial year, which changes from year to year has done so much havoc to the Nigerian people and the economy,” he said.