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Senate Commences Debate on 2016 Appropriation Bill

Party politics beclouds deliberations

Doggedly moving on and putting aside the recent controversies surrounding the 2016 budget presented to the National Assembly by budget debate continuesPresident Muhammadu Buhari on December 22nd 2015, the 8th Senate of the Federal Republic of Nigeria began its annual all important debate on the 2016 appropriation bill.

Sponsored by the Senate Leader, Senator Ali Ndume, a cursory look at the appropriation bill showed an estimated budget proposal of 6,077,680,000,000 (Six Trillion, Seventy-Seven Billion, Six Hundred and Eighty Million Naira) to be issued from Nigeria’s Consolidated Revenue Fund, of which:

N 351.37 billion is for Statutory Transfers

N 1.475 trillion is for Debt Service

N 2.648 trillion is for Recurrent (Non-Debt) Expenditure

N 1.845 trillion (inclusive of N 157 billion for Capital Expenditure and N 86 billion as interest on Capital Loans) is for Contribution to Development of Fund for Capital Expenditure.

Breaking down the 2016 budget further, Senator Ndume described the budget as a budget of ‘change’ which was guided by the 2016-2018 medium term expenditure framework (MTEF) and fiscal strategic paper (FSP) as well as the 2016-2020 medium term successor strategic plan. Senator Ndume also revealed that it was actually the first budget of the new government and it was based on a Zero Based Budgeting (ZBB) system which requires all programmes and projects to be fully justified by the Federal MDAs (ministries, departments and agencies).

Outlining the stimulation of a competitive economy focused on infrastructural development, prioritising the welfare of Nigerians and addressing the immediate problem of youth unemployment and underemployment as some of the aims of the 2016 budget, the Senate Leader disclosed a benchmark price of $38 per barrel, a production estimate of 2.2million barrels of crude produced per day and an exchange rate of 197.5 Naira to the dollar as the 3 major assumptions of the budget (as opposed to $53 per barrel, 2.28 million barrels per day and 190 Naira to the dollar exchange rate in 2015). Other budget assumptions included broadening the nation’s tax base, proper linkage of budgeting to strategic planning, full implementation of the Treasure Single Account (TSA) and the assurance that all MDA’s present their budget in advance and remit their operating surpluses.

The ensuing debate on the floor of the upper arm of the legislature however largely toed  political party lines rather than economic ones as members of the opposition People’s Democratic Party (PDP) were generally opposed to many aspects of the budget, describing it as a budget of change in the wrong direction (fraud) while members of the ruling All Progressive Congress (APC) stood by the President Buhari’s submission, describing it as historic and unique.

Commencing the debate, Senator Eyinnaya Abaribe (PDP) lampooned the budget as being ‘dead on arrival’ since the price of crude oil had since plummeted in the international market. Requesting for the budget to be withdrawn, Senator Abaribe asked why the Honourable Minister of Finance had not yet appeared before the Senate to defend the budget and why the 3.9 billion naira was needed for renovations in the Presidential Villa at Aso Rock as well as the geometric increase of feeding expenditure in the Presidential villa from about N580,000,000.00 or thereabouts in 2015 under the PDP to about 1.8 billion naira under the APC budget which he said can’t represent ‘change’.

Responding swiftly, Senator Ahmad Lawan (APC) blamed some parts of the budget (such as its high debt service cost) on the previous PDP led administration who had ‘stolen’ a lot of government funds. Describing the 2016 appropriation bill as his 17 budget debate in the National Assembly, Senator Lawan also censured corruption as the biggest problem of any Nigerian budget because they have never been even as much as 40% budget implementation in the nations’ young democracy apart from the 2005 budget.

Many subsequent senators who debated the budge accordingly spoke on party lines and also gave their well-informed recommendations for the country.

Deputy Senate President, Ike Ekweremadu reminded the Senate that there were as much as 30 political parties in Nigeria and it was not necessary for the Senate to spend time toeing party lines. Describing the 6.077 trillion naira budget as one that presents a false sense of prosperity to Nigerians, Senator Ekweremadu advocated an increase in Nigeria’s revenue generation  through an increased taxation of luxury goods by 200-300% or taxing mobile communication services instead of continually borrowing money to service the budget. Noting that the Senate eventually has the final say on the budget, Senator Ekweremadu called on various MDA’s to concentrate on existing projects instead of presenting new ones, while reminding the Senate from the history of the Great American Recesion of the 1930’s that there was a need for everybody to make sacrifices.

Chairman of the Senate Committee on Privatisation, Senator Ben Murray Bruce however remarked that the premise of basing the budget on an exchange rate of 197.5 naira to the dollar and $38 per barrel for the price of crude oil may or may not have been right as the ‘days of oil’ have almost come to an end since many industrialised nations are beginning to move away from fossil fuels to other renewable energy sources.

Other contributors to the day’s debate included Senators Balau Jibrin, Philip Aduda, Ali Wakili, Babajide Omoworare, Suleiman Adokwe, Gbenga Ashafa, John Owan Enoh, Rose Okoh, Emmanuel Paulker, Peter Nwaboshi, Barnabas Gemade, Chukwuma Utazi, Shehu Sani, Isa Misau, Rafiu Ibrahim, and Ibrahim Gobir

The budget debate continues on Thursday.

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