Another round of quarrel looms between Executive and Legislature
Nearly four months into the new year, the minister of finance, Olusegun Aganga has warned that the 2011 budget passed by the National Assembly is too unwieldy to be implemented. In a statement that may well lead to another round of quarrel between the executive and the legislature, Mr. Aganga said the only way the federal government can implement the budget is by slicing off a chunk of the fiscal appropriation act recently approved by the lawmakers.
Mr. Aganga, who spoke from London, through his Special Assistant on Media, Okwudili Ojukwu-Enendu, said that the approved budget is too expansionary, and its high levels of deficit and borrowing makes it a risky plan.
"The 2011 budget is supposed to signal the beginning of fiscal consolidation, but we now have another expansionary budget, which is unimplementable. If we are to build our economy on a solid foundation and avoid the boom and bust of the past, it is critical that we embrace discipline in the way we manage public finances. We cannot continue like this.
"I will be advising that we engage with the National Assembly to resolve these areas of concern. We have always had a very good relationship with the relevant National Assembly committees. So, I am optimistic that we can resolve these areas of concern very quickly," he added.
Two concerns in one day
The minister's apprehension is the second such concern raised by a senior federal government official in less than 24 hours, on issues affecting the 2011 budget.
At the end of the 75th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, the Central Bank of Nigeria (CBN) governor, Sanusi Lamido Sanusi, told journalists that the high expenditure outlay in the budget was not supportive of the Central Bank's drive for monetary policy effectiveness.
"The current fiscal stance (in the budget) is inconsistent with the objective of maintaining stability in exchange rates, prices and interest rates. The Committee, therefore, believes that unless the fiscal stance is reversed, the economy would have to bear a high cost in terms of pressure on foreign reserves, high interest rate and/or higher level of inflation," Mr. Sanusi warned.
On December 15 last year, President Goodluck Jonathan presented a budget estimate of N4.2 trillion for 2011, with a crude oil benchmark pegged at $65 per barrel.
However, last week, the National Assembly in approving the budget proposal discarded the estimates, passing an Appropriation Bill of N4.9 trillion while raising the oil benchmark price from the proposed $65 per barrel to $75.
More money for lawmakers
Iyiola Omisore (PDP, Osun) and the chairman, Senate Committee on Appropriation, who said that the budget was passed after consultations with Ministry of Finance officials, told journalists that during deliberations on the estimates, the executive brought additional proposals of N312 billion to augment key priority expenditures of ministries, departments and agencies (MDAs).
Mr. Omisore was however silent on the reasons that informed the legislators to raise the National assembly's share of the budget from N111.23 billion to N232.73 billion, an increase ofN121.5 billion, or 4.7 per cent of the entire budget. He was also not forthcoming about the additional increment of N433 billion which jerked the final estimates to the N4.971 trillion the lawmakers approved.
Mr. Aganga had warned lawmakers during a budget defence session last month on the implications of tampering with the benchmark figure of $65 per barrel, saying it could spell doom for the economy should the oil price fall below that level during the year, considering that the excess crude oil account (ECA), which is almost depleted, may not be there anymore to augment the budget as was done last year.
Highlights of the budget which was passed on the last legislative day before the Assembly adjourned for the April general elections include N496 billion for statutory transfers; N445 billion for debt servicing; N2.46 trillion for recurrent expenditure, and N1.56 trillion for capital expenditure.
Mr. Ojukwu-Enendu said that it was not clear yet how the matter would be resolved as the President may withhold his assent until the grey areas are cleared or he could sign it and later send a supplementary appropriation bill to the National Assembly to correct the anomalies.
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