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Stop illegal, wasteful expenditure, increase capital provision to 40 % CWP tells FG

by Business News Report

By Omoh Gabriel
Nigerians being represented by Citizens Wealth Platform will this morning be telling the federal government to increase the capital vote for 2013 to not less than 40% of the budget, dedicate 26% and 15% respectively to education and health, and remove all illegitimate and wasteful expenditure. They will be stating that if there must be a vote for refreshment and meals, it must be reasonable within the context of the level of poverty in the country and the actual needs of the office. Welfare packages must be properly defined and contextualized considering that personnel expenditure has already been included in the budget.
CWP is a group of non-governmental and faith based organisations, professional associations and other citizens groups dedicated to ensuring that public resources are made to work and be of benefit to all. Their position which has been carefully articulated will be presented at today’s 2013 budget consultation forum holding at Eko Hotel with the Minister of Finance. The body will in the first instance tell the government that the 2013 budget should be predicated on the 2013-2015 Medium Term Expenditure Framework (MTEF). Presentation to government a copy of which Vanguard sighted said “Section 18 (1) of the Fiscal Responsibility Act (FRA) states that the MTEF shall be the basis for the preparation of the estimates of the revenue and expenditure required to be prepared and laid before the National Assembly under section 81 (1) of the 1999 Constitution, as amended. The MTEF is to be prepared and endorsed by the Federal Executive Council before the end of June every year.
“We are not aware that the MTEF 2013-2015 has been prepared, endorsed by the Federal Executive Council and approved by the National Assembly as required by section 14 of the FRA. Going forward with the 2013 budget consultation without an under girding MTEF would appear to us as putting the cart before the horse and in violation of the spirit and letter of the FRA.
“Secondly, for a consultation of this nature to be meaningful and genuine, it should be based on a consultation paper which provides the contours of the major macroeconomic indicators upon which the budget will be based, budget implementation reports including the quarterly reports stipulated by section 30 of the FRA and the end of year budget implementation report required under section 50 of the FRA. As we write, there is no single budget implementation report for the year 2012 on the website of the Budget Office of the Federation and the 2011 Full Year Report is not available to Nigerians. Best practices further demand mid-year review of the 2012 budget. The mid-year review of the budget discusses the changes in economic outlook since the budget was enacted, updated revenue and expenditure estimates and a revised forecast for the full fiscal year and its effects on the budget. The availability of these documents to the public would have facilitated dialogue, informed and meaningful contributions from stakeholders at the forums.

According to the group’s position “There are a number of areas from which savings can be made in 2013. The first is that Government had set up the Expenditure Review Committee (Professor Anya O. Anya led Committee) and the Presidential Committee for the Rationalization and Restructuring of Federal Government MDAs (Oronsaye led Committee). The recommendations which would reduce the bloated overhead and personnel expenses of FGN should be implemented through an informed balancing of fiscal and social concerns in the reforms they propose. Also, the executive should stop the delay in presenting the Petroleum Industry Bill to NASS. It is recommended that NASS should accelerate the passage of the bill once presented. Implementation of its proposals after enactment would release not less than N3trillion for FGN which should be channeled into capital expenditure”.
The body will argue that “Federal budgets over the years have not addressed the issue of adequate funding for the social sector particularly education and health. At no time have our budgets come close to the 26 per cent and 15 per cent of the budget recommended for education and health respectively. If less endowed African countries have been meeting these targets or come close to the targets, Nigerian has no reason for not meeting same. It will propose that the government “dedicate 26 per cent and 15 per cent respectively to education and health in the 2013 budget provision insisting that adequate allocations be dedicated to women’s health, girl child education and the education and health needs of vulnerable groups. Government must however make sure that the funds so appropriated are used judiciously through in-built mechanisms for transparency and accountability.
The NGO will also beret government on what it termed Illegitimate and Wasteful Expenses saying “We consider it absurd that a government that wants to make optimum use of available resources should budget billions of naira in refreshment and meals for MDAs. We further consider it improper that when a budget has made provisions for legitimate earnings of civil servants, appointed and elected officers, another subheading for welfare also appears in the budget. What exactly is welfare and to what purpose are these sums applied? It is our view that such appropriation is illegal and unknown to Nigerian fiscal jurisprudence. The welfare of the staff of these agencies is already taken care of in their personnel budget. For instance, the Ministry of Finance has over N260million in refreshments and meals and over N310million in welfare packages. A situation where the Ministry of Petroleum Resources will have budgetary approval of N126million for spectacle advances beats the imagination of every reasonable person”. It will propose that as from 2013, government should remove all illegitimate and wasteful expenditure. If there must be a vote for refreshment and meals, it must be reasonable within the context of the level of poverty in our country and the actual needs of the office. Welfare packages must be properly defined and contextualized considering that personnel expenditure has already been included in the budget”.
The NGOs will further slam government on end budgetary slush funds. The body of NGOs will state that “It appears that the federal budget is filled with apparent slush funds that any reasonable person cannot identify the use to which such votes are to be put. The budget of NAPEP in 2012 is a clear demonstration of such nebulous budgeting. Excerpts include: POVERTY REDUCTION GRANT SCHEME, OYO NORTH SENATORIAL DISTRICT- N222,266,667; POVERTY REDUCTION GRANT SCHEME, OYO SOUTH SENATORIAL DISTRICT- N150,200,000; POVERTY REDUCTION AND EMPOWERMENT SCHEME IN BAYELSA WEST SENATORIAL DISTRICT- N222,266,667; POVERTY ALLEVIATION PROGRAMME FOR CROSS RIVER CENTRAL SENATORIAL DISTRICT-N222,200,000; POVERTY ALLEVIATION PROGRAMME FOR CROSS RIVER SOUTH SENATORIAL DISTRICT – N222,266,667; POVERTY ALLEVIATION PROGRAMME FOR CROSS RIVER CENTRAL SENATORIAL DISTRICT, CROSS RIVER STATE- N250,000,000. There are no details and specific activities for these allocations and how do you monitor a vote whose purpose is unknown to you?” All votes in the budget must be for specific and identifiable purposes and this should not just be known to MDA officials alone but known to the public through the way and manner it is stated in the budget.
The body will also inform government functionaries that “Even with the little resources available for capital expenditure, the budget is suffused with thousands of projects which available resources cannot pay for in the medium term. This has led to so many abandoned and uncompleted projects. Projects under the Ministry of Works clearly illustrate this anomalous situation. A presidential committee has identified that over N10trillion will be needed to complete these projects. It thus recommends that “For 2013, there should be a moratorium on new projects and the focus should be on completing projects that will contribute most to government’s policy of poverty reduction, economic growth and improving industrial capacity utilization”.
The NGOs will at today’s meeting say that “Over the years, the appropriated capital vote has never been fully expended leading to extensions of the financial year from December to March of the new year in violation of the Financial Year Act which defines the financial year as the period between January 1 and December 31 of every year. The leadership of MDAs (Ministers and the Accounting officers) apparently treats capital budget implementation with levity. From the figures rolled out by the Minister of Finance for 2012, only N404.1billion has so far been released to MDAs and not all of it has been cash backed. The utilization rate at the end of the first quarter was a paltry N94.1billion. The utilization rate at the end of the second quarter is not yet publicly available. “Apparently, the rate will not be encouraging. Even if the whole sum has been utilized, it is still not a good performance when pitted against the N1.5trillion capital vote for the year. The amount so far released by mid-year is a paltry 27 per cent of the overall capital vote! In the past, new projects have been admitted into the budget without detailed designs, drawings, specifications and feasibility studies. Votes for construction were included in the budget without acquisition of land or compensation to communities. “Indeed, these were some of the challenges of budget implementation identified in the 2009 and 2010 Full Year Budget Implementation Reports”.
It will recommend that “In collaboration with the legislature, the executive should consider administrative and penal sanctions against accounting officers who sit on their capital votes for no identifiable reason except the well known human integrity and capacity deficit ravaging the country. The Budget Office of the Federation must commit to conduct quarterly budget performance review sessions for MDAs to demonstrate progress on budget implementation involving detailed review of actual performance against the plan. If there are major deviations, the MDA should be required to submit a remediation plan. The executive through the President and the Minister of Finance must also give Nigerians a guarantee that they will implement the budget as passed by NASS once it is signed into law. This recommendation is coming from the background of accusations by the legislature and denials by the executive that capital budget implementation has been restricted to only those projects that were included in the original executive budget before the input of NASS.
“In the exceptional event of very important new projects, they should only be admitted into the budget after detailed designs, drawings, specifications and feasibility studies have been completed. Issues relating to land acquisition should be settled before appropriation for construction”.
It will state that FGN should invest in new refineries in 2013, even if it may privatise them shortly after they have started full production, and that Poverty reduction should be an inclusive and holistic exercise which should address issues such as the educational system that produces graduates without skills that are relevant to the economy, empowering skilled graduates with entrepreneurial education and seed capital, harmonizing and streamlining trade, fiscal and monetary policies to spur local production of goods and services and above all plugging the leaking pipes of corruption which divert money meant for infrastructure and social services. It will also say that local projects should either be undertaken in collaboration with state and local governments or grants should be given to the lower tiers of government to construct them. This will enable the local governments to budget for their maintenance in subsequent years.
It will further urge the Minister of Finance to immediately set machinery in motion for the delimitation of federal, state and local government debts. Cost Benefits Analysis should be prepared and made available to the public for any project to be funded with the proceeds of borrowing. Indeed, new borrowing should be tied to specific identifiable projects to allow Nigerians follow up on the progress of work and be able to compare same with the quantum of resources borrowed. They also propose that “Now is the time to start the executive legislative engagement so that by the time the budget is submitted to NASS, all areas of disagreement have been resolved and the budget will have a smooth passage. The budget of all agencies enjoying statutory transfers should be disaggregated. They include the National Judicial Council, National Assembly, Niger Delta Development Commission, Universal Basic Education, Independent National Electoral Commission and the National Human Rights Commission. Transparency and accountability should be the watch-word from now on. FGN should take immediate and urgent security action and steps to stop the oil theft.

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