Because there is a danger that many people, including Chief Olusegun Obasanjo, have the impression that budgets and the budgetary process are merely part of a ritual, not unlike the Independence Anniversary parade, where people listen as the president speaks for about an hour without meaning what he says, so we might as well start with a definition.
What is a budget? Specifically, what is a national budget of the type that Obasanjo read Tuesday, October 12, 2004? And why did he have to prepare it? A budget in this context can be defined as an annual government statement of a country’s income from taxes and other sources and how it will be spent. And the reason for preparing it is simple.
Section 81 of the Nigerian Constitution makes its preparation unavoidable:
(1) “The President shall cause to be prepared and laid before each House of the Assembly at any time in each financial year estimates of the revenues and expenditure of the Federation for the next financial year.
(2) “The heads of expenditure contained in the estimates (other than expenditure charged upon the Consolidated Revenue Fund of the Federation by this Constitution) shall be included in a bill, to be known as an Appropriation Bill, providing for the sums necessary to meet that expenditure and the appropriation of those sums for the purposes specified therein.”
Thus, the preparation, presentation and implementation of the annual budget is a duty imposed on the president by the Nigerian Constitution; and once passed by the National Assembly, it becomes a law that his government must obey by faithfully implementing the budget, without any alteration except as provided for by the Constitution itself.
But we have seen how many times the Constitution has been disregarded by Obasanjo times without number. He has engaged in extra-budgetary expenditure as if the budget is drawn up by him only to be breached. Section 80 of the Constitution is very clear about this, but most often it is invoked in the breach and often only after fact, in order to legitimise what are clear illegalities by the Executive.
(2) No monies shall be withdrawn from the Consolidated Revenue Fund of the Federation except to meet expenditure that is charged upon the fund by this Constitution or where the issue of those monies has been authorised by an Appropriation Act, Supplementary Appropriation Act or an Act passed in pursuance of section 81 of this Constitution.
(3) No monies shall be withdrawn from any public fund of the Federation, other than the Consolidated Revenue Fund of the Federation, unless the issue of those monies has been authorised by an Act of the National Assembly.
(4) No monies shall be withdrawn from the Consolidated Revenue Fund or any other public fund of the Federation, except in the manner prescribed by the National Assembly.
The essence of budgeting is to create the law that will make for the legal control and management of public monies. It is an aspect of development planning which this country seemed to have abandoned with the overthrow of the regime of General Yakubu Gowon. And without a plan everything becomes arbitrary and with the involvement of the military it becomes doubly painfully more so.
National Development Planning in Nigeria began in 1945 just as the Second World War was ending. Called Colonial Development Welfare Scheme then, it was ostensibly for the orderly development of British colonies; though in reality it was more of a programme to provide employment to demobilise British World War veterans. The scheme covered the period 1945 to 1954, when Nigeria became a federation.
The second plan was prepared to cover the 1955-1959 period; and this saw Nigeria to the eve of independence. The First National Development Plan for the 1962-1968 period, though disrupted by the coup of 1966, was faithfully executes, and as the military settled down in governance, the plan period was extended by Gowon to 1970. To the end, government was meticulous in following the plan to the letter.
The Second National Development Plan covering the oil boom years from 1970 to 1974 was drawn and executed by the Gowon regime. The Third Plan covering the period 1975-1980 was already drawn up by the time Gowon was overthrown. Both the colonial and Nigeria’s post-independence governments respected the plans, which provided them with the foundation on which they based their budgets. The ouster of Gowon’s regime effectively sealed the fate of national development planning in Nigeria.
The planning process begins at the grassroots level; and everybody is involved at all stages of the planning process. Every local government draws up its plans in the light of its goals in its area of responsibility; and the details are sent to the region/state which in turn collates everything and despatches its own consolidated plan to the Central Planning Unit and the Joint Planning Committee. Following negotiations and much give-and-take, a single document encompassing the national plan aspiration results; and this is the National Development Plan. At the final stages the National Economic Council meets to approve components of the plan. Even the implementation proceeds in planned stages. The projects are executed beginning with the unfinished on-going projects of the previous plan period and then onto the others.
Each year thereafter, the annual capital budget is extracted from the approved national plan; and the budget is finally drawn up for presentation. Nothing can go into the budget unless it is already in the plan. This is the planning process that many thought Obasanjo would reintroduce to the nation’s development strategy when he won the election in 1999. It was a very big disappointment indeed when even the contrived, arbitrary budgets that were drawn up annually since 2000 were effectively subverted by him.
So far Nigeria has witnessed five budgets by Obasanjo and none of was executed up to 50%. Even in their preparation the budgets were full of arbitrary allocations that could not be defended on any rational, patriotic ground. And during the time of implementation, several extra-budgetary expenditures and unplanned disbursement to foreign recipients became the order of the day.
For instance, even if hosting the Commonwealth Heads of Government Meeting, CHOGM, and the staging of COJA games were an international obligation, the situation of Nigeria’s economy dictated that the country ought to have asked to be excused. It was in fact no obligation at all. Obasanjo just wanted it; and, considering the circumstance, he was the only leader in the world who would, and could, have done that to his nation.
The total cost of hosting these two events, including the stadium in which the COJA games took place, was in excess of N100 billion. While the cost of the stadium was initially put at N69 billion, it underwent several unexplained variations, and to date, nobody has accounted to the Nigerian people exactly how much money was spent on either COJA or CHOGM. In a glaring contrast, agriculture, which, as a contributor of 40% of GDP, and also the biggest employer of labour in the country, and therefore the single most important sector in Nigeria, got a paltry 2%. Indeed, in more than five years of this government the agricultural sector received only between 1% to 2% of the Federal budget.
Whatever Obasanjo apologists may say about this, it is difficult to avoid the conclusion that he is punishing the north, the bulk of whose people depend on agriculture, and which, even with all the neglect, has continued to contribute up to 80% of total agricultural output in the country.
As Professor Ango Abdullahi said recently, oil, important as it is in Nigeria’s economy, is only a foreign exchange earner, contributing a mere 12% of the GDP; and agriculture is the real mainstay on which the whole economy depends. Without agriculture and with all the oil, Nigeria will, perhaps, not have been a viable entity – at least not for this long. During the First Republic when agriculture didn’t suffer the neglect and decline we see it going through today, in addition to being the mainstay of the economy, it was also the main foreign exchange earner for the country. With the right attention, agriculture can easily recapture lost ground.
But instead of giving it the attention it deserves and needs to revive it, if only in order to help in the diversification of the nation’s economy, a short-sighted, sectionalist administration is virtually trying to put an end to it.
Yet Obasanjo’s greatly flawed budgets have always smoothly scaled through as if farmers and the area from which they predominantly come from have no representatives in the National Assembly.
Indeed, the travails of the budgetary process has tended to suggest that there is an urgent need for a complete rethink about the environment and mechanism of the electoral process and the utility of representative politics in the north in particular, because the problem there is more acute.
Today, in the north it is as if politics has become out of bounds to the sane, capable, dignified and the well-bred. It has, to all intents and purposes, been taken over by a coalition of corrupt moneybags, good-for-nothing rabble-rousers and cash-and-carry flotsam and jetsam. With the result that those qualified and able to represent the people cannot come near to winning the so-called elections. And, consequently, most of those who eventually win and go on to represent the north, don’t know the issues, don’t care that they don’t – and are always there on the legislative market for sale. And even if there is no buyer, they probably don’t know what the figures mean.
But let us for once forget about the figures making up Budget 2005, because almost all of them will be disregarded by the executive anyway. However, one still can’t help but note that even while the price of oil on the world market is $54 per barrel, the budget assumes a $27 per barrel price.
Consequently, the budget expects revenue of N1.6 trillion of which 80% that is N1.3 trillion will come from oil. But oil will be selling at twice the assumed price. In other words, there will be a predictable excess of N1.3 trillion. Now, a very good question is: “What does Obasanjo intend to do with it?” Extra-budgetary expenditure, supra-constitutional spending or is it on its way to Switzerland? On the other hand, with a N1.3 trillion excess fund, why is the government resorting to deficit spending?
And finally it will seem Obasanjo has been forced to admit the inappropriateness of his hasty, vindictive and indefensible decision to scrap the Petroleum Trust Fund, PTF. In belated invitation of General Sani Abacha he has on October 11, 2004 inaugurated the Independent Consolidating Committee for cushioning measures under Alhaji Ibrahim Mantu, deputy Senate president, to alleviate the suffering he himself caused to the people through a series of IMF-inspired subsidy removal from the price of petroleum products that raised the pump price of petrol by 25%.
The Mantu Committee has received an allocation of N5 billion. So what exactly is Mantu going to do with that? If Obasanjo has now realised that he has made a mistake in scrapping the PTF the thing to do is not to create an outfit for the boys. What he should do is to create his own PTF and hope that he will at least have a chance to leave his own legacy. Isn’t it a great shame that in five years this government has not made any demonstrable achievement comparable to what even one of PTF’s seven intervention areas achieved with much less money in fewer years?
Perhaps this is something our legislators haven’t realised. But there are many things they don’t seem to realise nowadays. They approve a budget; Obasanjo refuses to spend according to its provisions. They behave as if a law has not been broken. Obasanjo thinks up an idea; and he goes ahead to dish out money to it as if the money is his own. The legislators eagerly wait for Obasanjo to come and direct them to pass the required legislation to make his illegal acts legal. It is as if they know everything except how to impeach.
I will be ashamed of myself if I am a member of an assembly that keeps approving Obasanjo’s budgets, even when clearly my own constituency is ill-served and, in the process, my nation shortchanged. If the truth must be told, members of the National Assembly don disappoint Nigerians finish.
