2021 appropriation: When paddings, omissions, walkouts trail budget defence

Heads of Ministries, Departments and Agencies (MDAs) have appeared before various committees of the National Assembly to present their 2020 budget performance and defend the 2021 estimates but ended up having serious disagreements with the lawmakers over some ‘bogus’ provisions, omissions and lopsided distributions. President Muhammadu Buhari had, on October 8, 2020, presented the N13.08trillion […]

Heads of Ministries, Departments and Agencies (MDAs) have appeared before various committees of the National Assembly to present their 2020 budget performance and defend the 2021 estimates but ended up having serious disagreements with the lawmakers over some ‘bogus’ provisions, omissions and lopsided distributions.

President Muhammadu Buhari had, on October 8, 2020, presented the N13.08trillion budget proposal to the joint session of the National Assembly, which vowed to pass the appropriation bill before the year ends to keep the January to December cycle.

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After the president’s presentation, the federal lawmakers set the ball rolling, and quickly, the 2021 appropriation bill scaled first and second readings in both chambers and was referred to relevant committees for further legislative work.

But in the past weeks, the budget sessions had witnessed shocking revelations, ranging from zero allocation to critical projects, uneven project distribution, poor releases, non-execution of contracts, omissions, insertions, and in some few cases, undervalued contracts.

Some agencies also failed to properly articulate their proposals, as many chief executives, accounts, finance or administrative officers fumbled in explaining the items contained in their budgets.

But officials of some agencies alleged that the legislators were only trying to “blackmail” them, observers said the legislature and the executive must put personal interest aside and work towards redirecting the yearly rituals of budget presentation and make it a workable document that will benefit Nigerians.

Below are the twists and turns that characterised the ongoing budget defence sessions.

Row over N15bn for East-West road

Members of the House of Representatives, on November 10, slammed Godswill Akpabio, the Minister of Niger Delta Affairs for allocating N15billion to construct the already operational East-West road. This is part of the N19bn for the ministry’s capital expenditure in 2021.

Members of the House Committee on Niger Delta Affairs said it was unfair to allocate such a huge sum to one project, out of the over 300 projects in the region.

The chairman of the committee, Essien Ayi, said one project couldn’t gulp N15bn out of N19bn capital allocation. “And we will not do it,’’ he added.

But Akpabio told the lawmakers that he wanted to deliver a road that would last for many years.

“You may not like my state, but look at my records. The roads I did 13 years ago in my state don’t have potholes. So I have the hope that I would deliver the same in the Niger Delta,’’ he said.

Lawmaker walks out as colleagues ‘harass’ humanitarian minister

Also, there was a dramatic moment in the House when a member, Fatuhu Mohammed (APC, Katsina), tackled his colleagues for “harassing’’ the Minister of Humanitarian Affairs, Sadiya Farouk when she was being grilled on the distribution of palliatives during the COVID-19 lockdown.

The minister had, during her presentation, said about N321.4million or 58.29 per cent of the total allocation to COVID-19 intervention was utilised.

She insisted that COVID-19 palliatives were delivered to all the 36 state governments, including the Federal Capital Territory (FCT), except Rivers State that rejected its share.

Mohammed openly accused his colleagues of “harassment,’’ saying it was clear that the minister had done well, especially in the distribution of the palliative which she was earlier accused of hoarding.

He said the allegation was proven wrong by the recent looting of palliatives across the country during the #EndSARS protest.

Other members of the committee dismissed Mohammed’s allegation when they chorused “No! Nobody is harassing her here.” The lawmakers said they were doing their job by scrutinising her submissions and demanding explanations on some grey areas.

The chairman of the committee, Mohammed Jega (APC, Kebbi), said it was the responsibility of the lawmakers to know the details of how the 2020 budget was implemented.

A visibly angry Mohammed walked out of the venue while the minister watched as the drama played out.

N11bn ‘inserted’ in FERMA’s budget

Another issue that raised dust was the alleged insertion of N11bn in the budget of the Federal Roads Maintenance Agency (FERMA) and how Imo State got the lion share of the projects slated for execution.

A member of the House, Yusuf Gagdi, said, “I won’t even call it padding because they have increased the money beyond the envelope of their ministry. But my argument is this: Why would you increase about N11bn to one state?”

However, FERMA’s Director-General, Nurudeen Rafindadi, said the budget of his agency was increased without his knowledge, naming the ministries of work and finance for the inflation.

But the chairman of the committee, Femi Bamisile, said after studying the agency’s document for 72 hours, that everybody including those who raised the alarm, “was convinced that all was well with the budget.”

He assured that the projects slated to be executed with the N11bn vote would be evenly distributed to all the six geopolitical zones.

‘N4.6bn small for N13trn expenditure audit’

In another session, the chairman, Senate Committee on Public Accounts, Senator Mathew Urhoghide, accused the executive of deliberately underfunding the Office of the Auditor-General of the Federation.

He wondered why an agency meant to fight institutional corruption would be underfunded while other agencies like the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC) were being properly funded.

“The proposed budget of N4.6bn for the office in 2021 may not be adequate to audit the N13trn in 2021, being the total budget proposal of the Federal Government of Nigeria,” he said.

The Director-General of the Budget Office, Ben Akabueze, said his office would only appropriate funds to the Office of the Auditor-General of the Federation based on extant laws.

He also confirmed to the Senate committee that about 428 Federal Government agencies would not be able to pay salaries by the end of November due to low funds. He also said the 2019 budget had already been prepared before the federal government announced the new minimum wage regime.

To cushion this, he said funds from the Service Wide Vote could be used to cater to the shortfall in the civil servants’ salaries for November.

No real-time monitoring of TSA revenues

The Accountant-General of the Federation, Ahmed Idris, during one of the sessions, shocked the lawmakers when he said his office “ha no real-time” knowledge of revenues remitted through the Treasury Single Account (TSA).

“We don’t have any,” he said while reacting to a question on whether there is a digital monitoring tool for the revenues. This reply stunned members of the Senate Committee on Finance.

He said his office, instead, directly deducted 25 per cent of revenue from accounts of about 60 agencies every month, citing under-remittance as the reason.

The committee chairman, Olamilekan Adeola, described this act as illegal and stressed the need to amend the existing laws to give legal backing to the deduction.

Hope dims for Mambilla hydropower project

Members of the Senate Committee on Power were stunned when they discovered that the much-trumpeted 3,050 megawatts (MW) Mambilla hydropower project got zero allocation in the 2021 budget proposal.

The N5.3trn power plant in Taraba State had been planned for over three decades. In 2017, the federal government approved the construction of the project to a Chinese firm.

China’s Export-Import Bank will provide 85 per cent of the funding and the Nigerian government will supply the remaining 15 per cent for the joint venture.

But the senators queried the Minister of Power, Sale Mamman, who is from Taraba State, on why federal government’s counterpart funding is conspicuously missing in the 2021 budget proposal.

The senators also expressed shock to learn that the capacity of the project had been reduced from 3,050 megawatts to just 1,500 while the cost of the contract was not reduced.

Senator Shuaibu Lau (PDP, Taraba) said his assessment of the site indicated that the project may not see the light of the day because there was no commitment on the part of the Federal Government.

However, the minister said it would be unfair to say the project had been abandoned, noting that N200m is available for building the road to the project site, site clearing and ground-breaking to pave way for investors to take the project. The Chinese EXIM Bank is to provide 85 per cent of the N5.3trn funding.

In the 2021 budget, there is N75m for consultancy services for enumeration and valuation of communities and persons; another N75m detailed engineering design, project management and supervision of the project.

Again, N150m is for advisory and consultancy services for the project and the 40MW Kashimbilla hydropower evacuation project in the state.

Reacting to reports that there was no budget for the Mambilla project, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, in a statement, clarified that the Mambilla power project was not removed from the budget of the Ministry of Power, rather, it was not prioritised by the ministry when it submitted its 2021 budget.

She explained that ministries were given a budget envelop within which to prepare their budgets and only priority projects are adopted.

“Every ministry has an envelope, and they are supposed to prioritise their budget based on their allocation. The ministry does not decide for ministries what their priorities should be,” the minister said.

20 power projects in minister’s LGA

The Senate Committee on Power discovered another discrepancy in the 2021 budget proposal submitted by the Rural Electrification Agency (REA).

The panel said it identified 20 rural electrification projects worth between N20m to N52m proposed to be cited in Lau Local Government Area of Taraba State.

Lau is the local government of the current Minister of Power, Mamman Saleh.

Senator Yusuf Yusuf, a member of the panel, also from Taraba said, “It is not just the N52m if you look at it (the budget), N30m, N20m, N40m and they are all concentrated in one local government area. That is the minister’s local government. Twenty projects are in that local government area. I am not challenging him, but I am sure.”

Few others also said the projects listed in their states were non-existent as they were neither aware of them nor the contractors handling the jobs.

Senator Bala Ibn Na’Allah further accused the minister of violating his oath of office if he approved the citing of the projects in his local government area.

The chairman of the committee, Senator Gabriel Suswam, told the managing director of the REA, Ahmad Salihijo to correct the anomalies discovered in project identification, location and even distribution before reappearing.

N2bn for NERC office

Still in the power sector, the Nigerian Electricity Regulatory Commission (NERC) was reported to not completely account for the fund for the renovation of its seven-storey headquarters in Abuja.

The Chairman of the NERC, Prof. James Momoh, appeared before the House of Representatives Committee on Power despite making another request of N2bn to partition and furnishes the building.

The chairman of the committee, Magaji Da’u Aliyu and other members queried this, as well as the non-release of proceeds for the REA.

“Who permitted you? So you don’t need N2bn if you don’t have a contract sum,” Aliyu said on the partitioning.

Their proposals and line items were rejected by the House Committee on Power as they were asked to go back and tidy up.

However, in a statement, the NERC denied that it awarded a N2bn contract to any firm or withheld payment to the REA, saying it had paid it fully for 2019, except for surpluses.

On the contract award, it said, “The commission further clarifies that no contract in the sum of N2bn has been awarded to any person or company to renovate or furnish the head office complex in Abuja.

The only capital project included in the 2021 budgetary appropriation is a request for the provision of N294m for partitioning and furnishing the head office in Abuja.”

TCN’s 17 new projects rejected

Similarly, the proposal of the Transmission Company of Nigeria (TCN) to do 17 new projects was not accepted by the House Committee on Power.

The members decried the meagre N4bn funding envelop for the company in 2021, even when the company said it needed over N160bn to execute about 100 projects littered across the country.

The management of the TCN, led by the acting Managing Director and Chief Executive Officer, Sule Ahmed Abdulaziz, an engineer, told the committee that about 39 projects had been delivered while others were in advanced stages of completion.

He assured that the new projects were critical ones that would be completely on top priority level to improve strategic power supply level on the national grid.

N19m spent on foreign trips during lockdown

The Senate Committee on Information also quizzed Lai Mohammed, the Minister of Information and Culture, over N19m his staff expended on an international trip in 2020 when travel restriction was in place.

A member of the panel,  Francis Onyewuchi (PDP, Imo), had wondered how the amount was spent during the COVID-19 lockdown and demanded an explanation.

But the minister said the money was spent on international travels between January and March before the lockdown.

The panel asked the ministry to furnish it with details of its local and international travels in the 2020 budget.

Unknown projects inserted for health ministry

A prominent case in the House of Representatives was an insertion in the ministry of health’s budget, in which the minister, Dr Osagie Ehanire, denied knowledge of six projects.

This prompted the House of Representatives joint committees on Health Institutions and Health Services to summon the Director-General, Budget Office to explain the insertion.

The panel also halted payment to a contractor, who, it discovered, had deserted the site but claimed to have completed the project.

Similarly, the Director-General, Nigeria Centre for Disease Control (NCDC), Dr Chikwe Ihekweazu, lamented the non-inclusion of 2.5per cent Emergency Health Fund in their 2021 budget.

 Non-release of fund for zonal projects in SDGs

Members of the House of Representatives also discovered that funds proposed in the 2019 budget for the execution of Zonal Intervention Projects (ZIPs) were not released to the Sustainable Development Goals (SDGs) office.

They made the discovery when the Senior Special Assistant (SSA) to President Buhari on SDGs, Adejoke Orelope-Adefulire appeared before the House Committee on SDGs.

They claimed that funds were released for other projects in the budget, but none was released for the ZIPs.

Anger over N1m for IPAN office building

Another controversial scene played out when the Director-General of the Institute of Public Analysts of Nigeria (IPAN), an agency under the Ministry of Health, Aliyu Angara, presented a budgetary proposal of a little over N1m for the construction of its headquarters in Abuja.

His presentation angered members of the panel, whose chairman, Rep Tanko Sununu, said the institute had only succeeded in ridiculing Nigeria as a country.

“It is an act meant to ridicule Nigeria as a country. The international community is watching every move Nigeria makes,” he said. The agency was turned back by the lawmakers.

No details of foreign missions’ bailouts

Consideration of the Ministry of Foreign Affairs 2021 budget was abruptly suspended by the House Committee on Foreign Affairs over some missing details of the disbursement of funds meant to offset rent arrears of Nigeria’s foreign missions and welfare of staff provided as a bailout.

The committee asked the ministry’s director of finance and administration, which appeared alongside the minister, Geoffrey Onyeama, to provide the said details, warning that failure to provide the financial details may cause a delay in the passage of the ministry’s 2021 budget.

The chairman of the committee, Yusuf Buba Yakub, who referred to the bailout in his opening speech, insisted that the details must be provided by the ministry before its 2021 budget would be considered.

Nigeria’s N38.6trn debt profile

Amidst the growing concerns over Nigeria’s rising debt profile, the federal government announced that the county’s public debt stock was projected to rise to N38.68trn by December 31, 2021.

The projection is based on existing approvals, said Finance Minister Zainab Ahmed when she appeared before the Senate Committee on Local and Foreign Debts last Tuesday.

The minister said the total debts, comprising domestic and foreign borrowings of the federal and state governments and the FCT, stood at N31.01trn as at June 30, 2020.

The N13.08trn 2021 budget proposal has a total aggregate revenue projection of N7.88trn, with a deficit of N5.20trn, which represents 3.64per cent of estimated Gross Domestic Product (GDP). The government planned to borrow N4.28trn from domestic and foreign sources to finance the 2021 budget deficit.

2021 budget threatened

While the federal lawmakers were busy scrutinising the fiscal document, Minister Zainab Ahmed said the 2021 budget estimate was threatened by the second wave of COVID-19 in Europe, which has caused the oil price to slump to 37 dollars per barrel as at last Thursday.

The “safer path” the federal government took to benchmark the crude oil price did not insulate the budget from the shocks of the price slump.

“We took a safer path. It seems the second wave of COVID-19 in Europe is affecting us. We are hoping to have clarity as to which direction to take in the next week or two,” the minister told members of the Senate Committee on Finance on Thursday.

We are worried

A public affairs analyst, Mohammed Sabo, said those shouldered with the responsibility of leading the country are taking Nigerians for a ride.

“It is sad watching the budget presentation because while some ministers or chief executive of agencies took time to favour their side of the country, the legislators were busy intimidating those on the executive side.

“Again, there is mutual suspicion among them even when some of the budget provisions did not violate any known law,” he said.

Barrister Sam Joe, a legal practitioner, said the issue of making budget presentation a yearly ritual must be stopped.

“What we see at the end of each financial year is terrible budget performance despite all the noise,” he said.

“It is very difficult to see our budget perform above 60 per cent and this is unfortunate.   In the United States, for instance, their budget performance is always more than 90 per cent; they see budget as sacred and we should emulate them,” he said.

Nigerians are waiting for the clear direction on the oil benchmark as promised by the minister.

Although the budget is yet to be passed, it remains to be seen if it would be passed before the year ends and if its expectations would be met.