By Eze Onyekpere
- INTRODUCTION
The State is under a legal obligation to make a budget[1], which is a statement of income and expenditure and an indication of the state’s expenditure priorities for the year. As an economic process, budgets convert state development plans and priorities into a programme of action. The human being has unlimited needs while resources to satisfy them are scarce. The budget offers an opportunity at rationalisation and choice within a scale of preference drawn up and based on some fundamental norms. The utility of each item included in the budget may not necessarily reflect popular opinion and input, hence the budget’s link with politics and power. Budgeting as defined in this paper will include the stages of preparation, appropriation, implementation, monitoring and the audit phase.
1.1 The Budget as an Economic Process
The budget is a plan, a template, which provides the opportunity for evaluation at the end of the budget year. It is framework that links specific spending objectives with their associated costs. Planning is essential for public finance management since refusing to plan is stated to be planning to fail. For fiscal and monetary policy, targets like inflation rate, employment rate, interest rate, gross domestic product, etc, enable the government and citizens measure economic performance over time[2]. As an economic process, the budget and budgeting need to be distinguished. It has been aptly stated that:
Budgeting refers to the whole process of mobilising, allocating, managing and control of national resources. There are three main components of this process. The first is national planning, which sets the macroeconomic and social targets of the nation over a defined period of time. The second aspect relates to the project and sectoral allocations of national resources with a view to satisfying the needs of all the citizens as well as the demands of international stakeholders. The first and second elements determine the nature and scope of fiscal policy, which is the third component of budgeting. Fiscal policy refers to the means of raising the required revenue and other non-revenue funds and the manner in which they should be allocated with a view to meeting national macroeconomic and social targets and goals. That is, fiscal policy refers to all issues relating to the raising of public revenue and allocation of funds for public expenditure.
The budget on the other hand is a document that represents the final outcome of budgeting. It is therefore a finished product that merely describes in quantitative (financial) terms the resources, which an individual organisation intends to spend or commit to various activities within a given fiscal cycle, and the benefits derivable from the outlay[3].
Budgets are instruments of implementing government policy, particularly economic and social policies. These policies impact on the lives of individuals, the growth and performance of public and private sector organizations. Budgets therefore provide a roadmap directing economic planning by subgroups and individuals in the economy.
1.2 The Budget as a Human Rights Process
The budget could also be seen as a human rights process defining the steps to be taken for the respect, protection, promotion and fulfillment of rights. Rights and freedoms most times need budgetary outlays to guarantee that they do not remain dry letters on parchment. Even in the new era of the rolling back of the state where government articulates its role as that of a facilitator that sets the enabling environment for the private sector to do the actual provision of services, resources are still needed to guarantee the enabling environment.
For the three fundamental duties of the state in human rights jurisprudence, the duty to respect many at times may not require the deployment of resources. But the duty to protect individuals and communities from violations by third parties will require some level of policing work that will need the deployment of resources. Laws, standards and policies have to be enacted and enforced. The obligation to fulfill clearly involves the deployment of resources that will be needed for practical actions to satisfy human rights.
1.3 The Budget as a Political Process
The budget can be seen as a tool of political decision making in allocating resources to achieve political ends. The main actors in the budgeting process and the determining authorities are mainly elected politicians who are charged with leadership decisions. Thus, the following quotation is apt;
“… the national budget is a representation in monetary terms of governmental activity. If politics is regarded in part as conflict over which preferences shall prevail in the determination of national policy, then the budget records the outcome of that struggle. If one looks at politics as a process by which the government mobilises resources to meet pressing problems, then the budget is a focus of these efforts[4].
The budget can also be described as:
The statement of the expenditure preferences of the government expressed in monetary terms and subject to the constraints imposed by the environment indicating how the available resources may be utilised to achieve whatever the dominant individuals within the political leadership agree to be government priorities[5].
A budget is the most powerful economic policy instrument of government and as such, a vital transformational tool. It is usually made through a proposal sent in the form of a bill by the executive to the legislature. When passed by the legislature, it is signed into law by the head of the executive arm as an Appropriation Act or Law. As a political process, a budget reflects the prevalent political economy paradigm adopted by the leadership of a state.
- GUIDING LAWS AND OBJECTIVES
A plethora of laws, policies and frameworks guide and regulate the budgeting process. These laws seek to define the spheres of the different actors in the executive and legislature, the timing of certain acts and the power of oversight and responsibility to account for public finance management. The laws and subsidiary legislation include the Constitution, the Finance (Control and Management) Act, the Fiscal Responsibility Act, the Appropriation Acts, Financial Regulations, etc. Treasury circulars made by the Finance Minister or the office of the Accountant General also guide budgeting activities in the executive arm. Essentially, the Constitution entrenches the principle of checks and balances and appoints the legislature the overseer and watchdog of public finances. The powers of the legislature include pre-appropriation control, control of actual expenditure and post appropriation control[6].
The objectives of the legal provisions include the following[7]
- That all revenues are collected and duly accounted for;
- All expenditures are duly authorized and accounted for;
- There is proper application of government funds so that appropriated funds are spent for the purposes they are meant for;
- The funds and properties of government are kept under proper custody and suitable condition; and
- The books, records and accounts of government are properly maintained.
2.1 Establishment of the Consolidated Revenue Fund of the Federation
By S.80 of the Constitution, the Consolidated Revenue Fund of the Federation is established while recognizing the existence of other Funds of the Federation:
(1) All revenues or other moneys raised or received by the Federation (not being revenues or other moneys payable under this Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation.
The Federation Account is created by section 162 (1):
- (1) The Federation shall maintain a special account to be called “the Federation Account” into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.
2.2 Budget Initiation, Timing And The Legal Basis For Legislative Appropriation
The Nigerian financial year runs from January 1 to December 31[8] and single year or annual budgeting is the practice. The Constitution by S. 80 (2), (3) and (4) declares that no funds shall be withdrawn from the Consolidated Revenue Fund except in accordance with a legal procedure to wit; to meet expenses charged on the Fund or through appropriation in accordance with section 81 of the Constitution. Other funds of the Federation also have the same rigours of withdrawal attached to them. Thus, the power of the legislature in matters of appropriation and control of public expenditure is established[9].
By S.80 (2):
No moneys 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 moneys has been authorised by an Appropriation Act, Supplementary Act or an Act passed in pursuance of section 81 of this Constitution[10].
(3) No moneys shall be withdrawn from any public fund of the Federation, other than the Consolidated Revenue Fund of the Federation, unless the issue of those moneys has been authorized by an Act of the National Assembly[11].
(4) No moneys shall be withdrawn from the Consolidated Revenue Fund or any other public of the Federation, except in the manner prescribed by the National Assembly[12].
The President is charged with the initiation of budget proposal by S.81 as follows:
- 81.-(1):
The President shall cause to be prepared and laid before each House of the National Assembly at any time in each financial year estimates of the revenues and expenditure of the Federation for the next following 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 issue from the Consolidated Revenue Fund of the sums necessary to meet that expenditure and the appropriation of those sums for the purpose specified therein.
For a budget to effectively perform its function, it needs inter alia to be timely. In accordance with the 1999 Constitution, the President or Governor shall cause to be prepared and laid before the legislature at any time in each financial year estimates of the revenues and expenditure of government for the next following financial year[13].
Comparatively, the position in the United States of America mandates the President to present the budget on or after the first Monday in January but not later than the first Monday in February of each year[14]. And the fiscal year in the United States starts by October 1.
Under the Nigerian provision, the executive has been laying budget proposals before the legislature very late in the year. At times, this is done in November or December. This leaves the legislature with little or no time to properly do its scrutiny and approval work before the commencement of the next year. For the legislature to effectively review and approve budget proposals, they may need at least four months if they are not already beclouded with a lot of bills awaiting passage. It is proposed that the 1999 Constitution be amended to mandate the executive to lay budget proposals before the legislature in August, at least four months before the end of the financial year. The same amendment should also provide for the legislature to complete the passage of the Appropriation Act before the end of the financial year in December. The proposed amendment is necessitated by the fact that this cannot be achieved by another legislation considering the supremacy of the Constitution clause in S.1 (3) of the Constitution viz, the words “at any time” in the Constitution will take precedence to any stipulated time in any other legislation.
- PRE BUDGET STATUTORY DEMANDS: THE COLLABORATIVE SPIRIT OF THE FISCAL RESPONSIBILITY ACT
Before 2007, pre-budget matters which ideally should form part of budget preparation procedure were not covered by law. They were guided by policy and practice. However, the Fiscal Responsibility Act (FRA) has come to fill the vacuum. By S. 12 of the FRA, the following provision is made:
(1) The Federal Government after consultation with the States shall-
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not later than six months from the commencement of this Act, cause to be prepared and laid before the National Assembly, for their consideration a Medium-Term Expenditure Framework for the next three financial years; and
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thereafter, not later than four months before the commencement of the next financial year, cause to be prepared a Medium-Term Expenditure Framework for the next three financial years.
- The framework so laid shall be considered for approval with such modifications if any, as the National Assembly finds appropriate by a resolution of each House of the National Assembly.
By S.19 of the same FRA:
Notwithstanding anything to the contrary contained in this Act or any other law, the Medium-term Expenditure Framework shall-
(1) be the basis for the preparation of the estimates of revenue and expenditure required to be prepared and laid before the National Assembly under section 81 (1) of the Constitution.
(2) The sectoral and compositional distribution of the estimates of expenditure referred to in subsection (1) of this section shall be consistent with the medium-term developmental priorities set out in the Medium-Term Expenditure Framework.
Thus, the FRA provides for the preparation of the MTEF by the executive and its approval by the legislature. The MTEF is proclaimed to be the basis for preparation of the estimates which the President is constitutionally bound to lay before NASS. The FRA therefore anticipates collaboration between these two rams of government. By S.12 of the FRA, the MTEF has the following composition:
(6) The Medium-Term Expenditure Framework shall contain-
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a Macro-economic Framework setting out the macro-economic projections, for the next three financial years, the underlying assumptions for those projections and an evaluation and analysis of the macroeconomic projections for the preceding three financial years;
- a Fiscal Strategy Paper setting out-
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the Federal Government’s medium-term financial objectives,
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the policies of the Federal Government for the medium-term relating to taxation, recurrent (non-debt) expenditure, debt expenditure, capital expenditure, borrowing and other liabilities, lending and investment,
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the strategic, economic, social and developmental priorities of the Federal Government for the next three financial years,
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an explanation of how the financial objectives, strategic, economic, social and developmental priorities and fiscal measures set out pursuant to sub-paragraphs (i), (ii) and (iii) of this paragraph relate to the economic objectives set out in section 16 of the Constitution;
- an expenditure and revenue framework setting out-
- estimates of aggregate revenues for the Federation for each financial year in the next three financial years, based on the predetermined Commodity Reference Price adopted and tax revenue projections;
- estimates of aggregate revenues for the Federation for each financial year in the next three financial years, based on the predetermined Commodity Reference Price adopted and tax revenue projections;
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aggregate expenditure projection for the Federation for each financial year in the next three financial years,
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aggregate tax expenditure floor for the Federation for each financial year in the next three financial years, and
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minimum capital expenditure floor for the Federation for each financial year in the next three years;
Provided that, the estimates and expenditures provided under paragraph (c) of this subsection shall be-
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based on reliable and consistent data certified in accordance with section 13(2) (b) of this Act,
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targeted at achieving the macro-economic projection set out in subsection (2) (a) of this section,
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consistent with and derive from the underlying assumptions contained in the macro-economic framework, the objectives, policies, strategic priorities and explanations in the Fiscal Strategy paper;
(d) a Consolidated Debt Statement setting out and describing the fiscal significance of the debt liability of the Federal Government and measures to reduce any such liability; and
(e) statement describing the nature and fiscal significance of contingent liabilities and quasi-fiscal activities and measures to offset the crystallization of such liabilities.
Under extant public finance management jurisprudence, the MTEF is undergirded by a Medium Term Sector Strategies (MTSS) of the various Ministries, Departments and Agencies of Government. For MTSS which undergirds the MTEF, their objectives are to:
- Articulate medium-term (three years) goals and objectives against the background of the overall goals of the high level sectoral policies, the attainment of the Sustainable Development Goals, etc;
- Identify and document the key initiatives (that is, projects and programmes) that will be embarked upon to achieve the goals and objectives;
- Cost the identified key initiatives in a clear and transparent manner;
- Phase implementation of the identified initiatives over the medium-term;
- Define the expected outcomes of the identified initiatives in clear measurable terms; and
- Link expected outcomes to their objectives and goals.
To buttress the spirit of collaboration between the arms of government and its expansion to include other stakeholders, the MTSS is to be prepared by a sectoral team including officials of the MDA, representatives of the committee with oversight over the MDA in NASS, organised labour, private sector, civil society and professionals relevant to the sector.
- IN THE BEGINNING: EXECUTIVE PRACTICES
Ideally, the practice is for a Call Circular to request budget proposals from MDAs according to the stated guidelines and general objectives of the government found in the MTSS and MTEF. The Call Circular is usually accompanied by specimen forms to be completed and by a time- table for budget discussions indicating the dates allocated for MDAs. The Call Circular outlines the operative economic policy of the Federal Government including its guiding principles, objectives, instruments, targets and macro economic policies. The Call Circular also furnishes the MDAs with guidelines for preparation of the budget and emphasizes the likely ceilings to the respective overall expenditure. The Revenue Projections that would inform the expenditure estimates are also included to enable the MDAs to make returns on revenues collectable by them in the form of fees, charges, levies, etc. The Call Circular also elicits information relating to recurrent and capital expenditure projections.
When the proposals from the various ministries and agencies have been received, they are collated and distributed among the schedule officers in Budget Office for analysis and summary presentation. Thereafter the Budget Office invites the ministries and agencies to defend their proposals. The proposals are adjusted and readjusted until they become acceptable. The proposals are aggregated and passed on to the Minister of Finance (now Minister of Budget and National Planning) who will arrange a meeting with the other Ministers. Thereafter the Minister of Finance briefs the President, before the budget is presented to the Federal Executive Council. It is after the adoption by the Federal Executive Council that the budget is presented to the National Assembly by the President.
Budget initiation and formulation is the foundation of effective budgeting. It is at that point that all programmes, projects and activities going into the budget should be presented. Since the Constitution and other laws did not make any definite provision for these issues, there has been a turf war between the executive and the legislature leading to virtual stalemates every year[15]. The Philips Committee recommended a process for budget initiation and formulation in view of the perennial executive legislative feud[16].
- Determination by the National Assembly, on the recommendation of the President, based on the advice of the National Economic Council of the permissible aggregate government expenditure and of the core revenue.
- Determination by the President of sectoral percentage allocations based on Federal Government priority scale and ratified by the National Assembly[17].
- Budget Office of the Federation to aggregate all current liabilities and existing financial commitments which stretch beyond the current fiscal year and make full provisions for next years commitments in the next budget.
- Budget Office of the Federation to estimate overall Federal Government retained revenue for the coming fiscal year.
- Budget Office of the Federation to issue Call Circulars based on steps 1 to 4.
- Submission of budget proposals by ministries/agencies.
- Budget Office to analyse budget proposals from ministries/agencies.
- Budget Office to hold inter-Ministerial meetings on budget proposals from ministries/agencies
- Meeting of inter-Branch Budget Committee for harmonization of the budgets of the legislature, executive and the judiciary. Meeting of National Economic Council to harmonize the budgets of the three tiers of government Federal, State, Local.
- Budget Office to collate the recommended budget and submit same to the President.
- President and Federal Executive Council to consider and adopt the recommended budget.
- President to lay the adopted budget before the National Assembly
The year 2000 recommendations of the Committee have been overtaken by the FRA. However, the suggestion by the Committee is that of collaboration between the executive and the legislature.
By S.20 of the FRA, the Annual Appropriation Bill to the NASS from the President is to be accompanied by the following.
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a copy of the underlying revenue and expenditure profile for the next two years;
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a report setting out actual and budgeted revenue and expenditure and detailed analysis of the performance of the budget for the 18 months up to June of the preceding financial year;
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a revenue framework broken down into monthly collection targets prepared on the basis of the predetermined Reference Commodity Price as contained in Medium-Term Expenditure Framework.
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measures on cost, cost control and evaluation of results of programmes financed with budgetary resources;
- a Fiscal Target Appendix derived from the underlying Medium-Term Expenditure Framework setting out the following targets for that financial year-
- target inflation rate,
- target fiscal account balances,
- any other development target deemed appropriate; and
- a Fiscal Risk Appendix evaluating the fiscal and other related risks to the annual budget and specifying measures to be taken to offset the occurrence of such risks.
It is submitted that the purpose of submitting these documents along with the estimates is to enable the legislature properly scrutinise the proposed expenditure before approval and may be, do the necessary additions and subtractions. Again, by S.13, the FRA sets the Aggregate Expenditure Ceiling for a financial year as follows:
(1) aggregate expenditure and the aggregate amount appropriated by the National Assembly for each financial year shall not be more than the estimated aggregate revenue plus a deficit, not exceeding three percent of the estimated Gross Domestic Product or any sustainable percentage as may be determined by the National Assembly for each financial year.
(2) aggregate expenditure for a financial year may exceed the ceiling imposed by the provisions of subsection (1) of this section, if in the opinion of the President there is a clear and present threat to national security or sovereignty of the Federal Republic of Nigeria.
4.1 Approval of Revenue Profile
The Constitution apart from mandating the President to cause to be prepared estimates of expenditure of the Federation for the next following financial year also mandates him to prepare and lay before the legislature estimates of the revenue. However, it appears that public and legislative attention is more focused on expenditure than on revenue. However, there is the need for a proper alignment of expenditure to revenue to ensure that the appropriation does not become an exercise in shadow chasing.
4.2 Procurement of Debts and Debt Limitation
Part of the MTEF is the Consolidated Debt Statement which should be governed by the Limits of Consolidated Debt as set out in S.43 of the FRA.
The President shall, within 90 days from the commencement of this Act and with advice from Minister of Finance subject to approval of National Assembly, set overall limits for the amounts of consolidated debt of the Federal, State and Local Governments pursuant to the provisions of items 7 and 50 of Part I of the Second Schedule to the Constitution and the limits and conditions approved by the National Assembly, shall be consistent with the rules set in this Act and with the fiscal policy objectives in the Medium-Term Fiscal Framework.
This provision again reiterates the intention of the legislature for strong collaboration between the executive and the legislature in the budgeting process. Again S.42 of the FRA provides that:
42 (1) The framework for debt management during the financial year shall be based on the following rules-
(a) Government at all tiers shall only borrow for capital expenditure and human development, provided that such borrowing shall be on concessional terms with low interest rate and with a reasonably long amortization period subject to the approval of the appropriate legislative body where necessary; and
(b) Government shall ensure that the level of public debt as a proportion of national income is held at a sustainable level as prescribed by the National Assembly from time to time on the advice of the Minister.
These provisions also show that the spirit of collaboration between the executive and legislature should dominate engagements in the budgeting process.
5. THE LIMITS OF LEGISLATIVE POWER IN APPROPRIATIONS
Clearly, S.81 (1) reserves the power of budget preparation to the executive. But such power left entirely with the executive arm of government has led to unnecessary friction between the executive and legislative arms of government since the advent of civil rule in 1999. This may have informed the collaborative spirit guaranteed in the FRA. The legislature has always altered (most times an increase) the executive proposals and the President always refuses to assent to the bills on the grounds that they are substantially different from the proposals sent. In some years, there has been a legislative override of the President’s veto leading to the President reluctantly implementing the budget or leaving many aspects of it unimplemented.
Beyond budget initiation and preparation reserved by the Constitution to the executive, what is the role of legislature in the budget approval process? The legislature’s role is usually determined by law, political culture and tradition, adequacy of time to consider and make inputs into the budget, access to information and other resources, public opinion, etc. However, the law is the most influential and important of all these considerations. Examples from other jurisdictions are instructive for us to review our laws and arrive at a nuanced conclusion [18].
The Namibian Constitution in article 126, section 7 requires that the finance minister submit the annual budget to the legislature, which, in turn is mandated to “consider such estimates and pass pursuant thereto such Appropriation Acts as are in its opinion necessary to meet the financial requirements of the state from time to time”[19].
The Malawi Constitution effectively prohibits the legislature from considering any bill or amendment for the imposition of any charge upon the Consolidated Revenue Fund or any alteration of such charge unless the recommendation comes from the government. This effectively prohibits amendments to the finance minister’s budget[20].
The Constitution of Ghana prohibits the imposition of a charge on the Consolidate Fund of Ghana or the alteration of any such charge otherwise than by reduction.
The 1996 South African constitution empowers the legislature to offer amendments to the executive’s budget but the legislature must provide the procedure to exercise this power under a framework law.
The Polish House of Representatives under the 1997 Constitution has broad powers to increase or decrease spending and revenues in the executive’s budget. The only limitation is that the changes may not increase the budget deficit or decrease the surplus proposed by the executive. The amendments must contain a corresponding increase in revenues.
In Sweden, the Spring Budget Bill presented on April 15 contains the government’s proposal for aggregate overall spending and revenues for the coming year and the following two years. The legislature has powers to amend this bill without restriction but once passed, the aggregate numbers become legally binding and the actual budget estimate to be presented on September 20 to the legislature shall not exceed the aggregate approved.
South Korea’s legislature can reduce spending but must seek the executive’s approval to increase the budget.
Inter-Parliamentary Union members’ rights in budgetary matters indicate that out of a total of 82 surveyed countries, 32 may increase and reduce expenditure and revenue; 17 may reduce but not increase expenditure; 4 may reduce expenditure but only increase it with permission of the executive; 13 may increase or reduce expenditure if alternative provisions are made elsewhere; for 15 countries, the rights were not specified in detail and 1 was classified in the not applicable category[21].
The United States of America experience leans towards a strong legislative role and a professional budget office. The contour of the practice is as follows:
The United States Congress crafts a large part of the nation’s budget itself. In the U.S, legislative-executive branch tensions are purposely embedded in the process. Committees play a major role in the budget process and amendments offered by individual members, both majority and opposition, are commonly offered and adopted by subcommittees and committees, and in the plenary.
Each February, the President submits his budget proposals. Congress takes no formal action on it, treating it as advisory. Instead, Congress engages in an eight-month process of preparing its own budget framework and then painstakingly considers the minutiae of spending for each government department and agency. Unlike other parliamentary systems, in the U.S the second chamber, the Senate plays a co-equal role in determining spending levels.
House and Senate committees, with advice from the sectoral committees, agree to a binding spending cap, which is approved by both chambers and does not require the President’s approval. This overall spending cap is referred to the appropriate committees, which divide it among subject matter subcommittees[22].
There have been arguments about the powers of the legislature in respect of the Appropriation bill laid before it. The Constitution however appears a bit silent on the subject despite the fact that it requires legislative approval for the withdrawal of monies from the Consolidated Revenue Fund and the expenditure of public resources. A school of thought holds that the legislature can reduce but not increase the total amount of the budget because an increase partakes of the nature of initiation as regards the excess amount over and above the total figures in the appropriation bill[23]. But this school of thought has not provided answers to situations where the executive miss out appropriating basic expenditures such as personnel to an MDA or under-estimating them. Even if the executive omitted or under-estimated this in error; should the legislature not correct same? Should it merely rubber stamp? This scenario has come up several times since 1999.
Another school of thought holds the view that the legislature is at liberty to amend, meaning increasing or reducing the executive’s budget proposals. Since what is laid before the legislature is a proposal in form of a bill, it is still subject to express and inherent legislative powers and these powers do not in any way imply the passage of a bill exactly in the form presented. Also, the legislature is not expected to be a mere rubber stamp for the requests of the executive. It is in a position to scrutinise, make inputs, make reasonable additions and subtractions from the head by head expenditures. But should this school of thought provide justification for additions and new projects that have no links with policy priorities? Obviously, the answer is in the negative.
A learned commentator has drawn attention to three issues the legislature cannot undertake while passing a budget:
- Make an outright deletion of some heads of expenditure in the budget;
- Make a wholesale transfer of the votes meant for one ministry or department to another, thereby indirectly abolishing the former;
- Introduce brand new expenditure heads or subheads into the budget;
- Transfer an executive agency designated in the budget from one department to another[24].
However, it needs to be stated that there are no decided cases from the Court of Appeal or Supreme Court on this matter but the above are extrapolations from learned opinion based on what is considered the prevalent practice in other similar jurisdictions. There is nothing however of the face of the constitutional provisions either approving or disapproving of these learned opinions. But a more realistic and harmonious position is for the executive to collaborate with the legislature during the budget initiation phase so as to reduce the areas of friction between the two arms of government. It has also been recommended that an Inter-Branch Budget Committee involving the three arms of government would be a far more acceptable arrangement for the harmonisation of separately initiated appropriation proposals than leaving it to one branch of government to do the harmonisation alone[25].
- OTHER OUTSTANDINGS
Executive budget implementation reports are to be submitted to the NASS under the FRA and NASS wil use the reports to further its oversight on the allocation and management of public expenditure. Also, audit reports of the Auditor-General of the Federation and the States go before their respective legislative Public Accounts Committees for consideration and resolution of outstanding issues.
- CONCLUSIONS
The 1999 Constitution as supplemented by the provisions of the FRA expects a process of evidence led budgeting where the executive and legislature collaborate on the basis of evidence to craft a budget which responds to the rights and needs of Nigerians. It admits of no arbitrary action and assumptions. If legislators have projects (whether constituency projects or otherwise), they are expected to submit same to the executive at the stage of the MTSS and call circulars and ensure that they are fed into the budget as part of the sectoral priorities and where the nominated projects are not in conformity with sectoral goals, they should be withdrawn and new ones selected to conform with policy priorities.
Constituency projects are not new in constitutional democracies. The American system admits of constituency projects. But it’s the abuse or mismanagement of the projects that raise alarms. The appropriation process can not be the justification of inserting new projects and programmes that have not undergone the necessary preparation phases into the annual budget. Some projects require technical drawings, permits and studies before they can be ready to go into the budget. Inserting such projects into the budget at the late appropriation hour will not facilitate budget implementation. Also, inserting frivolous projects that have no relationship with official policies or the needs of the people is not the right way to go. What is required is transparency and honesty of purpose by all the stakeholders in the executive and legislature for Nigeria’s budgeting process to respond to the needs of Nigerians.
The implementation phase is clearly the domain of the executive as no controversy currently exists on that. Monitoring is jointly done by the executive and legislature. But if the executive legislative feuds on appropriation continue unabated, the Supreme Court should be given the opportunity to clarify the position of the law on the subject matter.
Eze Onyekpere is Lead Director, Centre for Social Justice (CENSOJ), Abuja, Nigeria. He gave this speech at the formal unveiling of Orderpaper.ng, (26th September, 2016, Ladi Kwali Hall, Sheraton Hotel, FCT, Abuja, Nigeria).
[1]. See sections 80 and 81 of the Constitution of the Federal Republic of Nigeria 1999 requiring authorisation of public expenditure by the legislature.
[2] Eddy Omolehinwa in Government Budgeting in Nigeria, Pumark Nigeria Limited, Educational Publishers at p.13.
[3] Ademola Ariyo in Strategies for Civil Society Participation in National Budgeting, paper presented at a Capacity Building Workshop organised by Socio Economic Rights Initiative, 2000.
[4]. Aaron Wildavsky cited at page 19 of a Rights Based Approach Towards Budget Analysis, IHRIP, 1999.
[5] Eddy Omolehinwa in Government Budgeting in Nigeria, Pumark Nigeria Limited, Educational Publishers at p.11.
[6] Justice C.C Nwaeze in “The Legal Regulation of Budgeting”, Journal of Economic, Social and Cultural Rights, Vol1. No.4 at page 4.
[7] Ajayi (1983) cited with approval by Eddy Omolehinwa in Government Budgeting in Nigeria, supra.
[8] See the Financial Year Act. Cap.C23, Laws of the Federation of Nigeria, 2004.
[9] Further justification for the legislative powers of appropriation can be found in S.4 of the Constitution which vests legislative powers on the National Assembly to make laws for the peace, order and good government of the Federation.
[10] Compare with the position in the United States of America where the Constitution by Article 1, Section 9, clause 7 states “ no money shall be drawn from the Treasury, but in consequence of Appropriations made by Law, and a regular statement and account of receipts and expenditures of all public moneys shall be published from time to time”. The second part of this provision introduces the element of accountability and transparency, which is lacking in Nigeria’s constitutional provisions.
[11] Ibid.
[12] Ibid.
[13] S. 81 and 121 of the 1999 Constitution for the federal and state levels respectively.
[14] Office of Management and Budget Circular No. A -11 2000 P.7.
[15] See the Limits of Legislative Power in Appropriations in the next section.
[16] Strengthening the Federal Budget System in Year 200 and Beyond: Report of the Budget System Review Committee, (Main Report) March 2000, hereinafter called the Phillips Committee Report.
[17] The Phillips Committee recommended that the prior determination of sectoral percentages should be based on best of judgement of top political decision makers, trends over the past several years, international norms specified by relevant international organisations such as UNESCO, WHO and FAO, levels attained in countries which Nigeria may regard as models for particular sector developments.
[18] These examples are taken from Legislatures and the Budget Process; An International Survey (2003), prepared by the National Democratic Institute for International Affairs with funding from the National Endowment for Democracy.
[19] Despite this strong legal background, the Namibian legislature has made little or no interventions to the budget approval process.
[20] Section 57 of the 1995 Constitution of Malawi.
[21] Inter-Parliamentary Union, Comparative Reference Compendium, Volume 2, Chart 38A (1986).
[22] See page 30 of the Legislatures and the Budget Process; An International Survey (2003), prepared by the National Democratic Institute for International Affairs with funding from the National Endowment for Democracy.
[23] B.O. Nwabueze in The President, National Assembly and Right to Initiate Budget, in the Guardian Newspaper of Monday May 22 200. See also MG Yakubu in The Legislature as the Watchdog of Public Funds in I.A Umezulike, (Ed) Towards the Stability of the Third Republic pp 70-71.
[24] Justice CC Nwaeze citing with approval B.O Nwabueze, op cit.
[25] Report of the Budget System Review Committee, page 40.
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