Fresh facts have emerged as to why President Goodluck Jonathan aborted the planned presentation of the 2014 Budget to the joint sitting of the national assembly.
Very reliable sources told our correspondent in Abuja that the presentation was belatedly suspended because of a disagreement between the president’s team and lawmakers over plans to curb spending.
A letter from Jonathan read out in the assembly by Senate president David Mark said: “It is infeasible for me to present the budget in the absence of a harmonized position,” with executive, upper and lower house all disagreeing on spending.
He gave no new date, saying only that when lawmakers had agreed a position, then he would deliver the budget.
Lawmakers have indicated they wish to raise spending in the budget for next year, ahead of presidential and parliamentary polls in 2015, but the houses disagree on by how much.
Finance Minister Ngozi Okonjo-Iweala proposed curbing spending in a 2014 budget framework paper after the government spent almost $6 billion of oil savings this year to cover budget revenue shortfalls.
However, another source in the national assembly said on Tuesday that lawmakers were unhappy with low capital expenditure, which they wanted to see increased to boost Africa’s second-largest economy.
The source added that lawmakers were tired of hearing about the need for fiscal prudence when the government was so behind in implementing the 2013 budget.
The House of Representatives and the Senate have both said they want a higher benchmark oil price assumption in the budget to free up more money for spending.
A Senate Committee report on the preliminary budget plan is scathing about what it says is a lack of progress on infrastructure projects.
“The nation has not moved from the old practice of heavy recurrent and light capital (spending),” it said, complaining about the “the alarming rate of uncompleted projects.”
“If these issues are not effectively looked into or controlled, the economic and infrastructural development aspirations of the nation will remain a mirage.”
The early indication that the rescheduled budget presentation would not hold emerged early in the day when there were no state house security officials at the national assembly on Tuesday morning and a red carpet laid out for the president outside the house of representatives removed.
In the budget framework, Okonjo-Iweala had allocated outgoings of N4.5 trillion ($28.27 billion) for 2014, against N5 trillion in 2013, but lawmakers usually raise spending and ask the executive to cover costs with improved revenue collection.
Budget disagreements often centre around the oil benchmark price, over which Africa’s biggest crude exporter saves revenues from oil sales into the excess crude account (ECA).
In the 2014 budget plan document, the finance ministry set the oil benchmark price $74 a barrel.
The House of Representatives and the Senate last week each proposed amendments that would inflate the benchmark to $79 and $76.5 a barrel, respectively. Both moves, by increasing the price, would boost budget spending but reduce savings meant to shield the economy from oil price and production shocks.
The Senate report criticizes “the continuous building up of the nation’s external reserve above the internationally recognized standard of three months … imports, at the expense of the provision of critical infrastructure.”
The ECA only holds around $3.3 billion, compared with $9 billion in December last year.
Yet the report, somewhat inconsistently, also complains that spending down of N700 billion ($4.4 billion) from the ECA is built into the budget, which effectively, it says, raises the benchmark price to $80 anyway.
Special Adviser to the President on Media and Publicity, Dr. Reuben Abati, said the postponement was to ensure strong intergovernmental harmony between the Executive and National Assembly and also prevent unnecessary acrimony that usually trail budget passage in the country.
“Previous acrimonies were blamed on failure of inter- governmental relationship. The budget has been ready for over a week now, but since the two arms of the National Assembly are yet to harmonize their positions on the Crude oil bench mark in the Medium Term Expenditure Framework and the fiscal strategy paper, it was wise for Mr. President to wait until this is done,” Abati said.
He said the Presidency will cause the budget to be laid before the National Assembly as soon as the harmonization is concluded.
