Tax & Spend Federal Agencies

Nigerian Acting President Yemi Osinbajo received a copy of the N7.44 trillion 2017 Appropriation Bill from the National Assembly last Friday. The Assembly had slightly increased it from the N7.28 trillion proposed by President Muhammadu Buhari last December. According to the Senior Special Assistant to the President on National Assembly Matters Senator Ita Enang, Osinbajo could sign the budget within days even though he has a maximum of 30 days to do so under the law.

However, another serious matter to do with federal spending crept up a day earlier when Senate issued a two-week ultimatum to Acting President Yemi Osinbajo last Thursday to submit the budgets of the Central Bank of Nigeria (CBN), Nigeria National Petroleum Corporation (NNPC), Federal Inland Revenue Service (FIRS) and 35 other federal agencies for its approval. The ultimatum followed a motion sponsored by Senator Bala Ibn Na’Allah (APC, Kebbi) titled “Non-submission of the 2017 budget by Public Corporations in violation of the Fiscal Responsibility Act.”

While moving the motion, Na’Allah said non-compliance with provisions of the Fiscal Responsibility Act constitutes abuse of power and economic sabotage. The Senate then passed a unanimous resolution stopping the agencies from further capital expenditure until they comply with the Fiscal Responsibility Act. Senate President Bukola Saraki said the agencies must comply with the ultimatum. He said, “I cannot see how we can continue in a society where we are fighting corruption and people will be spending money without approval, without appropriation. It must stop; it will stop and is going to stop from now.” The concerned agencies are expected to submit their budgets to the National Assembly within the two weeks’ ultimatum and Saraki directed Senate committees to act expeditiously on the proposals when they are received.

This matter is very serious because it reminds us that the federal budget sent to the National Assembly by the president is only a fraction of total spending by the Federal Government in a year. In fact, former chairman of the Senate Finance Committee Senator Ahmed Makarfi was quoted by Daily Trust two years ago as saying the Federal Government’s total spending was more than double the N4 trillion appropriated by the National Assembly. This is due to the fact that many of the biggest revenue generating agencies spend billions or even trillions of naira without the National Assembly ever appropriating it.

The defaulting agencies listed by Senate include Bureau of Public Enterprises (BPE), National Agency for Science and Engineering Infrastructure (NASEI), Nigerian Airspace Management Agency (NAMA), Nigeria Shippers’ Council (NSC), National Maritime Authority (NMA), Raw Materials Research and Development Council (RMRDC), National Sugar Development Council (NSDC), Nigeria Postal Service (NPS), Nigeria Ports Authority (NPA), Federal Airports Authority of Nigeria (FAAN), Securities and Exchange Commission (SEC), Nigeria Tourism Development Corporation (NTDC), National Communications Commission (NCC), National Agency for Food, Drugs Administration and Control (NAFDAC), Nigeria Customs Service (NCS) and National Broadcasting Commission (NBC).

Others are National Insurance Commission (NIC), News Agency of Nigeria (NAN), Nigeria Copyrights Commission (NCC), Nigeria Deposit Insurance Corporation (NDIC), Nigeria Civil Aviation Authority (NCAA), Federal Inland Revenue Service (FIRS), Nigeria Immigration Service (NIS), Nigeria Electricity Regulatory Commission (NERC), Federal Radio Corporation of Nigeria [FRCN], Federal Housing Authority (FHA), Nigeria Television Authority (NTA), National Automotive Design and Development Council (NADDC), Nigeria Nuclear Regulatory Authority (NNRA), National Business and Technical Examination Board (NABTEB), Federal Mortgage Bank, National Environmental Standards and Regulations Enforcement Agency (NESREA), Industrial Training Fund (ITF), Corporate Affairs Commission (CAC), Standards Organisation of Nigeria (SON) and Oil and Gas Free Zone Authority (OGZFA).

These agencies are the heaviest hitters in the Nigerian economy. They spend more money individually and collectively then most federal ministries. Some of them spend more public funds than even the armed forces, police or all federal government-owned educational and health institutions combined. It is therefore illegal and irrational that they would fail to submit their budgets for appropriation. Among other dangers, this is one of the reasons why the government’s fiscal and the Central Bank’s monetary policy measures often record less than the desired impact.

This matter arose some years ago when the National Assembly demanded to have the CBN’s budget and then CBN Governor Sanusi Lamido Sanusi said under the CBN Act, only its board could approve its budget. It could well be that many other agencies have similar laws that empower their boards alone to approve their budgets. Such laws are now in direct conflict with the Fiscal Responsibility Act, which requires all of them to have their budgets scrutinised and appropriated by the National Assembly. If it were the constitution that mandated this, there would have been no problem but a problem obviously exists where laws passed by the National Assembly are in conflict. The matter of political will then comes in and officials may prefer to have their budgets approved by their boards and ministers rather than the open chamber of the people’s representatives.

No doubt the position of the Fiscal Responsibility Act accords with the mood, expectations and exigencies of this age, that the budgets of all public agencies should be subjected to the widest open scrutiny of the appropriation process. Despite its shortcomings, it is the best option we have as we work to improve on it. If the laws setting up these agencies provide otherwise, we urge the Presidency, Federal Ministry of Justice and the National Assembly to get together, amend the respective laws and bring them into line with the provisions of the Fiscal Responsibility Act. In the meantime, we expect the Acting President to provide the National Assembly the budgets of all these agencies within the two weeks’ time frame.

POSTED BY:OPUOMONI PRIYE

DATE:05/26/2017