A Review of the Nigerian Energy Industry

Nigerian lawmakers battle President over NNPC, others’ budget

20 October 2011, Sweetcrude, Abuja – The Nigerian House of Representatives and the executive arm of governmnet are on a collision course over the budgets of some key federal agencies, including the Nigeria National Petroleum Corporation (NNPC), Central Bank of Nigeria (CBN), Nigeria Ports Authority (NPA) and the Corporate Affairs Commission (CAC).

The lawmakers insist that the budgets of these agencies must be submitted along with the 2012 Appropriation Bill.

The House, which said its demand was in line with the provisions of the Fiscal Responsibility Act (FRA), had made the same demand before the consideration of this year’s budget, but the executive did not comply.

The House on Wednesday invited Finance Minister Dr Ngozi Okonjo-Iweala, who is also the Coordinating Minister for the Economy, to appear next Thursday to defend the poor implementation of this year’s budget.

In a statement inviting Dr. Okonjo-Iweala, chairman of the House Committee on Appropriation, John Enoh, said: “The Finance Minister Dr. Ngozi Okonjo-Iweala is expected to brief the committee on October 27.

“The committee is committed to the full adherence to the requirement of the FRA, that statutory corporations such as NPA, NNPC, CBN, CAC submit their budgets to the Minister of Finance and that these budgets, accompany the budget proposal that the President lays before the National Assembly.”

As the lawmakers opened debate on Jonathan’s 2012-2015 Medium-Term Fiscal Framework (MTFF) and the 2012 Fiscal Strategy Paper (FSP) proposal, many expressed fears about the workability of the document. They also gave the executive the thumbs down on the proposed fuel subsidy removal.

The executive submitted the MTFF and FSP in line with section 11(3) of the FRA, which requires that the framework be presented three months before the budget presentation.

Betty Apiafi (Rivers), Deputy Chairman of the House Committee on Diaspora, said last year, only N1.2 trillion was budgeted for capital expenditure and that N900 billion was spent.

According to her, the MTFF did not state where funds will be sourced for specific projects. “Obviously, that is why capital budget is not funded”.

She said the MTFF lists projects in communication, power, education, construction and others with no visible outcome.

“Every year, we budget for Power and other sectors. What is the outcome? What should be our expectation on this current projections? We spread ourselves thin by budgeting for too many things and we don’t achieve much.”

Apiafi maintained that it would have been better if the priority projects in Ministries Departments and Agencies (MDAs) are listed and funds provided specifically for them so that projects will not always be abandoned half way.

Enoh (Cross River) said the MTFF states that the Federal Government will save N1.2 trillion from the removal of fuel subsidy. “But the parameters do not show that the subsidy savings is imputed into the 2012 budget.”

He said the inconsistency in the document shows that the Federal Government is not adhering to the dictates of the FRA.

The oil benchmark proposed by government for 2011 was adopted for 2012, he said, adding that it was also premised on the 2.4 million barrels per day production estimates given by the NNPC.

Others who spoke were Samson Osagie, Garuba Datti Mohammed, Umar Bature, Christopher Ettah, Andrew Ochendu and Farouk Lawan.

They expressed concern over the poor implementation of previous Appropriation Acts, saying a new approach must be adopted for the budget to impact meaningfully on the lives of the people.

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