Why 2014 Budget presentation stalled indefinitely

Disagreement between the Senate and House of Representatives on the right benchmark for crude oil made President Goodluck Jonathan to postpone indefinitely the much-awaited 2014 Budget presentation to a joint session of the National Assembly yesterday.
President Jonathan had earlier postponed the presentation of the 2014 Budget estimates to both Chambers of the National Assembly last week Tuesday, November 12, 2013, over non-passage of the Medium Term Expenditure Framework (MTEF) by both Houses.
In a letter read yesterday to the members of the House of Representatives by the Speaker, Aminu Waziri Tambuwal, President Jonathan explained that the failure of the Senate and the House to harmonize the benchmark figures for the 2014 Budget stopped him from coming to lay the document before the NASS.
While assuring that he would come to address the National Assembly on the budget estimates as soon as the disparity in the benchmark was harmonized, he appealed to the lawmakers to tackle the issue expeditiously.
The letter read in part “Re: 2014 Budget, Please, recall that I had written requesting the Honourable House of Representatives to grant me the slot of 12 noon on Tuesday, 19th November, 2013, to enable me address a Joint Session of the National Assembly on the 2014 Budget.
“However, considering the fact that, whereas the Distinguished Senate has approved the Medium Term Expenditure Framework (MTEF) based on a benchmark of $76.5 per barrel, the Honourable House of Representatives has used a benchmark of $79 per barrel, it is infeasible for me to present the budget in the absence of a harmonized position on the MTEF.
“In the circumstance, it has become necessary to defer the presentation of the 2014 Budget to a Joint Session of the National Assembly until such a time when both respected chambers would have harmonized their positions on the MTEF. It is my hope that this will be in the shortest possible time.
“Please accept, Honourable Speaker, the assurances of my highest consideration and esteem.”
The House had, on Thursday November 14, 2013, passed the Medium Term Expenditure Framework and Fiscal Strategy paper (MTEF), pegging the oil benchmark for the 2014 Budget at $79.
Earlier, the Senate passed the document on Tuesday, November 12, 2013, and pegged the benchmark at $76.5. But the Executive arm proposed that the benchmark should be $74 per barrel.
The passage of the MTEF in the House was with serious disagreements among the members as it was gathered that the politicians were divided along party lines.
Though it was done in a closed session, Daily Newswatch learnt that the crisis in the ruling People’s Democratic Party (PDP) reared its ugly head among members loyal to Bamanga Tukur, Baraje and those of the All Progressives Congress (APC).
While 62 lawmakers voted for $76, 79 legislators, mainly of APC and splinter PDP members insisted on $79.
Adopting the recommendations of the report on the MTEF and FSP submitted by the committees on Finance, Budget and Research and Aid, Loans and Debt Management, the lawmakers also fixed the average crude oil production at 2,3883, 2,5007, and 2,5497 million barrels per day for 2014, 2015 and 2016 respectively.
The average exchange rate of N160 to a dollar was approved for the next three years with corporate tax fixed at 30 percent and Value Added Tax (VAT) at 5 percent respectively.
Other recommendations include that, “the government should strengthen and consolidate its fiscal strategy to narrow the gap between projected and actual revenue for the period 2014-2016, curtailing oil theft and diversifying the economy to increase tax bases so as to increase tax revenue.”
The lawmakers also asked the executive that “the details of SURE-P projects to be executed be attached as an addendum to the annual budget estimates for approval by the National Assembly.”
On the Excess Crude Account (ECA), the lawmakers approved the distribution to the tiers of government of N666.9 billion from the excess crude account as proposed by the executive.
The National Assembly Complex was shut to workers on Grade Levels 01-14 vide a directive from the clerk of the National Assembly mandating workers that fall within the grade levels to resume for work by 2pm instead of the official 8am.
Failure by the president to present the budget proposal made House members to close plenary quite early with the green chambers becoming desolate as early as 12 noon.
And the Presidency yesterday clarified that the disparity between the Senate and House of Representatives on the budget benchmark was responsible for the delay in the presentation of the 2014 Budget.
It said President Jonathan did not boycott the National Assembly for security reasons as being peddled in certain quarters.
The Presidency noted that the process of waiting for the two legislative houses to arrive at a final figure on which the budget will be premised was the reason the president did not appear at the joint session of the NASS to present the budget yesterday.
“The president chose to allow the two Houses arrive at a harmonized figure, after which the presentation of the 2014 Budget will be done by Mr. President, such that the process and approval by the National Assembly will not be unduly encumbered,” the Presidency stated.
Senior Special Assistant to the President on Public Affairs, Dr. Doyin Okupe, in a press conference held yesterday in Abuja, said: “In the preparation for the 2014 Budget, and in accordance with projections in the 2014-2016 medium term expenditure frameworks, the Federal Government initially proposed a $74 per barrel crude oil.
“In the course of further consultations, some understanding evolved around $76.5 per barrel on which the budget was prepared.
“It subsequently became known that there is an apparent disparity in the figures adopted by the two houses of the National Assembly as benchmark for the budget. This disparity, if not harmonized, will grossly undermine the veracity of the projections in the 2014 Budget as prepared by the Federal Government.”
Okupe stated that, “We assert that this is not a boycott of the National Assembly or an attempt to create discord between the two arms of government. Rather, it is an effort to improve on procedural efficiency, conviviality and co-operation between the legislature and the executive in the overall interest of our nation.
“It is in this light that we unequivocally debunk insinuations in some section of the media that the president boycotted the National Assembly yesterday for security reasons or that government has anything to hide on the budget issue.”
Also, yesterday, Special Adviser to the President on Media and Publicity, Dr. Reuben Abati, who confirmed that the 2014 appropriation was ready for presentation by the president, said the delay was due to need to attain “inter-governmental harmony” between the executive and the National Assembly to prevent the usual hiccups associated with the passage and implementation of previous budgets.
Abati spoke while responding to inquiries on the budget presentation by State House correspondents at the Presidential Villa, Abuja.
According to him, “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 benchmark in the Medium Term Expenditure Framework (MTEF) and the fiscal strategy paper (FSP), it was wise for Mr. President to wait until this is done.”
He assured that Presidency will “cause the budget to be laid before the National Assembly as soon as the harmonization is concluded,” adding that the executive was working hard to avoid acrimonies associated with previous budgets to save the country unnecessary bickering arising from disagreement between the Legislature and the Executive in course of appropriation proposal and budget implementation.
In the same vein, the Chief Political Adviser to the President, Ahmed Gulak, while responding to questions from State House correspondents, said it does not necessarily mean that the president must be there, explaining that the constitution provides that the appropriation will be presented or be caused to be laid before the National Assembly.
He dismissed claims that the president was avoiding the National Assembly to save self from the alleged plan to embarrass him by the opposition.
He insisted that, “this is not true. First, the President is not scared of any body and secondly, the PDP is one strong united party and as such no one can embarrass the president in the National Assembly.
“These people are not on ground. They do not even know how to do political calculation properly. They should stay in their states and develop them and make impact in their respective states instead of doing things that will not profit them.”
But some senators who spoke to DailyNewswatch on the issue berated President Jonathan’s action, saying that the differential on crude oil benchmark approved by both chambers as one of the parameters for the 2014 Budget was not enough reason for such an action since harmonization can still be arrived at later.

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