SHARING AND BAKING THE NATIONAL CAKE: REPS STEP IN.

BY: KAYODE ODUNARO

Oftentimes the focus on most budget of government is on the expenditure side to the detriment of the source or sources of revenue to finance the budget. In Nigeria, this fixation has been derogatorily term “sharing the National Cake” and too often little regard is paid to how to bake the cake or how the baked cake to be shared is to be made.

Not only is this practice/mentality a very unproductive way of running the affairs of a developing nation, it is also conducive to corrupt practices. But beyond the issue of how revenue is sourced to finance government and development projects is the issue of whether there is transparency in the process of accumulating the revenue.

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Under the 1999 constitution, section 162(1) requires that the federation shall maintain a special account to be called “Federation Account” into which ALL revenues COLLECTED by the Government of the Federation shall be paid. There are some exception relating to the personal income tax of the personnel of the Armed Forces, the Nigeria Police and Ministry of Foreign Affairs.

Following the radical changes brought about by the Rt. Hon. Dimeji Bankole led House of Representatives in the budget passage process that led to the recovery of N450 billion unspent fund from the 2007 Budget and the discovery of “16 Special Accounts” not captured by the 2008 Budget, the House decided to look further  in preparation for 2009 Budget. The aim was to set a template of revenue profile that would inform appropriation by the House of Representatives.

The House Committee charge with this task is the Finance Committee. It is not surprising that the issue of sources of financing the budget is being emphasized under Rt. Hon. Bankole. Between 2003-2007, he was the deputy chairman of the Finance Committee and is quite conversant with its working being equally an economics graduate from a world acclaim university.

It must be noted that it was mostly the work of the Finance Committee that led to the discovery of unspent funds and “special accounts”. In addition the Finance Committee in tandem with its functions is responsible for such issues as increasing the benchmark of our major source of revenue, the crude oil and determination of signature bonuses. Their job is basically to look at the revenue profiles of the Government to form a basis for the Committee on Appropriation to appropriate funds for Ministries, Departments and Agencies (MDAs)

As aforesaid, the Finance Committee was mandated to work ahead of 2009 Budget instead of starting work after Budget presentation to the National Assembly which is usually the norm. According to Hon. John Eno, the Chairman of the Finance Committee, one of the three committees that was not dissolved by the House, this is the first time the committee is doing such an investigation pursuant of its powers and the House constitutionally guarantee mandate of investigation of any matter it has power to legislate.

Hitherto, work in this direction in relation to revenue sources has been restricted to NNPC and Federal Inland Revenue Services (FIRS).These two sources accounts for almost 90% of our revenue, According to Hon. Eno, their present work is emphasizing the remaining 10% sources of our revenue which are mostly remittances from MDAs for jobs or services done for individuals and corporate bodies. It should be noted that for most countries without revenue generating resources like crude oil or other minerals, it is revenue from FIRS and these remittances that is used for developmental purpose. For us in Nigeria it is regrettable that the influence of revenue from crude oil resources is affecting efficient mobilization of revenue from other sources for developmental purposes.

Well, not any longer, as the Finance committee’s on-going investigations is aimed at correcting what is certainly anomalous in our development process. And unlike the other investigations of the House, this one is not about investigating contracts or project execution or other acts of the executives involving the expenditure of funds, important as they equally are. It is about ensuring compliance with section 162 of the1999 constitution by MDAs.

As I write over 100 MDAs has appear before the Finance Committee on this investigations with startling revelations of serial flouting of the constitution and others acts indicative of corrupt practices. From what is basically a random sample of MDAs that made submissions and explanation to the committee, these revenue sources yielded about N3.5 Trillion between 2003 and March 2008. However, only N1.7 Trillion was remitted into the “Federation Account”. While this is not ordinarily suggestive of fraudulent practices as some agencies like Teaching Hospitals and educational institutions spend some of their generated revenue on running cost by virtue of Enabling Decrees (now Acts) establishing them, the discovery is worth further investigation to rule out corrupt practices or as a means of amending the laws establishing certain agencies to conform with the supreme law of the land- the constitution.

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Explaining their discovery which will form part of the report to be tabled at plenary, Hon. Eno said some of the agencies were set up under military administrations by Enabling Decrees (now codify into Acts of Parliament under democratic government) and such laws empowered them to spend revenue generated or a percentage thereof by their operations which looks like a contradiction of section   162 of the constitution. Of course there were agencies that could not account for fund generated by them or those giving contradictory figures of their revenue profile. All these will form part of the recommendations and report of the committees to the whole house.

In any case, from this pre-budget investigation, the 2009 Budget is likely to get more revenue from MDAs generated funds that were hitherto not captured in the previous budget. It has also raised the issue of legislative amendments of certain laws to conform with our constitution or in the alternative an area of our constitution needing amendment.

At all events, the investigation has further added a fillip to the Rt. Hon Bankole led house pursuit of the establishment of a National Assembly Budget and Research Office (NABRO) style after the US Congressional Budget Office (CBO) which work with experts and professionals on a day to day basis doing what the Finance and Appropriation committees struggle to do within a month or two for budget passage. The NABRO, whose bill is in the process of passage in the House, would provide all the templates of all fundamentals and baseline required for a critical and holistic consideration of budget presented by the executive arm of government.

In the interim, the Rt. Hon Bankole led House is making do with investigations by its finance committee and extra work by legislature to do the work and attempt to change the fixation from sharing to baking the national cake.

  

Chief Kayode Odunaro

Special Adviser, Communications

Speaker House of Representatives