Like Dbanj, I have a confession to make for the benefit of my audience: We are responsible for the growing recurrent budget. Please don’t take it personal – this advice is especially handy these days when many people seem to have difficulties with refraining from taking things personal. A conscious effort to remain objective in the analysis of an issue is very valuable if we are to make progress as a people. The 2014 appropriation bill is the issue in focus these days. It has generated heated debate in the National Assembly and even hotter debate on social media, mostly fueled by inadequate understanding of the fundamental issues around the budgeting process and the items of the budget.
The crux of the argument is that our recurrent budget for 2014 is too high at 74% compared to the capital budget of 26% – a deterioration in the capital budgetary provision compared to recent years. While governments would prefer the national budget to progressively see improvements in capital allocations compared to recurrent allocations, a few clarifications about the nature of the recurrent items on the budget may be useful. The recurrent portion of the budget contains items which are incidental on an annual basis and constitute a running cost of government. So it is right, as in any efficient operation, to seek to limit the running costs of government by controlling the recurrent allocation, or at least to contain the recurrent budget to the point where it grows slower than the capital budget. But a close study of the 2014 appropriation bill will show that the swelling in the recurrent budget came from items which essentially must be attended to.
Such items include salaries and pension benefits of staff of government ministries and parastatals. Under strong labour campaigns, we have seen salary increases in the health sector and the education sector. These salary increases will cause an inflation of the wage bill and thus increase the recurrent expenditure for the next budget year. Then workers ask for more money, embark on strikes, the opposition makes headlines out of it, and government is pressured to agree to increases which reflect in the next recurrent budget. And a bump in the recurrent budget becomes a campaign point for the opposition. The cycle continues. When Nigerians hear of calls for salary increases, as was the case during the ASUU strike, when the President was under enormous pressure to meet the huge allowances and salary demands by university lecturers, we should remember how it impacts on the recurrent budget; and be less surprised when the recurrent budget grows disproportionately compared to the capital budget.
The President Jonathan administration is making tough choices in cutting down wastage in the budget but the reality is that something structural needs to be done in order to eliminate wastage hence the setting up of the Oronsanye committee. It will be recalled that government had set up the Oronsaye committee in August 2011 out of a genuine concern to cut down on cost of governance and the over bloated public sector that leads to extremely high recurrent expenditures. The committee submitted its report in April 2012 and recommended the reduction of 263 statutory agencies to 161 and the scrapping of 38 agencies.
However, the implementation of the Oronsanye report cannot be singlehandedly achieved by the president given that these departments and agencies are creations of laws which were passed by the National Assembly. The right direction is for the National Assembly to repeal such laws establishing those agencies considered as unnecessarily duplicative.
In her piece titled “National Assembly is partly to be blamed” and published on THISDAY Newspapers of Monday, January 20th 2014, Ijeoma Nwaogwgwu reinforced my notion that the legislature should be held liable for their inability to quit playing politics with the economy and do the needful by enacting laws that will rationalize and streamline the public sector for efficient service delivery. She was of the view that insofar as the National Assembly continues to legislate on new laws setting up departments and agencies of government and lacks the political will to repeal or amend the laws of institutions that duplicate and inefficiently fall over one another, the executive would always contend with the challenge of heavy recurrent expenditure.
The Minister of Finance & cordinating Minister of Economy, Dr Ngozi Okonjo Iweala captured it succinctly in her Budget speech presentation viz :
“I’m also strongly appealing to the legislature and the National Assembly that we will need their help with the review and repeal of some of these laws if we are to achieve the objective of curbing waste, streamlining government expenditure and getting a balance”
Sadly, ours is a National Assembly peopled by politicians who are more concerned about politics and party equation in the NASS than the Oronsanye report. This explains why House of Reps Speaker, Aminu Tambuwal chose the resumption of plenary session (after a long summer break) to invite the Baraje group of the PDP to address members. This also explains why Hon. Femi Gbajiabimila (APC, Lagos) can afford to throw banters and make sweeping remarks at Leo Ogor (PDP, House Leader) thereby igniting conflicts and drama that paralyzed legislative activity. This also explains why Adulmumin Jibrin, House committee chairman on Finance, resorted to compiling 50 JAMB questions for Ngozi Okonjo Iweala and has refused to read and mark the 109 page answer script thereafter. This also explains why NASS fails to give us details of their own budget but lumps up 150 billion as their own allocation.
It is only a sincere President that is intent on getting it right with recurrent expenditure that will take the steps GEJ has taken so far (Oronsanye Committee). It behoves on our legislature to complement his efforts by repealing the relevant establishment laws. That is my confession.
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Ebubedike Akabuwa is an Abuja based legal practitioner. He tweets with the handle @akaebube
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