Yar'Adua asks for N352.8bn extra allocation

President Umaru Yar'Adua has requested the National Assembly to approve N352.8 billion supplementary budget. According to him, the supplementary budget is to consolidate and sustain peace in the Niger Delta region, tackle the issue of financing strategic interventions aimed at addressing supply constraints and unemployment in the context of the global economic meltdown. It will equally address the expected reforms in the downstream petroleum sector, settle pension arrears and meet funding shortfall and provide counterpart funding.

The Speaker of the House of Representatives read the letter during the plenary session on Wednesday. The National Assembly had in July approved a supplementary budget of N102 billion requested by the President. Of the amount, over N97 billion was meant for additional recurrent expenditure with the remaining N4.9 billion going for additional capital projects for the year 2009.

Seeking for support

The former supplementary budget has a N10 billion provisional disarmament funds for the Niger Delta amnesty package while N2.4 billion is to supplement funds for the development and launch of a high resolution satellite - Nigeria SAT-2. The Academic Staff Union of Universities' settlement and multiyear tariff order draw the largest allocations of over N21 billion and N30 billion respectively. Mr. Yar'Adua in his current request said of the N352.8 billion, N96.3 billion is additional recurrent expenditure while N256.5 billion is for capital expenditure.

The President explained that in relation to the Niger Delta, "it is extremely important that we embark on projects which would help deepen and consolidate peace as well as lay foundations for sustainable development. This is crucial to rebuilding confidence and trust in the amnesty initiative, enhancing production and improving revenue flow to the federation account, mitigating investment risks, as well as boosting full realisation of the nation's economic potential."

Mr. Yar'Adua told the lawmakers that the details of the expenditures and the Niger Delta amnesty programme are being worked out, based on close consultations with key stakeholders.

He listed the areas of focus to include the East-West Highway (currently under construction); coastal road/highway; East-West rail line; inland communities; dredging of canals; housing and land reclamation projects for oil-producing communities; and environmental clean-up activities. "The money being appropriated will be under a similar arrangement that has been made in respect of funding for the National Integrated Power Project, and appropriate mechanisms of accountability, control and reporting will be put in place," he said.

The President said that the proposed expenditure items will be financed from the Federal Government's share of the Excess Crude Account, proceeds of the soft loan from the World Bank as communicated in his letter dated July 27, 2009, and the use of existing issuance of FGN Bonds by the Debt Management Office, as well as balance of unspent funds from the 2009 appropriation.

Budget performance not satisfactory

Meanwhile, the Senate and the Minster of Finance, Mansur Muktar, met behind closed door on Wednesday during which the proposed extra budget was discussed. Senate spokesman, Ayogu Eze told journalists after the meeting that Mr. Yar'Adua was going to bring a supplementary budget and a request for "virement".

He added, "We are also expecting that all things being equal, the president will present the 2010 budget to the National Assembly on November 19 and after that work can now commence effectively. Right now the minister took some questions on issues that will determine the shape of the 2010 budget. We also took him on the performance of the 2009 budget and others down the years and it was a mutual and very frank discussion and I think that arising from that discussion if we all tap from the ideas and energies generated from the discussion, there is every hope that budget performance and implementation will continue to improve from year to year," Mr Eze said.

He however, added that the upper legislative chamber is not satisfied with the budget performance and neither is the minister himself satisfied with it, "in some places, the performance is as low as 15 per cent and in some places 75 per cent - and that 75 per cent is even doubtful."

Civil servants are responsible

He added, "The government hasn't quite made up their mind about what to do with deregulation; they have been stepping front and backwards until we know what they want to do, we cannot say it will be factored into the budget. Some of the things that will be coming (under supplementary) are crucial projects the government has already embarked upon.

Mr. Eze also blamed civil servants on the implementation of the budget saying, "All of us agreed on one thing; that the problem is with the civil servants who are implementing the budget and the political heads that are supervising them. There is absence of capacity in the MDAs to implement budgets or appropriation that they ask for every year."