Why Jonathan aborted presentation of 2014 budget

The presidency said on Tuesday that President Goodluck Jonathan aborted the presentation of the 2014 budget to the National Assembly in the national interest.

The president wrote the lawmakers  seeking a further deferment of the exercise until the lawmakers had reached a consensus on the appropriate benchmark on which revenue projections from the sale of oil, Nigeria’s major source of revenue, is reached.

He was to present his 2014 budget speech to  joint session of the National Assembly during which he was expected to make revenue and expenditure projections for the coming year.

This is the second time the presentation is being postponed as it was originally billed to take place last week Tuesday.

Some reports indicated  that Jonathan might have shifted the budget presentation to avoid being heckled by aggrieved lawmakers of the Peoples Democratic Party (PDP).

There were no State House security officials at the National Assembly TUesday morning and the red carpet laid out for the president outside the House of Representatives had been removed, a Reuters witness said.

Under the 2014 - 2016 Medium Term Economic Framework and Fiscal Strategy Paper (MTEF/FSP) submitted to the National Assembly in September, the executive had proposed $74 per barrel as the 2014 budget benchmark.

However, following an understanding reached between both arms of government, a joint Senate and House Committee of Finance and Appropriation, raised the benchmark to $76.5 per barrel two weeks ago.

However, the House in its own version of the MTEF/FSP passed last week  hiked the benchmark to $79 per barrel, which the executive considers disorienting to its budgetary targets.  consternation among the executive.

The president in the letter addressed to the House of Representatives and read by the Speaker, Hon. Aminu Tambuwal, during plenary, said: '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.

'It is infeasible for me to present the budget in the absence of a harmonised position on the MTEF.

'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.

'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 harmonised their positions on the MTEF. It is my hope that this will be in the shortest possible time.'

A copy of the letter was also addressed to the Senate President David Mark and read on the floor of the red chamber yesterday.

Jonathan gave no new date, saying only that when lawmakers had agreed on a position, then he would deliver the budget.

Defending the president’s position, the presidency said the delay in presenting the 2014 budget was to ensure strong inter-governmental harmony between the executive and the National Assembly, with a view to avoiding unnecessary acrimony that is usually associated with the budget's passage.

Special Adviser to the president on Media and Publicity, Dr. Reuben Abati, told State House correspondents that 'past discord was 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 harmonise 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 further said the budget would be presented to the National Assembly after the conclusion of harmonisation, adding that the executive was doing everything possible to avoid such acrimonies and save Nigeria the unnecessary stress of post-budget passage delays.

Chairman of House Committee on Media and Publicity,  Hon. Zakari Mohammed, however, describe the cancellation of the budget presentation by the president was inexplicable.

According to him,  there were situations in‎ the past where the MTEF was not passed before the budget presentation.

Mohammed, at a press briefing yesterday, recalled that in 2011 the National Assembly did not pass the MTEF before the 2012 budget proposal was laid and that 'last year, the House of Representatives passed it while the Senate had not passed it and the president still went ahead with the presentation.'

He absolved the House of any blame in the delay in presenting the 2014 budget, stressing that the time needed for the consideration of the budget has not lapsed.

'It is not out our fault as a House that the budget was not presented because according to the law, we are still within the time frame for considering the MTEF because the law states 'not later than six months' and the House received the document on the 17th of September.

“It is not as if the House is not on top of its job, it will still go ahead with its consideration… It will raise a conference committee of the House and Senate and of course, it will take a few days… There’s no definite date for its passage but we will try as much as possible to do it on time,' he added.

However, lawmakers have indicated they wish to raise spending in the budget for next year, ahead of presidential and parliamentary polls in 2015, but they have not agreed by how much.

Finance Minister Ngozi Okonjo-Iweala proposed curbing spending in a 2014 budget framework paper after the government spent almost $6 billion of oil savings this year to cover budget revenue shortfalls.

Economists however had said she would struggle to get the budget passed in parliament.

Reuters quotes a source in the national assembly as saying  on Tuesday that lawmakers were unhappy with low capital expenditure, which they wanted to see increased to boost Africa’s second-largest economy.

In addition, the House of Representatives and the Senate have both said they want a higher benchmark oil price assumption in the budget to free up more money for spending.

There were no state house security officials at the national assembly on Tuesday morning and a red carpet laid out for the president outside the house of representatives had been removed, a Reuters witness said.

In the budget framework, the finance minister allocated outgoings of 4.5 trillion naira ($28.27 billion) for 2014, against 5 trillion in 2013, but lawmakers usually increase spending and ask the executive arm of government to cover costs with improved revenue collection.

Budget disagreements often centre around the oil benchmark price, over which Africa’s biggest crude exporter saves revenues from oil sales into the excess crude account (ECA).

In the 2014 budget plan document, the finance ministry set the oil benchmark price $74 a barrel.

The House of Representatives and the Senate last week each proposed amendments that would inflate the benchmark to $79 and $76.5 a barrel, respectively. Both moves, by increasing the price, would boost budget spending but reduce savings meant to shield the economy from oil price and production shocks.

The ECA only holds around $3.3 billion, compared with $9 billion in December last year.

. A report quoted a principal officer who spoke on the alleged plan to heckle the president, as saying,  'We warned them, the mainstream PDP, then that they should not disrupt the Kawu Baraje-led group when they came visiting.

'What this people want to do now is to ensure they get their own pound of flesh.' On the president's inability to show up, he said: 'What Mr. President has done is morally wrong because this is the first time a hale and hearty president has failed to perform this traditional rite.

'On the other hand, constitutionally, he is at liberty to send a representative to make the presentation on his behalf.

'This development is a pointer to the fact that the New PDP is still very aggrieved over what the other members did to the Baraje group.'

But Special Adviser to the president on Political Matters, Alhaji Ahmed Gulak, while also addressed State House correspondents on the 2014 budget, debunked claims that the president avoided the National Assembly over alleged plans by some PDP members to embarrass him.

'This is not true. First, the president is not scared of anybody 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 the ground. They do not even know how to do political calculations properly. They should stay in their states and develop it and make an impact in their respective states instead of doing things that will not profit them,' Gulak said.

House spokesman, Mohammed, also denied the alleged plan to embarrass the president during the presentation of the budget.