Yar'Adua Signs N2.748 Trillion Budget 2008

After several months of disagreement between the executive and the legislative arms of government on the 2008 Appropriation Bill, President Umaru Yar'Adua, yesterday, signed the Bill into law with a charge to all government agencies to implement it with "the highest sense of responsibility and with total deference to due process."

The total amount budgeted for the 2008 fiscal year is N2.748 trillion, comprising N860 billion for capital and N1.888 trillion for recurrent.

Although the signing ceremony was billed for 10 o'clock in the morning, it was not until 3:00 p.m that it finally took place following what a source described as the state of the president's health. Reporters were not allowed to witness the event as has been the tradition.

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The compromise that was offered last week was signed into action, so this is just confirmation of what was expected to happen. It is good that Nigeria is attempting to build capital, but it is hard to tell how much will actually buy the capital. The banning of reporters during the event shows the strong presence of tradition in Nigeria.

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President and Assembly agree on budget

After the protracted bickering over the delay in the passage of the 2008 Appropriation Bill, the Presidency and the National Assembly have reached an agreement on how to address the points of disagreement in the budget.

According to [Ayogu Eze], the President would compile his reservations on the budget and send them to the National Assembly in form of an amended bill to the budget with the Assembly pledging to give them positive consideration.

Adeniyi said in Abuja yesterday that "it was an amicable meeting. It was very cordial. And an agreement was reached. And under it, the President will assent to the budget. He will then send an amendment bill to the National Assembly on the areas there were consensus on review.

"Both parties resolved their differences on the budget and decided to reach a compromise. The budget document will be signed the way it is now but an amendment would be sent to the NASS in another two weeks."

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As posted earlier, the budget delay has been very detrimental to Nigeria's economy. It's a good thing that the disagreement is getting closer to being resolved. Contrary to the somewhat misleading news headline, however, the budget is not yet finalized or written.

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Budget Delay Cripples Economy

Experts have expressed their views on the possible effects the delay in the passage of the 2008 Appropriation Bill into law may have on the economy and its constituent sectors, agreeing that such effects are undesirable.

Despite expectations late last year that the budget would be passed early following the cordial relationship between the executive and legislative arms of government, the passage of the Appropriation Bill into law has experienced an impasse between the two arms of government in recent times.

Commenting on the issue, the spokesman of the Central Bank of Nigeria (CBN), Festus Odoko, in a telephone interview on Sunday, said that an early passage of the budget would normally make things work out smoothly.

He pointed out that in the event of a delay in passing the Appropriation Bill into law like it is now, a provision existed that permitted the President to spend up to a certain proportion of the previous year’s budgetary allocation.

He added that though the fact that the President could continue spending to a certain limit to meet essential expenditures might reduce the undesirable effects of the delay, some contractors might resort to borrowing heavily from banks to meet their obligations, thus causing the various banks to be increasingly exposed in terms of credit given.

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The tax appropriation bill for this year has been yet again postponed. Economic experts agreed that postponing the tax appropriation bill is harmful for Nigeria's already fragile economy. The current law in place allows the president to spend up to a certain percentage of last year's budget, but that may not be enough to cover the necessary expenses. One of the projected outcomes of the postponement is that, as a result of the government not having money to pay contractors, the contractors will have to borrow exorbitant amounts of money from banks. The banks would then be subject to the terms of credit that they agreed upon with their borrowers.

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Government Introduces New Rural Development Plan

The Federal Government yesterday presented to stakeholders for inputs a three-year draft rural development plan for the country called the, "Community Economic Empowerment and Development Strategy (CEEDS)".

Minister and Deputy Chairman of the National Planning Commission (NPC), Senator Sanusi Dagash, who presented the documents to the stakeholders in Abuja yesterday, said CEEDS is estimated to cost about N248.64 billion.

"CEEDS conceptual framework is premised on the dire need for restoration of the human dignity and hope for poor communities in rural areas.

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Although some may say the US has a poverty problem, it is nothing compared to that of Nigeria. To say that even N248.64 billion could make a dent in the poverty situation of Nigeria is absurd. Even if the money was used without corruption or other problems, the amount of people below any poverty line in Nigeria is to enormous for billions of Naira to alleviate.

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How Obasanjo Spent $13bn on Power

Clearer picture of how the Obasanjo administration spent $13 billion on the power sector emerged yesterday with the Minister of State for Energy (Power), Mrs. Fatima Ibrahim, giving a breakdown of the expenditure over a period of eight years.

And following the failure of the National Integrated Power Project (NIPP) to materialise, the 36 states and the 774 councils are now demanding the refund of the $3.2 billion they contributed for its implementation, according to Governor Gabriel Suswam of Benue State.

She said the sum of N235 billion; $6.5 billion and 330 million Euro were used to finance the National Integrated Power Projects (NIPP).

She said another $4.6 billion sourced from the international creditors and $1.6 billion from Joint Venture Calls (JVCs) were also used to finance the sector during the period.

Ibrahim said although there was no evidence of misappropriation of the funds, some contracts that were paid for were abandoned by the contractors after payment.

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Following up on this story, the government has finally responded to the question of the people and the questions of the state government. The money was reportedly all allocated to certain projects, but that does not rule out the possibility of massive corruption or faulty allocation. The government's explanation was that many contrators who were hired for the job did not complete their tasks. This money that was not returned upon will be sought out from the contractors, and hopefully the government can come closer to their ambitious power supply goals.

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Nigeria parliament passes 2008 budget, spending up

Nigeria's National Assembly passed a final version of the 2008 budget on Wednesday that foresees a 21 percent hike in proposed expenditure and an even sharper increase on what the government actually spent last year.

The Senate and House of Representatives, which had passed slightly different versions of the budget last week, reconciled their figures and adopted the 2.89 trillion naira total spending proposed by the upper chamber.

The harmonised bill will now be sent to President Umaru Yar'Adua for final approval. He had originally proposed an annual spending figure of 2.45 trillion naira.

To increase the amount of money available to be spent in this year's budget, the lawmakers revised upwards the benchmark oil price to $59 per barrel from $53.83 in the executive's original bill.

The Senate had said the additional spending was "committed to the provision of water, roads, power, enhancement of social services such as education and healthcare delivery".

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Although the budjet has not been approved by Yar'Adua, a 20% increase in spending is quite signifigant. The addition is supposed to help provide more quality public goods and services, and the Nigerian people may appriciate the extra spending. Hopefully, this new budjet, and the higher oil prices from Nigeria do result in added stability and satisfaction with the Nigerian Government.

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