Legislators Agree to Belt-tightening, Cut N’Assembly’s Budget by 25%

• Senate slashes recurrent vote to N2.5tn in 2015 budget, raises capital spending to N700bn, scraps service wide vote

By Ndubuisi Francis and Omololu Ogunmade in Abuja

Towing the same path of the federal government to cut costs owing to dwindling oil revenue occasioned by low oil prices, the National Assembly, for the first time in years, has finally agreed to a 25 per cent cut in its annual budget of N150 billion.

By acquiescing to the 25 per cent cut, the National Assembly will shed N37.5 billion of its annual budget, meaning that when the 2015 budget is finally passed, its budget will stand at N112.5 billion.

A source privy to the negotiations between the National Assembly and the executive arm of government told THISDAY on Wednesday that the lawmakers finally agreed to the cut as part of their sacrifice to steer the economy out of the woods following a significant loss of government revenue to falling oil prices.

Prior to their acceptance to slash their budget, the National Assembly’s budget was a no-go-area for the executive, which for years had allotted N150 billion to the legislature even when other MDAs (ministries, departments and agencies) of government were forced to accept budget cuts.

The decision on the cut to the National Assembly’s budget was taken by the lawmakers before the commencement of plenary.

THISDAY had exclusively reported on Wednesday that, while a majority of the lawmakers supported the cut in the National Assembly’s budget, some had kicked against it because they did not want to lose their privileges.

Those who had kicked against the new $52 per barrel oil benchmark as well as the reduction in the National Assembly budget were also said to have demanded that the N50 billion allocated to constituency projects be paid instantly.

In addition to the cut in the National Assembly’s budget, the executive had proposed a 25 per cent cut to the State House budget, and had made cuts to overseas travel and training programmes for public sector workers this year.

Also, the Senate yesterday unanimously reduced the N2.616 trillion proposed for recurrent expenditure in the 2015 budget to N2.5 trillion and simultaneously raised the capital vote from the proposed N633 billion to N700 billion.

The decision followed the presentation and adoption of the report of the joint National Assembly Committee on Finance and Appropriation on the Medium Term and Expenditure Framework presented by its Chairman, Senator Ahmed Makarfi.

The Senate also drastically slashed the subsidy for petrol from the proposed N200 billion to N100 billion and reduced kerosene subsidy from N91 billion to N45.5 billion.

It also slashed the Subsidy Reinvestment and Empowerment Programme (SURE-P) allocation from N102 billion to N21 billion.

In the same vein, the parliament cut the N411.8 billion statutory transfers proposed by the executive to N363.2 and increased non-oil revenue expectations from N3.539 trillion to N4.02 trillion.

The report questioned further the rationale behind voting a whopping N360.9 billion as service wide votes in the budget.

It also queried the allocation of N63 billion for the amnesty programme when the project is actually being financed by the Niger Delta Ministry.
Makarfi also queried the classification of N22 billion as allocation for internal operations of the military under the service wide vote, noting that it should ordinarily be part of the Ministry of Defence budget.

The former Kaduna governor also demanded the proper reclassification of pensions and gratuities under the service wide vote and suggested that the entire service wide vote be completely scrapped, as it was considered an avenue for leakages.

The service wide vote is a major component of the annual budget belonging to ministries, departments and agencies (MDAs) allegedly earmarked for contingencies.

Senators, who spoke on the service wide vote, described the allocation as fake and nothing but an avenue to siphon funds. This allegation, for instance, came against the background that the budget for funding of the amnesty programme is domiciled in the Niger Delta Ministry.

They also argued that the service wide vote window, said to have been created by the administration of President Olusegun Obasanjo, has been used to perpetrate illegality and fraud.

The Senate therefore resolved that henceforth, the votes should be cancelled and allocations under it appropriately directed.

The Senate also formally ratified the $52 billion oil benchmark and exchange rate of N190 to $1 for the 2015 budget which it approved at its closed-door session on Tuesday.

In his remarks, Senate President, David Mark, said budgetary allocations should cut across the three arms of government, noting that there is always talk of diversification of the economy at the beginning of every fiscal year without taking any steps thereafter.

“What this clearly shows is that we all have to tighten our belts across the entire sectors of this government. We have for the last several years relied on oil as the main source of our revenue and I know that budget after budget, we say we will diversify the economy.

“Every time this budget comes we will still be repeating the same thing. The impression I get from this is that those who are responsible for producing the draft merely go there and reproduce what they have been bringing up.

“But I think they need to do a little more; they may not be able to forecast accurately. There are a few things I think we must get right.

“The first thing is let there be a cut across board, the executive, the judiciary and the legislature and we are prepared to lead in this. The areas of leakages we must emphasise on them. The revenue generation and collection, we must make sure that we tighten.

“What has impressed me with the entire discussion and debate is the fact that this has been non-partisan. Everybody has been very fair,” he said.