THE ROLE OF THE EXECUTIVE

AND LEGISLATURE IN THE

BUDGETING PROCESS

Address by Eze Onyekpere, Esq,

Lead Director, CENSOJ

@ the 1st Gallery Colloquium on

Budgetary Reforms

organized by OrderPaper.ng

on September 26, 2016 in Abuja

1. INTRODUCTION

The State is under a legal obligation to make a budget 1 , which is a

statement of income and expenditure and an indication of the state’s

expenditure priorities for the year. As an economic process, budgets

convert state development plans and priorities into a programme of action.

The human being has unlimited needs while resources to satisfy them are

scarce. The budget offers an opportunity at rationalisation and choice

within a scale of preference drawn up and based on some fundamental

norms. The utility of each item included in the budget may not necessarily

reflect popular opinion and input, hence the budget’s link with politics and

power. Budgeting as defined in this paper will include the stages of

preparation, appropriation, implementation, monitoring and the audit phase.

1.1 The Budget as an Economic Process

The budget is a plan, a template, which provides the opportunity for

evaluation at the end of the budget year. It is framework that links specific

spending objectives with their associated costs. Planning is essential for

public finance management since refusing to plan is stated to be planning

to fail. For fiscal and monetary policy, targets like inflation rate, employment

rate, interest rate, gross domestic product, etc, enable the government and

citizens measure economic performance over time 2 . As an economic

process, the budget and budgeting need to be distinguished. It has been

aptly stated that: Budgeting refers to the whole process of mobilising, allocating, managing and control of national

resources. There are three main components of this process. The first is national planning, which sets

the macroeconomic and social targets of the nation over a defined period of time. The second aspect

relates to the project and sectoral allocations of national resources with a view to satisfying the needs of

1. See sections 80 and 81 of the Constitution of the Federal Republic of Nigeria 1999 requiring

authorisation of public expenditure by the legislature. 2 Eddy Omolehinwa in Government Budgeting in Nigeria, Pumark Nigeria Limited, Educational Publishers

at p.13.

all the citizens as well as the demands of international stakeholders. The first and second elements

determine the nature and scope of fiscal policy, which is the third component of budgeting. Fiscal policy

refers to the means of raising the required revenue and other non-revenue funds and the manner in

which they should be allocated with a view to meeting national macroeconomic and social targets and

goals. That is, fiscal policy refers to all issues relating to the raising of public revenue and allocation of

funds for public expenditure.

The budget on the other hand is a document that represents the final outcome of budgeting. It is therefore a

finished product that merely describes in quantitative (financial) terms the resources, which an individual

organisation intends to spend or commit to various activities within a given fiscal cycle, and the benefits

derivable from the outlay3.

Budgets are instruments of implementing government policy, particularly

economic and social policies. These policies impact on the lives of

individuals, the growth and performance of public and private sector

organizations. Budgets therefore provide a roadmap directing economic

planning by subgroups and individuals in the economy.

1.2 The Budget as a Human Rights Process

The budget could also be seen as a human rights process defining the

steps to be taken for the respect, protection, promotion and fulfillment of

rights. Rights and freedoms most times need budgetary outlays to

guarantee that they do not remain dry letters on parchment. Even in the

new era of the rolling back of the state where government articulates its

role as that of a facilitator that sets the enabling environment for the private

sector to do the actual provision of services, resources are still needed to

guarantee the enabling environment.

For the three fundamental duties of the state in human rights jurisprudence,

the duty to respect many at times may not require the deployment of

resources. But the duty to protect individuals and communities from

violations by third parties will require some level of policing work that will

need the deployment of resources. Laws, standards and policies have to

be enacted and enforced. The obligation to fulfill clearly involves the

3 Ademola Ariyo in Strategies for Civil Society Participation in National Budgeting, paper presented at a

Capacity Building Workshop organised by Socio Economic Rights Initiative, 2000.

deployment of resources that will be needed for practical actions to satisfy

human rights.

1.3 The Budget as a Political Process

The budget can be seen as a tool of political decision making in allocating

resources to achieve political ends. The main actors in the budgeting

process and the determining authorities are mainly elected politicians who

are charged with leadership decisions. Thus, the following quotation is apt;

“... the national budget is a representation in monetary terms of governmental activity. If politics is regarded

in part as conflict over which preferences shall prevail in the determination of national policy, then the budget

records the outcome of that struggle. If one looks at politics as a process by which the government mobilises

resources to meet pressing problems, then the budget is a focus of these efforts4.

The budget can also be described as:

The statement of the expenditure preferences of the government

expressed in monetary terms and subject to the constraints imposed

by the environment indicating how the available resources may be

utilised to achieve whatever the dominant individuals within the

political leadership agree to be government priorities5.

A budget is the most powerful economic policy instrument of government

and as such, a vital transformational tool. It is usually made through a

proposal sent in the form of a bill by the executive to the legislature. When

passed by the legislature, it is signed into law by the head of the executive

arm as an Appropriation Act or Law. As a political process, a budget

reflects the prevalent political economy paradigm adopted by the

leadership of a state.

4. Aaron Wildavsky cited at page 19 of a Rights Based Approach Towards Budget Analysis, IHRIP, 1999.

5 Eddy Omolehinwa in Government Budgeting in Nigeria, Pumark Nigeria Limited, Educational Publishers at

p.11.

2. GUIDING LAWS AND OBJECTIVES

A plethora of laws, policies and frameworks guide and regulate the

budgeting process. These laws seek to define the spheres of the different

actors in the executive and legislature, the timing of certain acts and the

power of oversight and responsibility to account for public finance

management. The laws and subsidiary legislation include the Constitution,

the Finance (Control and Management) Act, the Fiscal Responsibility Act,

the Appropriation Acts, Financial Regulations, etc. Treasury circulars made

by the Finance Minister or the office of the Accountant General also guide

budgeting activities in the executive arm. Essentially, the Constitution

entrenches the principle of checks and balances and appoints the

legislature the overseer and watchdog of public finances. The powers of

the legislature include pre-appropriation control, control of actual

expenditure and post appropriation control6.

The objectives of the legal provisions include the following7

That all revenues are collected and duly accounted for;

All expenditures are duly authorized and accounted for;

There is proper application of government funds so that appropriated

funds are spent for the purposes they are meant for;

The funds and properties of government are kept under proper

custody and suitable condition; and

6 Justice C.C Nwaeze in “The Legal Regulation of Budgeting”, Journal of Economic, Social and Cultural

Rights, Vol1. No.4 at page 4. 7 Ajayi (1983) cited with approval by Eddy Omolehinwa in Government Budgeting in Nigeria, supra.

The books, records and accounts of government are properly

maintained.

2.1 Establishment of the Consolidated Revenue Fund of the

Federation

By S.80 of the Constitution, the Consolidated Revenue Fund of the

Federation is established while recognizing the existence of other Funds of

the Federation:

(1) All revenues or other moneys raised or received by the Federation

(not being revenues or other moneys payable under this Constitution

or any Act of the National Assembly into any other public fund of the

Federation established for a specific purpose) shall be paid into and

form one Consolidated Revenue Fund of the Federation.

The Federation Account is created by section 162 (1):

162. (1) The Federation shall maintain a special account to be called

"the Federation Account" into which shall be paid all revenues

collected by the Government of the Federation, except the proceeds

from the personal income tax of the personnel of the armed forces of

the Federation, the Nigeria Police Force, the Ministry or department

of government charged with responsibility for Foreign Affairs and the

residents of the Federal Capital Territory, Abuja.

2.2 Budget Initiation, Timing And The Legal Basis For Legislative

Appropriation

The Nigerian financial year runs from January 1 to December 31 8 and

single year or annual budgeting is the practice. The Constitution by S. 80

(2), (3) and (4) declares that no funds shall be withdrawn from the

8 See the Financial Year Act. Cap.C23, Laws of the Federation of Nigeria, 2004.

Consolidated Revenue Fund except in accordance with a legal procedure

to wit; to meet expenses charged on the Fund or through appropriation in

accordance with section 81 of the Constitution. Other funds of the

Federation also have the same rigours of withdrawal attached to them.

Thus, the power of the legislature in matters of appropriation and control of

public expenditure is established9.

By S.80 (2):

No moneys shall be withdrawn from the Consolidated Revenue Fund of the Federation except to meet

expenditure that is charged upon the fund by this Constitution or where the issue of those moneys has been

authorised by an Appropriation Act, Supplementary Act or an Act passed in pursuance of section 81 of this

Constitution10

.

(3) No moneys shall be withdrawn from any public fund of the Federation, other than the Consolidated

Revenue Fund of the Federation, unless the issue of those moneys has been authorized by an Act of the

National Assembly11

.

(4) No moneys shall be withdrawn from the Consolidated Revenue Fund or any other public of the

Federation, except in the manner prescribed by the National Assembly12

.

The President is charged with the initiation of budget proposal by S.81 as follows:

S. 81.-(1):

The President shall cause to be prepared and laid before each House of the National Assembly at any time

in each financial year estimates of the revenues and expenditure of the Federation for the next following

financial year.

(2) The heads of expenditure contained in the estimates (other than expenditure charged upon the

Consolidated Revenue Fund of the Federation by this Constitution) shall be included in a bill, to be known as

an Appropriation Bill, providing for the issue from the Consolidated Revenue Fund of the sums necessary to

meet that expenditure and the appropriation of those sums for the purpose specified therein.

9 Further justification for the legislative powers of appropriation can be found in S.4 of the Constitution which

vests legislative powers on the National Assembly to make laws for the peace, order and good government of the Federation. 10

Compare with the position in the United States of America where the Constitution by Article 1, Section 9, clause 7 states “ no money shall be drawn from the Treasury, but in consequence of Appropriations made by Law, and a regular statement and account of receipts and expenditures of all public moneys shall be published from time to time”. The second part of this provision introduces the element of accountability and transparency, which is lacking in Nigeria’s constitutional provisions. 11

Ibid. 12

Ibid.

For a budget to effectively perform its function, it needs inter alia to be

timely. In accordance with the 1999 Constitution, the President or Governor

shall cause to be prepared and laid before the legislature at any time in

each financial year estimates of the revenues and expenditure of

government for the next following financial year13.

Comparatively, the position in the United States of America mandates the

President to present the budget on or after the first Monday in January but

not later than the first Monday in February of each year14. And the fiscal

year in the United States starts by October 1.

Under the Nigerian provision, the executive has been laying budget

proposals before the legislature very late in the year. At times, this is done

in November or December. This leaves the legislature with little or no time

to properly do its scrutiny and approval work before the commencement of

the next year. For the legislature to effectively review and approve budget

proposals, they may need at least four months if they are not already

beclouded with a lot of bills awaiting passage. It is proposed that the 1999

Constitution be amended to mandate the executive to lay budget proposals

before the legislature in August, at least four months before the end of the

financial year. The same amendment should also provide for the

legislature to complete the passage of the Appropriation Act before the end

of the financial year in December. The proposed amendment is

necessitated by the fact that this cannot be achieved by another legislation

considering the supremacy of the Constitution clause in S.1 (3) of the

Constitution viz, the words “at any time” in the Constitution will take

precedence to any stipulated time in any other legislation.

13

S. 81 and 121 of the 1999 Constitution for the federal and state levels respectively. 14

Office of Management and Budget Circular No. A -11 2000 P.7.

3. PRE BUDGET STATUTORY DEMANDS: THE COLLABORATIVE

SPIRIT OF THE FISCAL RESPONSIBILITY ACT

Before 2007, pre-budget matters which ideally should form part of budget

preparation procedure were not covered by law. They were guided by

policy and practice. However, the Fiscal Responsibility Act (FRA) has come

to fill the vacuum. By S. 12 of the FRA, the following provision is made:

(1) The Federal Government after consultation with the States shall-

(a) not later than six months from the commencement of this Act, cause

to be prepared and laid before the National Assembly, for their

consideration a Medium-Term Expenditure Framework for the next

three financial years; and

(b) thereafter, not later than four months before the commencement of

the next financial year, cause to be prepared a Medium-Term

Expenditure Framework for the next three financial years.

(2) The framework so laid shall be considered for approval with such modifications if

any, as the National Assembly finds appropriate by a resolution of each House of

the National Assembly.

By S.19 of the same FRA:

Notwithstanding anything to the contrary contained in this Act or any other law, the Medium-term

Expenditure Framework shall-

(1) be the basis for the preparation of the estimates of revenue and expenditure

required to be prepared and laid before the National Assembly under section 81

(1) of the Constitution.

(2) The sectoral and compositional distribution of the estimates of expenditure

referred to in subsection (1) of this section shall be consistent with the medium-

term developmental priorities set out in the Medium-Term Expenditure

Framework.

Thus, the FRA provides for the preparation of the MTEF by the executive and its approval by the legislature. The

MTEF is proclaimed to be the basis for preparation of the estimates which the President is constitutionally bound to

lay before NASS. The FRA therefore anticipates collaboration between these two rams of government. By S.12 of the

FRA, the MTEF has the following composition:

(6) The Medium-Term Expenditure Framework shall contain-

(a) a Macro-economic Framework setting out the macro-economic projections, for

the next three financial years, the underlying assumptions for those

projections and an evaluation and analysis of the macroeconomic

projections for the preceding three financial years;

(b) a Fiscal Strategy Paper setting out-

(i) the Federal Government’s medium-term financial objectives,

(ii) the policies of the Federal Government for the medium-term

relating to taxation, recurrent (non-debt) expenditure, debt

expenditure, capital expenditure, borrowing and other

liabilities, lending and investment,

(iii) the strategic, economic, social and developmental priorities

of the Federal Government for the next three financial years,

(iv) an explanation of how the financial objectives, strategic,

economic, social and developmental priorities and fiscal

measures set out pursuant to sub-paragraphs (i), (ii) and (iii)

of this paragraph relate to the economic objectives set out in

section 16 of the Constitution;

(c) an expenditure and revenue framework setting out-

(i) estimates of aggregate revenues for the Federation for each

financial year in the next three financial years, based on the

predetermined Commodity Reference Price adopted and tax

revenue projections;

(ii) aggregate expenditure projection for the Federation for each

financial year in the next three financial years,

(iii) aggregate tax expenditure floor for the Federation for each

financial year in the next three financial years, and

(iv) minimum capital expenditure floor for the Federation for

each financial year in the next three years;

Provided that, the estimates and expenditures provided under

paragraph (c) of this subsection shall be-

(i) based on reliable and consistent data certified in

accordance with section 13(2) (b) of this Act,

(ii) targeted at achieving the macro-economic projection set

out in subsection (2) (a) of this section,

(iii) consistent with and derive from the underlying

assumptions contained in the macro-economic framework,

the objectives, policies, strategic priorities and

explanations in the Fiscal Strategy paper;

(d) a Consolidated Debt Statement setting out and describing the fiscal

significance of the debt liability of the Federal Government and measures to

reduce any such liability; and

(e) statement describing the nature and fiscal significance of contingent

liabilities and quasi-fiscal activities and measures to offset the crystallization

of such liabilities.

Under extant public finance management jurisprudence, the MTEF is

undergirded by a Medium Term Sector Strategies (MTSS) of the various

Ministries, Departments and Agencies of Government. For MTSS which

undergirds the MTEF, their objectives are to:

Articulate medium-term (three years) goals and objectives against the background of the overall goals of the high level sectoral policies, the attainment of the Sutainable Development Goals, etc;

Identify and document the key initiatives (that is, projects and programmes) that will be embarked upon to achieve the goals and objectives;

Cost the identified key initiatives in a clear and transparent manner; Phase implementation of the identified initiatives over the medium-

term; Define the expected outcomes of the identified initiatives in clear

measurable terms; and Link expected outcomes to their objectives and goals.

To buttress the spirit of collaboration between the arms of government and

its expansion to include other stakeholders, the MTSS is to be prepared by

a sectoral team including officials of the MDA, representatives of the

committee with oversight over the MDA in NASS, organised labour, private

sector, civil society and professionals relevant to the sector.

4. IN THE BEGINNING: EXECUTIVE PRACTICES

Ideally, the practice is for a Call Circular to request budget proposals from

MDAs according to the stated guidelines and general objectives of the

government found in the MTSS and MTEF. The Call Circular is usually

accompanied by specimen forms to be completed and by a time- table for

budget discussions indicating the dates allocated for MDAs. The Call

Circular outlines the operative economic policy of the Federal Government

including its guiding principles, objectives, instruments, targets and macro

economic policies. The Call Circular also furnishes the MDAs with

guidelines for preparation of the budget and emphasizes the likely ceilings

to the respective overall expenditure. The Revenue Projections that would

inform the expenditure estimates are also included to enable the MDAs to

make returns on revenues collectable by them in the form of fees, charges,

levies, etc. The Call Circular also elicits information relating to recurrent

and capital expenditure projections.

When the proposals from the various ministries and agencies have been

received, they are collated and distributed among the schedule officers in

Budget Office for analysis and summary presentation. Thereafter the

Budget Office invites the ministries and agencies to defend their proposals.

The proposals are adjusted and readjusted until they become acceptable.

The proposals are aggregated and passed on to the Minister of Finance

(now Minister of Budget and National Planning) who will arrange a meeting

with the other Ministers. Thereafter the Minister of Finance briefs the

President, before the budget is presented to the Federal Executive Council.

It is after the adoption by the Federal Executive Council that the budget is

presented to the National Assembly by the President.

Budget initiation and formulation is the foundation of effective budgeting. It

is at that point that all programmes, projects and activities going into the

budget should be presented. Since the Constitution and other laws did not

make any definite provision for these issues, there has been a turf war

between the executive and the legislature leading to virtual stalemates

every year15. The Philips Committee recommended a process for budget

initiation and formulation in view of the perennial executive legislative

feud16.

Determination by the National Assembly, on the recommendation of

the President, based on the advice of the National Economic Council

of the permissible aggregate government expenditure and of the core

revenue.

Determination by the President of sectoral percentage allocations

based on Federal Government priority scale and ratified by the

National Assembly17.

Budget Office of the Federation to aggregate all current liabilities and

existing financial commitments which stretch beyond the current fiscal

year and make full provisions for next years commitments in the next

budget.

Budget Office of the Federation to estimate overall Federal

Government retained revenue for the coming fiscal year.

15

See the Limits of Legislative Power in Appropriations in the next section. 16

Strengthening the Federal Budget System in Year 200 and Beyond: Report of the Budget System Review Committee, (Main Report) March 2000, hereinafter called the Phillips Committee Report. 17

The Phillips Committee recommended that the prior determination of sectoral percentages should be based on best of judgement of top political decision makers, trends over the past several years, international norms specified by relevant international organisations such as UNESCO, WHO and FAO, levels attained in countries which Nigeria may regard as models for particular sector developments.

Budget Office of the Federation to issue Call Circulars based on

steps 1 to 4.

Submission of budget proposals by ministries/agencies.

Budget Office to analyse budget proposals from ministries/agencies.

Budget Office to hold inter-Ministerial meetings on budget proposals

from ministries/agencies

Meeting of inter-Branch Budget Committee for harmonization of the

budgets of the legislature, executive and the judiciary. Meeting of

National Economic Council to harmonize the budgets of the three

tiers of government Federal, State, Local.

Budget Office to collate the recommended budget and submit same

to the President.

President and Federal Executive Council to consider and adopt the

recommended budget.

President to lay the adopted budget before the National Assembly

The year 2000 recommendations of the Committee have been overtaken

by the FRA. However, the suggestion by the Committee is that of

collaboration between the executive and the legislature.

By S.20 of the FRA, the Annual Appropriation Bill to the NASS from the President is to be accompanied by the following.

(a) a copy of the underlying revenue and expenditure profile for the next two years;

(b) a report setting out actual and budgeted revenue

and expenditure and detailed analysis of the performance of the budget for the 18 months up to June of the preceding financial year;

(c) a revenue framework broken down into monthly

collection targets prepared on the basis of the predetermined Reference Commodity Price as contained in Medium-Term Expenditure Framework.

(d) measures on cost, cost control and evaluation of

results of programmes financed with budgetary resources;

(e) a Fiscal Target Appendix derived from the

underlying Medium-Term Expenditure Framework setting out the following targets for that financial year-

(iv) target inflation rate, (v) target fiscal account balances, (vi) any other development target deemed appropriate; and

(f) a Fiscal Risk Appendix evaluating the fiscal and other related risks to the annual budget and specifying measures to be taken to offset the occurrence of such risks.

It is submitted that the purpose of submitting these documents

along with the estimates is to enable the legislature properly

scrutinise the proposed expenditure before approval and may

be, do the necessary additions and subtractions. Again, by

S.13, the FRA sets the Aggregate Expenditure Ceiling for a

financial year as follows:

(1) aggregate expenditure and the aggregate amount appropriated by the National

Assembly for each financial year shall not be more than the estimated aggregate revenue

plus a deficit, not exceeding three percent of the estimated Gross Domestic Product or

any sustainable percentage as may be determined by the National Assembly for each

financial year.

(2) aggregate expenditure for a financial year may exceed the ceiling imposed by the

provisions of subsection (1) of this section, if in the opinion of the President there is a

clear and present threat to national security or sovereignty of the Federal Republic of

Nigeria.

4.1 Approval of Revenue Profile

The Constitution apart from mandating the President to cause to be

prepared estimates of expenditure of the Federation for the next following

financial year also mandates him to prepare and lay before the legislature

estimates of the revenue. However, it appears that public and legislative

attention is more focused on expenditure than on revenue. However, there

is the need for a proper alignment of expenditure to revenue to ensure that

the appropriation does not become an exercise in shadow chasing.

4.2 Procurement of Debts and Debt Limitation

Part of the MTEF is the Consolidated Debt Statement which should be

governed by the Limits of Consolidated Debt as set out in S.43 of the FRA.

The President shall, within 90 days from the commencement of this Act and with advice from Minister of

Finance subject to approval of National Assembly, set overall limits for the amounts of consolidated debt of

the Federal, State and Local Governments pursuant to the provisions of items 7 and 50 of Part I of the

Second Schedule to the Constitution and the limits and conditions approved by the National Assembly, shall

be consistent with the rules set in this Act and with the fiscal policy objectives in the Medium-Term Fiscal

Framework.

This provision again reiterates the intention of the legislature for strong

collaboration between the executive and the legislature in the budgeting

process. Again S.42 of the FRA provides that:

42 (1) The framework for debt management during the financial year shall be based on the following rules-

(a) Government at all tiers shall only borrow for capital expenditure and human development, provided that such borrowing shall be on concessional terms with low interest rate and with a reasonably long amortization period subject to the approval of the appropriate legislative body where necessary; and

(c) Government shall ensure that the level of public debt as a proportion

of national income is held at a sustainable level as prescribed by the National Assembly from time to time on the advice of the Minister.

These provisions also show that the spirit of collaboration between the

executive and legislature should dominate engagements in the budgeting

process.

5. THE LIMITS OF LEGISLATIVE POWER IN APPROPRIATIONS

Clearly, S.81 (1) reserves the power of budget preparation to the executive.

But such power left entirely with the executive arm of government has led to

unnecessary friction between the executive and legislative arms of

government since the advent of civil rule in 1999. This may have informed the

collaborative spirit guaranteed in the FRA. The legislature has always altered

(most times an increase) the executive proposals and the President always

refuses to assent to the bills on the grounds that they are substantially

different from the proposals sent. In some years, there has been a legislative

override of the President’s veto leading to the President reluctantly

implementing the budget or leaving many aspects of it unimplemented.

Beyond budget initiation and preparation reserved by the Constitution to the

executive, what is the role of legislature in the budget approval process? The

legislature’s role is usually determined by law, political culture and tradition,

adequacy of time to consider and make inputs into the budget, access to

information and other resources, public opinion, etc. However, the law is the

most influential and important of all these considerations. Examples from

other jurisdictions are instructive for us to review our laws and arrive at a

nuanced conclusion 18

.

The Namibian Constitution in article 126, section 7 requires that the finance

minister submit the annual budget to the legislature, which, in turn is

mandated to “consider such estimates and pass pursuant thereto such

18

These examples are taken from Legislatures and the Budget Process; An International Survey (2003), prepared by the National Democratic Institute for International Affairs with funding from the National Endowment for Democracy.

Appropriation Acts as are in its opinion necessary to meet the financial

requirements of the state from time to time”19

.

The Malawi Constitution effectively prohibits the legislature from considering

any bill or amendment for the imposition of any charge upon the Consolidated

Revenue Fund or any alteration of such charge unless the recommendation

comes from the government. This effectively prohibits amendments to the

finance minister’s budget20

.

The Constitution of Ghana prohibits the imposition of a charge on the

Consolidate Fund of Ghana or the alteration of any such charge otherwise

than by reduction.

The 1996 South African constitution empowers the legislature to offer

amendments to the executive’s budget but the legislature must provide the

procedure to exercise this power under a framework law.

The Polish House of Representatives under the 1997 Constitution has broad

powers to increase or decrease spending and revenues in the executive’s

budget. The only limitation is that the changes may not increase the budget

deficit or decrease the surplus proposed by the executive. The amendments

must contain a corresponding increase in revenues.

In Sweden, the Spring Budget Bill presented on April 15 contains the

government’s proposal for aggregate overall spending and revenues for the

coming year and the following two years. The legislature has powers to

amend this bill without restriction but once passed, the aggregate numbers

become legally binding and the actual budget estimate to be presented on

September 20 to the legislature shall not exceed the aggregate approved.

South Korea’s legislature can reduce spending but must seek the executive’s

approval to increase the budget.

19

Despite this strong legal background, the Namibian legislature has made little or no interventions to the budget approval process. 20

Section 57 of the 1995 Constitution of Malawi.

Inter-Parliamentary Union members’ rights in budgetary matters indicate that

out of a total of 82 surveyed countries, 32 may increase and reduce

expenditure and revenue; 17 may reduce but not increase expenditure; 4 may

reduce expenditure but only increase it with permission of the executive; 13

may increase or reduce expenditure if alternative provisions are made

elsewhere; for 15 countries, the rights were not specified in detail and 1 was

classified in the not applicable category21

.

The United States of America experience leans towards a strong legislative

role and a professional budget office. The contour of the practice is as follows:

The United States Congress crafts a large part of the nation’s budget itself. In

the U.S, legislative-executive branch tensions are purposely embedded in the

process. Committees play a major role in the budget process and

amendments offered by individual members, both majority and opposition, are

commonly offered and adopted by subcommittees and committees, and in the

plenary.

Each February, the President submits his budget proposals. Congress takes

no formal action on it, treating it as advisory. Instead, Congress engages in an

eight-month process of preparing its own budget framework and then

painstakingly considers the minutiae of spending for each government

department and agency. Unlike other parliamentary systems, in the U.S the

second chamber, the Senate plays a co-equal role in determining spending

levels.

House and Senate committees, with advice from the sectoral committees,

agree to a binding spending cap, which is approved by both chambers and

does not require the President’s approval. This overall spending cap is

21

Inter-Parliamentary Union, Comparative Reference Compendium, Volume 2, Chart 38A (1986).

referred to the appropriate committees, which divide it among subject matter

subcommittees22

.

There have been arguments about the powers of the legislature in respect of

the Appropriation bill laid before it. The Constitution however appears a bit

silent on the subject despite the fact that it requires legislative approval for the

withdrawal of monies from the Consolidated Revenue Fund and the

expenditure of public resources. A school of thought holds that the legislature

can reduce but not increase the total amount of the budget because an

increase partakes of the nature of initiation as regards the excess amount

over and above the total figures in the appropriation bill23

. But this school of

thought has not provided answers to situations where the executive miss out

appropriating basic expenditures such as personnel to an MDA or under-

estimating them. Even if the executive omitted or under-estimated this in error;

should the legislature not correct same? Should it merely rubber stamp? This

scenario has come up several times since 1999.

Another school of thought holds the view that the legislature is at liberty to

amend, meaning increasing or reducing the executive’s budget proposals.

Since what is laid before the legislature is a proposal in form of a bill, it is still

subject to express and inherent legislative powers and these powers do not in

any way imply the passage of a bill exactly in the form presented. Also, the

legislature is not expected to be a mere rubber stamp for the requests of the

executive. It is in a position to scrutinise, make inputs, make reasonable

additions and subtractions from the head by head expenditures. But should

this school of thought provide justification for additions and new projects that

have no links with policy priorities? Obviously, the answer is in the negative.

A learned commentator has drawn attention to three issues the legislature

cannot undertake while passing a budget:

22

See page 30 of the Legislatures and the Budget Process; An International Survey (2003), prepared by the National Democratic Institute for International Affairs with funding from the National Endowment for Democracy.

23

B.O. Nwabueze in The President, National Assembly and Right to Initiate Budget, in the Guardian Newspaper of Monday May 22 200. See also MG Yakubu in The Legislature as the Watchdog of Public Funds in I.A Umezulike, (Ed) Towards the Stability of the Third Republic pp 70-71.

Make an outright deletion of some heads of expenditure in the budget;

Make a wholesale transfer of the votes meant for one ministry or

department to another, thereby indirectly abolishing the former;

Introduce brand new expenditure heads or subheads into the budget;

Transfer an executive agency designated in the budget from one

department to another24

.

However, it needs to be stated that there are no decided cases from the Court

of Appeal or Supreme Court on this matter but the above are extrapolations

from learned opinion based on what is considered the prevalent practice in

other similar jurisdictions. There is nothing however of the face of the

constitutional provisions either approving or disapproving of these learned

opinions. But a more realistic and harmonious position is for the executive to

collaborate with the legislature during the budget initiation phase so as to

reduce the areas of friction between the two arms of government. It has also

been recommended that an Inter-Branch Budget Committee involving the

three arms of government would be a far more acceptable arrangement for

the harmonisation of separately initiated appropriation proposals than leaving

it to one branch of government to do the harmonisation alone25

.

6. OTHER OUTSTANDINGS

Executive budget implementation reports are to be submitted to the NASS

under the FRA and NASS wil use the reports to further its oversight on the

allocation and management of public expenditure. Also, audit reports of the

Auditor-General of the Federation and the States go before their respective

legislative Public Accounts Committees for consideration and resolution of

outstanding issues.

24

Justice CC Nwaeze citing with approval B.O Nwabueze, op cit. 25

Report of the Budget System Review Committee, page 40.

7. CONCLUSIONS

The 1999 Constitution as supplemented by the provisions of the FRA

expects a process of evidence led budgeting where the executive and

legislature collaborate on the basis of evidence to craft a budget which

responds to the rights and needs of Nigerians. It admits of no arbitrary

action and assumptions. If legislators have projects (whether constituency

projects or otherwise), they are expected to submit same to the executive

at the stage of the MTSS and call circulars and ensure that they are fed

into the budget as part of the sectoral priorities and where the nominated

projects are not in conformity with sectoral goals, they should be withdrawn

and new ones selected to conform with policy priorities.

Constituency projects are not new in constitutional democracies. The

American system admits of constituency projects. But it’s the abuse or

mismanagement of the projects that raise alarms. The appropriation

process can not be the justification of inserting new projects and

programmes that have not undergone the necessary preparation phases

into the annual budget. Some projects require technical drawings, permits

and studies before they can be ready to go into the budget. Inserting such

projects into the budget at the late appropriation hour will not facilitate

budget implementation. Also, inserting frivolous projects that have no

relationship with official policies or the needs of the people is not the right

way to go. What is required is transparency and honesty of purpose by all

the stakeholders in the executive and legislature for Nigeria’s budgeting

process to respond to the needs of Nigerians.

The implementation phase is clearly the domain of the executive as no

controversy currently exists on that. Monitoring is jointly done by the

executive and legislature. But if the executive legislative feuds on

appropriation continue unabated, the Supreme Court should be given the

opportunity to clarify the position of the law on the subject matter.