2023 Budget: Finance Ministry under fire regarding N424bn in “Padding”

The Ministry of Finance, Budget, and National Planning is under fire over the purported inclusion of N423.8bn worth of projects in the 2023 budget proposals of several ministries, divisions, and agencies (MDAs).

Following claims by a number of government entities that the ministry of finance reportedly put unknown amounts into their budgets without their knowledge, federal parliamentarians have expressed concerns about the budget process’s apparent misuse.

During ongoing National Assembly budget hearings, officials from the National Universities Commission (NUC), Ministry of Defence, Ministry of Power, and Ministry of Humanitarian Affairs renounced some billion-naira line items in their 2023 budget plans.

They informed MPs that they were unable to explain the purpose of the monies or the associated projects because they were not included in the plans submitted to the finance ministry for the 2023 fiscal year. The insertion of the funds into their budgets was attributed to the ministry of finance.

But the finance ministry denied padding up the budget for any agency, saying the proposals as submitted by the ministries, departments and agencies is what President Muhammadu Buhari presented to the National Assembly.

Civil society organisations have urged the National Assembly to be vigilant and ensure that all suspicious budget items are expunged from the fiscal document before it is passed.

Budgeting process

In preparing the federal government budget, all agencies, using the guidelines and budget ceiling, prepare and submit their estimates for the next fiscal year to the Ministry of Finance, Budget, and National Planning.

The ministry, after review, aggregates the budget in the form of consolidated estimates of revenue and expenditure and then sends it to the president for approval.

The president on receipt of the proposal as approved by the budget and planning ministry present the draft estimate to the Federal Executive Council for further consideration and approval after which the draft estimate is sent to the National Assembly in form of an appropriation bill.

The padding allegation

Amid these processes, some line items are said to be inserted into the fiscal estimates without the consent of the supposed beneficiary agencies, resulting in duplication of projects or excess budgetary allocations, with the opportunity for the quiet looting of the public coffers.

In most cases, the agencies concerned are silent about the insertions called budget padding except when they are detected by lawmakers during budget scrutiny.

N12bn inserted in NUC budget

On November 5, 2022, the Executive Secretary of NUC, Professor Abubakar Rashid, told the joint Senate and House Committee on Tertiary Education and TETfund during budget defence, that N12 billion was inserted by the Ministry of Finance into the agency budget.

He said, “In NUC’s budget we have a problem. We had additional money given to us that we didn’t request, but I later went to the Ministry of Finance to find out because our budget was always hovering around N3 billion with about N2 billion for personnel, about N700-N800 million for capital, about N700 million for overhead. But last year, we saw an additional N12 billion given for World Bank projects. The World Bank projects are not processed through this mode.”

N10.8bn found in defence ministry budget

Also on November 17, the Ministry of Defence during a budget hearing organised by the Senate Committee on Defence blamed the finance ministry for the N10.8bn inserted into their budget.

The vice chairman of the committee, Senator Istifanus Gyang, said N8.6bn is discovered to have been allocated for the purchase of military hardware and N2.25bn for Safe School Initiative.

“The two items, when critically viewed, were not supposed to be in the ministry’s budget since hardware procurements are done by the army, navy and air force; and the Safe School Initiative by the Federal Ministry of Education,” he said.

Responding, the Permanent Secretary, Ibrahim Abubakar Kana, said the money was inserted into the ministry’s budget by the Ministry of Finance, Budget and National Planning.

Humanitarian affairs ministry disowns N206bn insertion

The Minister of Humanitarian Affairs, Disaster Management and Social Development, Sadiya Umar Faruk, on November 21, disowned N206 billion inserted into her ministry’s 2023 budget estimates.

Farouq, at a budget defence session with the Senate Committee on Special Duties, said the money was inserted by the Ministry of Finance without her ministry’s consent.

She said her ministry requested funds to execute some projects for the North East Development Commission (NEDC) and the National Social Safety Net Project in the 2022 budget.

She expressed surprise that the money, which was not released in 2022, was inflated in the 2023 budget of the ministry.

N195bn for bilateral, multilateral projects in power ministry budget

On November 1, the Senate Committee on Power also discovered N195bn earmarked as counterpart funding for bilateral and multilateral projects in the ministry of power’s 2023 budget proposal. The chairman of the committee, Senator Gabriel Suswam, in an interview, said his panel, after interfacing with the officials of the ministry during the budget defence session, found out that even the ministry was not aware of the projects.

Suswam said budgetary allocations for such projects are being made every year but they are never seen, and that the power ministry could not explain how the money is expended.

Lawmakers angry

Senators and House of Representatives members said the revelations by heads of agencies, blaming the finance ministry for unknown line items in their budget estimates vindicated members of the National Assembly who are mostly being accused of budget padding.

They said the situation is worrisome, especially at a time the country requires fiscal discipline in the face of falling revenue and increasing deficits.

Speaking on his committee’s budget hearings with the Ministry of Power, Senator Suswam said it was unfortunate that monies are being allocated as counterpart funding for the implementation of bilateral projects, which are not in existence.

Suswam said his committee would summon the finance minister for explanations on the projects and how the yearly allocations are being expended.

Also, Senator Elisha Abbo, while reacting to the humanitarian affairs minister’s submission disowning the N206 billion inserted in her ministry’s budget, said the government could not continue to borrow money and plunge the country into debt.

He said, “This is serious. We cannot continue to borrow money and plunge this country into debt for our children to come and pay without investing in what they will see.” The Senate Committee on Special Duties resolved to summon the finance minister to explain the N206 billion tucked in the ministry’s budget.

Senator Yusuf A. Yusuf, who chairs the committee said, “I want to move a motion that the minister of finance should appear before this committee to furnish this committee with details of what they intend to do with N206 billion in 2023 budget.

“Now that the minister has said that she is not in charge of negotiation with the World Bank and of course she is not, the minister of finance must appear before us and explain what the huge amount is meant for”.

Speaking on the N10.8 billion tucked in the defence ministry’s 2023 budget, Senator Aliyu Wamakko, who chairs the Defence Committee of the Senate, said the insertion would be expunged.

Finance ministry denies padding

Contacted, Yunusa Tanko Abdullahi, Special Adviser, Media & Communications to the finance minister, said the budget as submitted by the ministries, departments and agencies was the budget that President Buhari presented to the National Assembly.

“Please refer to the bill submitted to the National Assembly by President Muhammadu Buhari if these figures or projects were captured. If yes, it is what their ministry submitted but if not, then you can revert to the ministry for further clarification,” he said.

It’s a ploy to divert taxpayers’ funds — Rafsanjani

The Executive Director, Civil Society Legislative Advocacy Centre (CISLAC), Auwal Musa Rafsanjani, described the development as a plot to divert taxpayers’ funds.

He said the National Assembly must be vigilant to ensure all suspicious budget items are expunged from the budget document before it is passed.

“First and foremost, the National Assembly has the duty and responsibility to expunge budget line items that are dubious and suspicious. That is why they are to analyse and review the budget. It is only when the National Assembly has done its due diligence that you can say that you have a budget.

“This revelation is of great concern to us. I think the National Assembly should subject the budget to a public hearing; it is only during a public hearing that people can also question the insertion of some budget line items that are aimed at improving the lives of Nigerians.

“We are hoping the National Assembly will give Nigerians the opportunity to scrutinise the budget submitted by the executive. We urge the National Assembly to take the necessary actions to review the proposal so that Nigerians can see that the National Assembly is working in the interest of the people

“It is all part of the corruption that we have been talking about. People are hiding under the cover of budget line items to siphon public funds. I urge the stakeholders to check out the budget line items that are meant to divert taxpayers’ money and speak out,” he said.

It’s being investigated – Malami

Responding to the various allegations, the federal government on Wednesday expressed concern over the development.

The Attorney General of the Federation and Minister of Justice, Abubakar Malami, stated this while briefing State House reporters after the Federal Executive Council (FEC) meeting presided over by the president at the Presidential Villa, Abuja. Reacting to a question, Malami stated that the federal government was studying the revelations and promised that every necessary measure would be explored to address it.

“Whichever way one looks at it, budget padding is bad, because if you budget N5 billion for road and N3 billion of that fund is diverted, it means the government has lost that money and it will take a longer period to complete the project

“The government is concerned and will do what is necessary to address the issue,” he said

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