AN ASSESSMENT OF THE LEGAL FRAMEWORK OF THE ROLE OF LEGISLATURE IN NIGERIA’S BUDGET PROCESS
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- NGN 3000
Background to the Study
Government budget refers to a country’s financial plan encompassing revenue and expenditure over a period of one year. It therefore, provides important government revenue sources and items on which such revenues would be spent within a specific period, usually one year. This entails that budget outlines government policies, strategies and fiscal implications of public programs over the financial year while simultaneously setting aside resources necessary for executing such projects, policies and/or programmes captured in the budget (Kipkirui, 2009). Thus, government budget encompasses government’s priorities on the diverse developmental needs of a country and course of action to address them. However, any government budget that is not properly and carefully prepared in substantial detail engenders inefficient and wasteful expenditure as outcome. Budget either encourages or discourages corruption depending on how well or otherwise the process that produced it is. Government budget is an essential instrument for achieving three significant policy objectives (Renzio 2004; Schick, 2001; World Bank, 2002). These significant policy objectives include – fiscal discipline, allocation efficiency and operational efficiency in governance and use of public resources.
Across the world, parliaments play very fundamental role in determining the annual budget and in ensuring effective oversight of the budgetary (Lienert, 2013). Legislators as elected peoples’ representatives adopt various budget strategies and policies when fiscal policies and medium-term budgetary objectives are debated in parliament and annual budget laws are adopted by the parliament. Therefore, if the legislature is bypassed or is inactive in budget decision making, fiscal policies are decided by politicians on the advice of unelected officials or appointees of government.
However, this is an aberration under a democratic setting where there is separation of powers as well as checks and balances (Fajingbesi, 2016). This is because, in the absence of strong accountability arrangements on the government, there is a risk that budgetary policies reflect the wishes of those in the executive arm of government which may be in contrast to the yearnings of the people. Therefore, it is an essential part of democracy for the legislature to be actively involved in the budget process.
Generally speaking, legislatures play three types of roles in the budget process: budget making, budget influencing, and budget approving. The legislature has played a more active role in budget process in the past three decades following the high wave of democracy as the most accepted type of government (Posner & Park 2007; Schick 2001). Lienert, (2013), stated that the impact of the legislature on the budget and fiscal policy outcomes is minimal because they have less control on such policies after approval. He maintained that in deciding fiscal policies, legislators usually have a short-range perspective as legislators’ interests are more often concentrated on maximizing electorates’ interest on budget spending. Given the limited resources that is always at the disposal of government, there is usually the permutation of who gets what, when and how especially during the budget approval stage. In most democracies, parliament has unfettered power to alter budgetary estimates and can effect changes by either increasing or reducing spending and/or revenues (Fajingbesi, 2016).
Parliamentary budgetary decisions making process is subject to several intervening political factors. Some these factors include but not limited to the role and number of political parties; political party cohesion; the composition of legislatures (unicameral or bicameral); existing consensus mechanism within the legislature; the re-election incentives of members of parliament; etc. (Lienert, 2013).
The budgetary powers of legislatures are highly variable and give the budget process a direction (Lienert 2005; Wehner 2010). This reflects very different constitutional arrangements, legal constraints on parliaments, political factors and budgetary traditions. According to the Organization for Economic Co-operation and Development (OECD), the legislature’s budget powers are highest where the separation between legislative and executive powers is strongest, notably in presidential systems. However, there is not a one-to-one relationship between the form of government (parliamentary versus presidential) and budgetary powers. Evidence has shown that parliamentary budgetary powers are particularly strong when political separation is accompanied by unlimited budget amendment authority by parliament (Lienert, 2013).
In Nigeria, the 1999 Constitution of the Federal Republic of Nigeria (as altered) gives power of the purse to the legislature (National & State Assemblies). This entails that the nation’s annual or supplementary budget embodying projections of government revenue sources and expenditure must receive the approval of the National Assembly at the federal level and state houses of assembly at the state level. This study therefore, seeks to examine the role of the legislature in the budget process or circle in Nigeria with a special focus on the effectiveness the National Assembly.
Statement of the Problem
The budget is the most crucial instrument for economic management as it is the vehicle for achieving government’s public policy goals. In Nigeria, Sections 80-84 of the Constitution of the Federal Republic of Nigeria, 1999 provide that no money can be spent or generated by the Federal Republic of Nigeria without the approval of the National Assembly. This is to say that the 1999 Constitution and Fiscal Responsibility Act 2007 provide for no limitations on the National Assembly’s power to amend the annual Appropriations Bill. Basically, the National Assembly is empowered by several legal frameworks to alter, amend or adjust the draft budget thereby giving it power to increase or reduce projected revenue or total expenditure with a few to achieving balanced budget where expenditure does not outweighs revenue.
Section 80(4) of the 1999 Constitution precisely provides that ‘No money shall be withdrawn from the Consolidated Revenue Fund or any other public fund of the Federation, except in the manner prescribed by the National Assembly.’ While Section 81(1) states the timeframe open for the executive to submit the budget proposal to the National Assembly for consideration. It explicitly states that: ‘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.’
Similarly, the 1999 Constitution in Sections 80–84 confers ‘appropriation powers’ on the National Assembly and its responsibilities over the national purse. The Fiscal Responsibilities Act 2017 confers on the nation’s national parliament the formulation and planning powers in Section 18, where the Act unambiguously stated that the Medium Term Expenditure Framework (MTEF) should be the basis for preparing the estimates of revenue and expenditure in the national budget per annum. Thus, the two Chambers of the National Assembly are required by law to pass the same version of the budget (or MTEF) for it to qualify for presidential assent and legal instrument. However, when there are variations in the version passed by the two houses of the National Assembly, the Conference Committee for harmonization and concurrence is constituted and mandated to harmonize the two versions to produce one clean copy. Thus, the 1999 Constitution specifies the roles and responsibilities regarding the submission, adoption and approval of the Appropriations Bill. The 1999 Constitution also provides that, upon passage of the Appropriations
Bill, the National Assembly should send the bill to the president for assent within 30 days, failing which the National Assembly may veto the bill. Section 82 of the 1999 Constitution authorizes spending from the Consolidated Revenue Fund for up to six months in the New Year, pending the passage of the Appropriations Bill.
The budget process is a very important governance issue which has very negative effects on administration when not properly managed. The nation’s national budget circle has not been disrupted despite conflictual legislature- executive relations experienced under Chief Olusegun Obansanjo (who had 5 senate presidents and 3 speakers in 8 years) and Dr. Goodluck Jonathan (the Rt. Hon. Aminu Waziri Tambuwal as speaker) regimes as well as Muhammad Buhari’s first term when Sen. Bukola Saraki and Rt. Hon. Yakubu Dogara were elected President of Senate and Speaker of House of Representative respectively against the will of the President. However, the time for laying the budget continually changed, yet the circle remained unbroken. Thus this study seeks to examine the legal framework of the role of legislature in Nigeria’s budget process.
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