Tuesday, 3 December 2019

Olimpotic Meristemasis: Gov Ben Ayade may've Violated the Fiscal Responsibility Act 2007


Editorial|3 December 2019 

The most important subject this opinion piece wishes to address is Why is C/River's Appropriation Bill for 2020 fiscal year not situated within a Medium Term Expenditure Framework MTEF?

Cross River State governor, Sir Ben Ayade, Thursday 21st November, presented an appropriation bill of one trillion, one hundred billion, one hundred and sixty seven million, five hundred and seven thousand naira, nine kobo, for the 2020 fiscal year to the 9th Cross River State House of Assembly.

Tagged 'Budget of Olimpotic Meristemasis' it has a capital expenditure of N911 billion representing 82.8 percent of the budget and a recurrent expenditure of N188 billion, representing 17.2 percent of the budget.
On the sectoral breakdown as captured by the appropriation bill, Ayade disclosed that the health sector will gulp N44 billion, education N38 billion, new city development N35 billion while agriculture will get N22 billion and social housing to gulp N12 billion, among others.

In 2011, under the administration of Sen. Liyel Imoke as governor of the state(2007 - 2015), Cross River domesticated the Fiscal Responsibility Act 2007 which allows for the preparation of a Medium Term Expenditure Framework MTEF. 

According to GRIPS Development Forum, the 'MTEF is annual, rolling three year-expenditure planning. It sets out the medium-term expenditure priorities and hard budget constraints against which sector plans can be developed and refined. MTEF also contains outcome criteria for the purpose of performance monitoring. MTEF together with the annual Budget Framework Paper provides the basis for annual budget planning'. 

According to Section 11(3)a ) of the Fiscal Responsibility Act, 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'. It also looks out for a Fiscal Strategy Paper, an expenditure and revenue framework, aggregate tax expenditure floor for the state for each financial year in the next three financial years the MTEF covers. 

All these about the framework are expected to be so laid before the State House of Assembly for their consideration and approval with such 
modifications, if any, as the Assembly may find appropriate through a resolution. 

My findings have it that the CRSG didn't prepare a MTEF. The question therefore is, why was there no MTEF laid before the CRSHA as led by Rt. Hon. Eteng Jonah Williams? If there was no MTEF, against what macro-economic projections, assumptions, and priorities was the 2020 Budget of Olympotic Meristemasis pegged at 1.1trillion Naira prepared?

For instance, whereas the Fiscal Strategy Paper (a component of the MTEF) contains the financial objectives, the policies of the State Government for the medium term relating to taxation, recurrent (non-debt) expenditure, debt expenditure, capital expenditure, borrowings and other liabilities, lending and investment, as well as the strategic economic, social and developmental priorities of the State Government for the next three financial years, and whereas this MTEF was supposed to have been laid before the CRSHA, how will the 25-member state legislature appraise the 2020 appropriation bill for consent? Against what financial objectives, policies of government and priorities will they peruse through the appropriation bill? 

His Excellency the Executive Governor of Cross River State and the Right Honourable Speaker including his legislature should address themselves to these inquiries, please. These and many more constitute what I think Nigerians indigenous to and resident in Cross River should preoccupy themselves with, and not with the highfalutin expression called 'Olimpotic Meristemasis'. 



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