Examining the envelope budgeting system

Supreme Desk
22 Nov 2022 10:31 AM GMT
Examining the envelope budgeting system
According to experts envelop budgeting entails assigning every spending category in a budget to envelops with each envelop allocated a fix amount of money which cannot be transferred to another envelop.

When the House of Representatives suspended plenary on October 12 to allow various committees to attend to Ministries, Departments, and Agencies (MDAs) in defense of their 2023 budget proposal, not a few lawmakers were excited about the exercise.

President Muhammadu Buhari had on Oct. 7 before the joint session of the national assembly presented N20.51 trillion 2023 appropriation.

Some committee chairmen saw the yearly budget defense appearance by MDAs as an annual ritual when each segment of the budget already has funds allocated to it under the envelope budgeting system.

According to experts, envelope budgeting entails assigning every spending category in a budget to envelopes, with each envelope allocated a fixed amount of money that cannot be transferred to another envelope.

At the resumption of plenary, Speaker of the House of Representatives, Rep. Femi Gbajabiamila, said the committees of the House are working on the 2023 budget appropriations bill to ensure that the final budget serves the needs of Nigerians.

He said legislators were also working to ensure that, in line with the reforms of the 9th Assembly, the lawmakers would have a final bill ready for presidential assent before the end of the year.

According to him, it is not an easy task to deliver an implementable budget at a time of significant financial limitations.

However, commenting on the 2023 budget proposal, Rep. Patrick Asadu, a member representing the Nsuka/Igbo-Eze South Federal Constituency of Enugu State, said the lawmakers needed to review their budget debate mechanisms.

Asadu, who is the Chairman, House Committee on National Inland Waterways (NIWA) said he was particularly worried after engagement with NIWA authorities on its 2023 budget proposal。

"I noticed that we do not budget for what we need but rather for what our forefathers needed." We spend money where it is not needed and don't spend money where it is needed.

"We know what floods did to Nigerians a few months ago, and as we look into the budget, there's no provision to address the occurrence of such natural disasters," he said.

According to him, what it means is that states that were taken over by flooding will be taken over by more flooding because the country is doing nothing to address the problem.

According to him, the budget envelope system Nigeria is adopting does not make provisions for emergencies.

"We have seen budgets where they will say, "This is for capital; we should not touch it," when you are capturing what was captured 15–20 years ago.

Also, the House of Reps Committee on Public Procurement rejected N58 million capital allocation in the 2023 budget proposal for the Bureau of Public Procurement (BPP)。

Led by its chairman, Rep. Nassir Ahmed, the Committee rejected the budget proposal when Mr. Mamman Ahmadu, Director General, BPP, appeared before it to defend the budget proposal.

"This amount is too little to run an agency; even if you are working with the envelope system, the onus is on you to make a case for more money."

"So if you do not make that case and bring it before the committee, no one is going to do that for you." You cannot run an agency with N58 million; it's too small. You must make a strong case.

"Your agency is very relevant to the growth of this country. "If you get your procurement right, there will be less cost and you will get the best hands to do the job," he said.

The chairman of the committee faulted the reduction of the capital expenditure from N94 million to N58 million, saying, "I don't understand why an important agency like BPP will be allocated N58 million."

"We must sit with the Senate committee to see how the budget can be increased; we should look at this as a committee," Ahmed said.

Notwithstanding the current insecurity in the country, the 2023 police budget proposal was slashed from N889, 681, 595, and 517.74 to N796, 785, 034, and 379.

The slash was largely blamed on the envelope budgeting system.

The Police decried the reduction stressing that it portends danger for the operations of the law enforcement agency.

Some lawmakers argue that they should be given the liberty to perform their constitutional roles of allocating funds to MDAs based on their needs rather than making them `robber stamps" under the envelop budgeting system.

By Femi Ogunshola

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