The 2020 budget recently signed into law by Governor Abdulrahman Abdulrazaq has been a subject of heavy controversy in the state after a civil group in an attempt to deepen the discuss picked huge holes in the document despite the assurances from the Kwara State Government that due diligence was carried out in collaboration with the State House of Assembly before it was signed. Head Politics, Mumini AbdulKareem further interrogate the issue.
It began like a mere observation carried out by what some apologists of the government described as a busy body civil organisation when Brain Builders International (BBI) that prides itself as a non-governmental organization charged with the mandate of ensuring public transparency and accountability in governance in Kwara State, interrogated the budget. It intervention has thrown up many questions about the transparency, accountability, sincerity and competency of the Kwara State government in the passage of the 2020 budget.
Tagged budget of hope to drive hope and fight poverty by the government, the document initially received some sticks from stakeholders and labour leaders alike who raised observations that it did not incorporate or reflect the minimum wage estimates.
But shortly after the signing of the document and the availability of the over 300 pages document online, questions began to be asked on some line items about the budget. It was however the report of the BBI that have attracted the most comment and appeared to have put the government on the defensive of a document that was initially praised as one of the best thing to have happened to Kwara State in recent times.
According to the BBI in its first report on the appropriation bill tagged “Is Kwara 2020 budget really that of hope” and signed by its Executive Director, Olasupo Abideen, the group noted among others that the budget contained some “obscure line items which could be difficult for interested individuals or advocacy groups to track due to lack of details”.
“For instance, the item line of N1.6bn under the House of Assembly was not explained and we raised objection to it during the budget defence but unfortunately, our concern wasn’t addressed by the legislators before approving the budget. Also, a whooping sum of N1.2billion was budgeted for the purchase of vehicles for all political office holders. While we believe that officeholders are entitled to official cars, we however, hold that this amount is outrageous and uncalled for, considering the current financial status of the State”.
BBI noted that a government complaining of paucity of funds should not be caught allocating such huge amount of funds to purchase of cars adding that such fund could be channeled to more meaningful projects that will better the lives of the citizenry such as building healthcare centres in different parts of the State.
“We acknowledge the reduction of the budget for the Ministry of Energy from N401million to N300m by the Assembly, with a claim that the Ministry will be responsible for the electricity bills of other MDAs. But surprisingly, in the same budget, funds were also allocated for some MDAs to cater for their electricity bills. This definitely raises some concerns. Meanwhile, we commend the House for reducing the allocation for fueling of Government House vehicles, plant and generator from proposed N220million to N190million. We, however, hold that this amount is still on the high. N190m for fuelling is rather too high. Also, the budget of Harmony Holdings was increased from the proposed N100m to 200m by the House, without any concrete explanation for the 100 per cent raise of the Holdings budget. We also believe that budgetary allocation to Harmony Holdings should be treated as a loan facility as the organization is run as a private entity. And there is also no available record that the Holdings is remitting any money into the state coffers. We believe that these funds (N100m) could have been injected into sectors that will improve the state economy.
“On page 35 of the approved budget, we observed that the sum of N250m was budgeted for ‘Honorarium and Sitting Allowance’ and domiciled under the Governor’s Office budget. One is left to wonder who will be collecting money for honorarium and sitting allowance inside Government House. Do we now have another Assembly inside the Government House? Similarly, on page 38 of the approved budget, we noted that a huge sum of N360m was budgeted for ‘external auditor consulting’. This is way higher than allocation to some agencies like the Kwara Primary Healthcare Development Agency.
It is also observed that the Appropriation Law is missing a key reference number as appropriate in Law. It should have been tagged ‘Law No. 1 of 2020’, and we feel that the omission may invalidate the law in reference. The proper tagging is pertinent for easy reference of the law, non-duplicity of the law with different contents but the same citation, and for quality legislative process, among others.
Finally, the governor said he has saved the sum of N7bn which was included in the budget proposal. However, during the KwaraTracka program, the Governor said the figure was N8bn. This change was not effected or included in the approved budget. We also observed that a projected sum of N5bn from the Federal Government under the Ecological and Stabilisation Fund was included in the capital receipt; a fund which is not feasible. If this fund does not come, how will the government source for alternative”, the report noted.
BBI said it hopes “the state government does better in subsequent budgeting processes and fill these obvious gaps and recommend that “The principles of budgeting should be applied by giving adequate appropriation to top government priorities, proper market surveys are critical to keeping tabs on economic indicators and should be fully utilized during budget preparation, revenue projections should be feasible and based on reasonable performance level, MDAs should be monitored to ensure coordination and cooperation in projecting expenditures, the government should ensure that all relevant data are available for the preparation of the budget and every ministry must submit their audited report as and when due.
Expected, the government rejected the intervention of BBI and even went ahead to accused BBI of exhibiting opposition traits.
In a rejoinder signed by the Press Secretary of Ministry of Finance and Planning, Saad Hamdalat Temitope, the government said the BBI report “failed the basic test of ‘ask if in doubt’.
“Now, contrary to its needless innuendoes, there was nothing obscure or extravagant in the budget. The group talked about N1.2bn budget for purchase of vehicles for political office holders alone. This again points up the danger in one-sided narrative which could have been avoided had the group asked the House of Assembly or the executive about it. For the record, the total amount budgeted for purchase of motor vehicles (as captured on page 38 in code numbers 23010105/23010106) is N655,000,000. We really don’t know where the group got its own figures!
“Firstly, vehicles purchased for political office holders are not gifts. Such vehicles are meant to ease their work. What is more, any public office holders who get official vehicles will pay for same as dictated by the monetisation policy. In other words, the money will come back to the treasury. Secondly, the government is making heavy investments on security this year. To that extent, government will purchase (patrol) vehicles to strengthen security and protect lives and properties across the state. This is covered in the same amount. Thirdly, the money covers purchase of vehicles for principal officers and members of the Kwara State House of Assembly. Like members of the state executive council, the lawmakers have been using their personal vehicles to perform official duties. Also, whatever amount used to buy vehicles for the lawmakers will be deducted from their salary in line with the monetisation policy. The government recently purchased 27 vehicles for the civil service. This, of course, is like a drop in the ocean for a civil service that was until this administration starved of decent working conditions. So, part of the money will go into purchasing more vehicles for the civil service. Many of the vehicles in the Government House are in bad shape and are to be replaced in the fiscal year.
The N1.6bn item line in the House of Assembly budget is meant to pay the salaries and allowances for the House of Assembly staff, expenses on committee assignments and oversight functions that include public hearings and daily running of the House affairs. While the administration understands the need to be modest, it is convinced that budgeting for 620,689 litres of petrol and 45,454 litres of diesel (both adding up to N190m) to power government vehicles, plants and generators for a whole year is within the bound of decency anywhere in this country. The group also questioned the allocation of N360m for audit. In what seems like an attempt to incite the public against the government, it went ahead to say that the money for auditing is far higher than what was allocated to primary health care. The insinuation is noted and frowned at because it was made without any basis… The comparison of the budgeted sum with the allocation for primary healthcare was baseless because hundreds of millions of naira are budgeted for primary healthcare. The bulk of such allocations is the counterpart funding for polio, AIDS, malaria, maternal healthcare, nutrition, which is warehoused in the Ministry of Finance and Planning. It is also submitted that millions of naira are budgeted for repairs of primary healthcare centres as reflected in the budget of the Ministry of Health. The group also questioned the allocation of N200m to Harmony Holdings. Again, merely asking questions from the House of Assembly or management of the firm would have cleared the air… The money allocated to it in the budget was therefore to recapitalise the company to achieve its set objectives. Perhaps it is right to mention here that AMCON has sued Harmony Holdings on account of huge debts, currently over N1bn, into which the past management has plunged it… Among other things which basically arose as a result of not asking basic questions, the group talked about the Ecological and Stabilisation Fund. It was in fact one of the funniest things seen in the report because budget is not a static document. It is an estimate which is subject to developments and reviews from time to time. Government reasonably expects to fund budget from various revenue sources, which are not cast in iron. For instance, the budget had been predicated on $57 per barrel of crude oil. Today, the price of crude oil has fallen to $54! So, there is nothing strange to make reasonable estimate as the government did with the Ecological Fund. Finally, the N250m ‘honorarium’ in the budget is strictly meant to offset the severance package of cabinet members and statutory commissioners who served the state between 2011 and 2019. It is what the law (see Revenue Mobilisation and Fiscal Allocation Commission provisions) allows them to take for serving the public. This administration, led by a statesman, is concerned only about governance and giving to anyone whatever that is reasonably due to them. The amount budgeted was actually higher than the N250m but the House of Assembly in its wisdom felt that is all we could afford in the 2020 fiscal year”, the government added.
But BBI in its defence to the government picked “more bogus claims” regarding the documents with another set of questionable provisions.
“We received a rejoinder to our report on the 2020 Kwara State budget through the Office of the Press Secretary, Ministry of Finance and Planning, Kwara State. We appreciate the government for their response to our report and wish to respond to some of the claims and rebuttals made in the rejoinder.
“In the rejoinder, the State government claimed that the amount budgeted for purchase of vehicles for office holders is N655m as against the N1.2b mentioned in our report. This is false and we believe the government was only being economical with the truth. “A cursory check will reveal that allocation for the purchase of motor vehicles and buses for the State Assembly was pegged at N522m and N204m respectively. While under the budget for Governor’s Office, N150m was budgeted for the purchase of motor vehicles, N555m for vans, and another N50m for buses. When this is summed up, you have: N1.481bn, which is even above N1.2b. The State government also claimed that the N1.6b allocated for the State Assembly is to cater for expenses on House committee assignments, oversight functions and payment of salaries and allowances of members and staff of the Assembly, some of whom are civil servants who are under the payroll of the State government. And surprisingly, under the same House of Assembly budget, there is another allocation of N95.6m tagged as Personnel Cost for staff of the Assembly. Can the State government and the Assembly explain to us the difference between the personnel cost and payment of salaries of staff of the Assembly?
“It is worthy to note that the State government recently approved N2.1b for the renovation of 31 schools across the State. How wonderful would it have been if a part of the huge budgetary allocation to the Assembly could be channeled towards the renovation of additional schools in the State.
“On our concern about the huge funds allocated to fuelling of Government House vehicles and generators, “How did the State government arrive at this calculation and conclusion? The government official(s) who did the calculation has/have only exposed their poor knowledge of Mathematics or could it be an attempt by the government to cover up its flaw. As at today, a litre of petrol is sold for N145 while a litre of diesel goes for N240. Therefore 640,689 litres of petrol at the rate of N145 is N89, 999, 905. 45, 454 litres of diesel at the rate of N240 is N10, 908, 960. If you add N89,999,905 and N10,908,960, we have N100,908,865. Where did the government put the other 90Million? It should also be noted that another N60m was budgeted for maintenance of plants and generator.
“In line 0140001 of the budget, the sum of N22.5m and another N168m, totaling N190.5m was budgeted for the State Audit Department. Considering the huge amount already budgeted for the State Audit Department, one is left to wonder the need for allocation of another N360m for external auditing. That means by the end of the year, Kwara would have expended over half a billion naira on auditing.
“We strongly believe that the rejoinder raises more questions than providing answers to the inconsistencies raised in our report. For instance, the explanation of the government on the N200m budgetary provision for Harmony Holdings isn’t convincing enough. Why should the government recapitalize the Holdings that is being run as a private business entity and where the government is just a shareholder? Also, the N4.5bn allocated to KWIRS for financial consulting appears obscure. It is imperative that the government state what it means by financial consulting. Is it to hire consultants or prepare annual financial statement of account? Our Opinion on the Ecological and Stabilisation fund was based on perceived government’s over ambitiousness in Capital receipt. Taking into consideration the request of other states and trends of benefits from the account by Kwara State in recent times, it is unlikely we get the fund this time. Recall that Kwara got in 2016, 2017 and 2018 while many states are still struggling to access it. Alternatively, we could have encouraged our National Assembly members to lobby those ecological financed intending projects into the FG capital projects for clear feasibility. Note that stabilization and ecological fund formed part of the capital receipt and most time, it constitutes the greater risk for the less performance of the budget. In our report, we also raised concern about the N250m allocation for ‘honorarium and sitting allowance’ in the budget. We demanded to know what the allocation is meant for and who the beneficiaries are. We are glad that the government has clarified that the fund is to pay severance package of past government officials as provided for by the law. But why lumping the allocation for the severance package under honorarium and sitting allowance when you could have tagged it what it is ‘Severance Package’ for ex-government officials. We are as well shocked to notice that a huge 200Million was budgeted for Maintenance of Office Building and Residential Quarters. This is outrageous. We also observed that the government failed to react to our observation on the discrepancy on the amount that has been saved by the present administration as disclosed by Governor Abdulrahman Abdulrazaq. The governor initially said his government had saved the sum of N7bn which was included in the budget proposal. However, during the Kwara Development Trackers programme, the Governor said the figure was N8bn. But the figure we have in the approved budget is N7b. What happened to the N1b difference? Or was the Assembly not informed of this development by the Governor”, BBI queried.
For now, the government appeared to have been bossed to the corner by BBI over its claims on the budget, how it will argue it out remain to be seen. But BBI has really deepened the discussion and other Kwara based civil organisations should come to the party to deepen good governance in Kwara State just like EnetSud is doing. Opposition parties and PDP especially need to do more than they are presently doing.
