By PRISCILLA NNAKA
Saturday, December 18, 2010
The pronouncement by the Central Bank of Nigeria Governor, Sanusi Lamido Sanusi, to the effect that the country allocated 25 percent of its total overhead costs to the National Assembly in 2010 made headlines in the media. The CBN governor made the statement at the Eighth convocation lecture of the Igbinedion University, Okada, Edo State, where he was guest lecturer, on November 26, 2010.
The two chambers of the National Assembly responded to Sanusi’s claims by conducting public hearings on the matter. Four committees of the Senate held a public hearing on Wednesday, December 1, while the House of Representatives held its own hearing on December 7. At the Senate hearing, the CBN governor made a 17-slide presentation justifying his statement that 25 percent of government’s total overhead in 2010 was taken up by the National Assembly. He repeated his Senate presentation during the public hearing conducted by the House of Representatives.
However, at the House of Representatives’ public hearing, the CBN governor was given some posers. First, he was asked if is it possible that there are other reasons other than the amount spent in maintaining the National Assembly for the sorry state of the economy. This question came about because Sanusi had said, at the lecture, that the sorry state of the economy was due, largely, to government spending more on recurrent expenditure and less on capital expenditure. He said that government was borrowing for consumption instead of investment in physical infrastructure. This trend, he said, was bound to cause inflation.
The CBN governor said that experience over the years had shown that successive governments placed more emphasis on overhead expenditure, which caused persistent rising recurrent expenditure far and above capital expenditure each year.
Sanusi had said that recurrent expenditure is not properly utilised. In his response to one of the posers raised at the House public hearing, he said: “We appropriate capital expenditure but unable to spend it. Why? At the same time we are able to spend recurrent expenditure 100%.”
The question the CBN governor answered here is that the capital budget is not properly utilised. Funds are given to government’s ministries, departments and agencies (MDAs) to execute capital projects but at the end of the year unspent funds are returned to the government’s coffers. In 2007, N450 billion was returned to the treasury as unspent funds. This was huge and unprecedented in the history of appropriation. In 2008, about N350 billion was returned by MDAs. This discovery led to such questions: ‘What happened to the unspent funds of previous years and where are they?…
Copyright, Blaise APLOGAN, 2010,© Bienvenu sur Babilown
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