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Cablegate: Nigeria: Legislature Passes Usd 2.038 Billion

This record is a partial extract of the original cable. The full text of the original cable is not available.

091112Z Dec 03

UNCLAS SECTION 01 OF 02 ABUJA 002086

SIPDIS


E.O. 12958: N/A
TAGS: EFIN ENRG ETRD NI
SUBJECT: NIGERIA: LEGISLATURE PASSES USD 2.038 BILLION
SUPPLEMENTARY BUDGET


1. (U) Summary: On Tuesday, December 2, 2003 the House of
Representatives (lower legislative chamber) toed the line of
the Senate (upper legislative chamber) by approving the
supplementary budget of USD 2.038 billion (Naira 269 billion
at USD 1=Naira 132). The Senate had earlier passed the budget
on Wednesday, November 19. The approved supplementary budget
contained amendments to President Obasanjo's earlier
submission of USD 2.112 billion (Naira 278.863 billion). End
Summary.


Supplementary Budget Proposal Highlights
-----------------------------------------


2. (U) On Thursday, October 9, President Obasanjo presented a
supplementary budget of USD 2.112 billion to the National
Assembly. The budget comprised USD 731 million or 34.6
percent (Naira 96.575 billion) for recurrent expenditures,
USD 631 million or 30 percent (Naira 83.287 billion) for
capital expenditures, and USD 750 million or 35.4 percent
(Naira 99 billion) for domestic debt service.


3. (U) A breakdown of the budget showed that for recurrent
expenditures, USD 76.7 million (Naira 10.127 billion) was for
the Office of the National Security Advisor; USD 87.88
million (Naira 11.6 billion) for military pensions; USD
37.878 million (Naira 5 billion) for the promised public
service wage increase; USD 97.72 million (Naira 12.9 billion)
for payment of electricity and telephone bills incurred by
government ministries and agencies; USD 56.8 million (Naira
7.5 billion) for civil service pensions; and USD 64.39
million (Naira 8.5 billion) for monetization of
benefits-in-kind to senior civil servants.


4. (U) A further breakdown of the capital expenditure account
showed that USD 189.39 million (Naira 25 billion) was for
building two additional power stations; USD 56.06 million
(Naira 7.4 billion) for roads and bridges; USD 75.75 million
(Naira 10 billion) for debt owed local contractors on capital
projects; and USD 144.65 million (Naira 19.09 billion) to the
Ministry of the Federal Capital Territory for infrastructure,
and renovation of the international airport and completion of
the Abuja Sofitel Hotel in preparation for the early December
Commonwealth Heads of Government Meeting (CHOGM).


Highlights of the National Assembly Budget
------------------------------------------


5. (U) The supplementary budget approved by the legislature
was USD 74.56 million short of the President's USD 2.112
billion submission. The National Assembly approved recurrent
expenditures of USD 614.27 million, capital expenditures of
USD 673.75 million, and USD 750 million for domestic debt
service. NEPA capital projects were reduced by USD 75.75
million, while the allocation for electricity and telephone
bills was cut by USD 37.878 million; by contrast, a USD 30.3
million more than expected was set aside for the police.


ANPP Walkout
------------


6. (U) The debate over the supplementary budget was highly
contentious, and members of the leading opposition All
Nigeria Peoples Party (ANPP) staged a walkout to protest what
it called a "deliberate act of illegality". Members of the
ruling party Peoples Democratic Party (PDP), then passed the
supplementary budget, even though they raised and lowered
specific figures and reduced the overall supplementary
somewhat.


7. (U) ANPP leader Dr. Ahmed Salik claimed to the press that
the supplementary budget was illegal and amounted to
duplication of monies earlier allocated in the original 2003
budget. For example, Salik said, the USD 75.75 million for
the office of the National Security Advisor (NSA) had already
been provided in the original 2003 budget. He asked why a
new allocation of the same amount is being provided to the
same office when an explanation had not been given on how the
initial allocation was spent.


Explanation by Suswan
---------------------


8. (U) The Appropriation Committee Chairman of the House of
Representatives, Honorable Gabriel Suswan, also held a press
briefing after the plenary session to clarify the approved
supplementary budget. According to Suswan, most of the
monies had already been expended on projects that were not
provided for in the 2003 budget. Suswan also confirmed that
members of the ANPP made inputs to the Appropriation
Committee's streamlining and prioritization of the
supplementary budget, so he was surprised that they walked
out during the plenary session. However, Suswan admitted
that only 60 percent of the 2003 budget capital expenditures
had been obligated, while the recurring expenditure account
had been fully committed (i.e. the capital budget had been
raided to pay for recurring expenses, and even that pot of
money had been exhausted).


Comment
-------


9. (U) Not only was money spent from the improper account, it
was spent before it had been budgeted for. The 2003
supplementary budget was proposed and approved after most or
all of the monies for the associated budget line items had
already been spent. Nigeria has not had a timely budget in
three years. Legally, the Government can spend money on the
basis of the past fiscal year's budget absent an approved
budget for the current fiscal year, if the National Assembly
does not approve a new one. End Comment.
MEECE

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