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Cablegate: Nigeria: National Assembly Sets Conditions for 2009 Budget

VZCZCXRO7497
PP RUEHMA RUEHPA
DE RUEHUJA #2439 3511506
ZNR UUUUU ZZH
P 161506Z DEC 08
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 4718
INFO RUEHOS/AMCONSUL LAGOS 0463
RUEHZK/ECOWAS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS ABUJA 002439

SIPDIS

DEPARTMENT PASS TO USTR AGAMA
TREASURY FOR PETERS, IERONIMO, HALL
DOC FOR 3317/ITA/OA/KBURRESS
AND 3130/USFC/OIO/ANESA/DHARRIS

E.O. 12958: N/A
TAGS: EFIN ECON EINV PGOV NI
SUBJECT: NIGERIA: NATIONAL ASSEMBLY SETS CONDITIONS FOR 2009 BUDGET

REF: A. ABUJA 2365
B. ABUJA 2225
C. ABUJA 0882

1. Summary. The 2009 budget seeks to limit fiscal spending because
of falling revenue from the sale of crude oil. The legislature's
intent to fund more projects is at odds with President Yar'Adua's
cost-cutting. Also, the National Assembly is putting pressure on
the executive because the 2008 budget was poorly implemented with
figures ranging from 30% to 50% for execution. The wrangling
between National Assembly and executive will make it unlikely for an
agreement on the 2009 budget by the end of 2008 or into early 2009.
End Summary.

National Assembly Conditions
----------------------------

2. President Yar'Adau presented the 2.87 trillion naira ($24.53
billion) budget for calendar year 2009 to the National Assembly (NA)
on December 2, 2008 (Reftel A). The NA is reluctant to support the
budget because it cuts expenditures in key areas. As a result, the
NA has set a number of conditions for passage:
--- Maintaining the medium-term expenditure proposal, especially on
the productive sectors whose activities affect the people's
welfare.
--- The ministries, departments and agencies (MDAs) must provide
detailed expenditure proposals.
--- Every capital expenditure request from MDAs must include
implementation schedules and actual cash requirements for each
implementation stage.
--- Comprehensive project costs must be submitted to the
legislature.

Net Result
----------

3. Comment: The NA is flexing muscles and defending fiscal turf.
The fiscal reality of lower government revenue due to falling crude
oil demand and prices has not been adequately comprehended by NA
members. This "learning" process will likely lead to significant
delays in budget passage that may last into mid-2009. The longer it
takes to agree on a budget the increased likelihood of poor budget
implementation. End Comment.

4. This message was coordinated with ConGen Lagos.

SANDERS

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