In a point-by-point response to the allegations made against him by the nation's House of Representatives to justify a move for his impeachment, President Olusegun Obasanjo has denied giving a $13 million loan to Ghana for the purchase of police cars.
We present an extract from the statement signed by the President's spokesman.
- Item 5: Extra Budgetary Expenditure on Certain Projects and Rampant Overseas Trips by Mr. President That Are Unbudgeted for
No fund had been released for purchase of 1,150 vehicles for the Police, nor $13 million to the Ghana Police Force. The CBN and OAGF and the Auditor-General of the Federation can confirm this position.
Below we present the full news as published by P.M. News (Lagos)
Impeachment: Obasanjo Replies House of Reps
(August 21, 2002) -- President Olusegun Obasanjo has given a point-by-point response to the allegations made against him by the nation's House of Representatives to justify a move for his impeachment.A statement issued by the State House described both the call on the president to resign and the move to impeach him as "vexatious, malicious, mischievous, uncalled for, unconstitutional and therefore rejected outright as it was done in bad faith".
Here is the full statement as signed by the President's spokesman, Mr. Tunji Oseni?
RESPONSE BY THE EXECUTIVE ARM OF GOVERNMENT TO RESOLUTION NO. HR.22 PASSED BY THE HOUSE OF REPRESENTATIVE ON 13TH AUGUST 2002.
The Executive arm of government has received a copy of Resolution No.HR 22 dated Tuesday , 13th August 2002 which was forwarded through the Secretary to the Government of the Federation.
The Executive is reliably informed that the resolution lacks procedural merit as the House was not properly reconvened as provided by Rule 13(3) of the House. Knowing the selfish and self-seeking motive of some members which formed the background to the resolution passed by the irregularly reconvened House, and in view of the frivolous unconstitutional and unsubstantiated nature of the allegations, the Executive would have ignored the resolution.
However, as democrats, the Federal Executive believes that all of us should learn the right lessons from every aspect of the practice of our democracy so that we can improve as we go along. While mistakes are inevitable, we may in the process learn to make corrections. For these reasons, the Federal Executive considers it appropriate to give full explanations in rebuttal of every aspect of the resolution to the Nigerian people who have stood firmly in defence of democracy, good governance, stability and integrity of the Nigerian nation.
Item 1 , Non implementation of Budgets for 1999, 2000 and 2001 Comments A budget is an indicative plan and may be implemented to the extent that the parameters encapsulated therein are realised. Recurrent expenditure of a budget, particularly personnel cost, is a first charge. The surplus arising thereafter, if any, is dedicated to the capital programme. Capital expenditure is a function and product of recurrent surplus from the Consolidated Revenue Fund Account. If there is no sufficient surplus after meeting recurrent obligations, capital projects will be difficult to fund.
Based on available revenue the budget for years 1999, 2000 and 2001 were correspondingly implemented. In fact, in the years 1999, 2000 and 2001 there were in-built deficit items which were not realised even though the core revenue i.e. revenue from oil and non-oil sources, was surpassed. Consequently, total revenue fell short of expectation as indicated in the figures below:
ACTUAL REVENUE COMPARED WITH EXPENDITURE BUDGET Prorated January-July 1999 2000 2001 2002 =N='b =N='b =N='b =N='b Total Expenditure (budgeted) 344.32 657.10 919.78 628.51 Total Revenue (actual) 260.00 597.98 743.24 387.88 Variance (84.32) (59.12) (176.54) (240.63 Thus, the actual revenue had always been below the budgeted expenditure.
In the light of the foregoing, the Federal Expenditure is surprised that this issue should be raised again after having been raised by the Senate in a similar resolution to which a detailed and satisfactory response was given.
Item 2 , Non-implementation of Capital aspect of 2002 Budget
Comment The Year 2002 Budget also has inbuilt deficit financing items expected to be funded by proceeds from the privatization of NITEL (projected to be in the region of US$1.3billion) and recovery of loot from the Abacha family (expected to be in the region of US$1.2 billion). It is common knowledge that these proceeds had not yet been realised. In addtion, the nation's oil quota had been cut by about 400,000 barrels a day from our previous level of 2.00million barrels per day to 1.788 million barrels a day. The year 2000 Budget was predicated on a production quota of 2.1 million barrels a day as against 1.788 million barrels a day now being produced.
While it is true that the international price of crude oil has averaged US$25 per barrel as against the US 18 dollars per barrel on which the 2002 budget was predicated, the average price of a basket of the different grades of oil produced by Nigeria has hovered around US$20.68. This coupled with the reduced production quota has inevitably led to a significant shortfall in oil revenue. This notwithstanding, as at the first week of August 2002 over 120 billion Naira, representing about 25% of the entire Capital Budget, has been released for various Capital projects as indicated below:
Agriculture: N2.5 billion, with N1 billion for procurement of fertilizers for the 2002/2003 planting seasons, while N1.5 billion was released to the Nigeria Agricultural Co-operative and Rural Development Bank.
Science and Technology: N4.3 billion to finance Biotechnology, space research and development, information Technology as well as Science Equipment development projects as approved in the 2002 Budget.
Works and Housing: N30.39 billion was released to various roads projects across the nation.
INEC: N7.39 billion was released being INEC's 2002 budgetary allocation: Electoral Budget.
Labour and Productivity: N1.068 billion was released for Labour Mass Transit.
Defence: Over N0.5 billion was released for barracks rehabilitation.
Industry: N1.25 billion to the Bank of Industry.
Power and Steel: N10 billion was released to fund various NEPA projects: generation, transmission and distribution.
Health: N0.840 billion for vaccines.
Item 3 , Unilateral Review of 2002 Budget By Executive Comment Shortly after the 2002 Appropriation Act was passed, it became apparent that the revenue projections that underpinned it were unrealistic. The President immediately took the initiative of inviting the leadership of the National Assembly to a member at the Presidential Villa on 4th June 2002 to brief them on the implications of the revenue shortfalls as well as the Supreme Court judgment on the 2002 Appropriations. They were also informed of the need to re-prioritize the Budget in the face of the dwindling revenue.
Subsequently, on 16th June, 2002 the President met with a delegation of nine Senator led by the Senate President, including the Chairmen of Senate Committees on Appropriations and Public Accounts, respectively, during which detailed responses were given to the charges of the Senate Public Accounts Committee on non-implementation of Budgets since 1999. Among other things, the Senate delegation was informed that there had been a significant shortfall in the revenue profile of the Budget, notably the unrealised US$1.3 billion and US$1.2 billion as a result of the botched family, respectively. At that meeting, it was agreed that a Joint Executive/Legislative Committee of twelve persons, six from each Arm, should be set up under the Chairmanship of the Vice President to review and re-prioritise the 2002 Appropriations in the light of the changing revenue profile.
This was immediately followed up with a formal communication to the leadership of each Chamber of the National Assembly requesting them to forward the names of their respective nominees to the Joint Committee. Instead of doing this as previously agreed, they declined to send their representatives to join those of the Executive on the Committee. The Executive, therefore, had no option but to proceed with the re-prioritisation exercise. The National Assembly was notified of the outcome of the exercise on 10th August 2002 as well the President's intention to send a Supplementary Bill to the National Assembly for some exceptional programmes and projects, inadvertently deleted in the 2002 Appropriations.
It should be stressed that the re-prioritisation exercise was limited to only re-ordering the projects and programmes already included and approved in the 2002 Appropriation Act, within the resources available to implement the Budget. It did not involve adding new expenditure to the already approved Budget and, therefore, the Executive did not deem it necessary to send a fresh Bill to the National Assembly. It was for this reason that the National Assembly was notified of the Executive's intention to send a Supplementary Appropriation Bill for those exceptional items inadvertently deleted in the 2002 main Appropriations. These actions cannot, therefore, by any stretch of the imagination, be said to be a usurpation of the Constitutional functions of the National Assembly.
Item 4 , Executive Order on 7.5% Special Funds
Comment Sequel to the Supreme Court judgment on the onshore/offshore suit, the Executive wasted no time in taking measures to clarify aspects of the judgment by setting up a Committee chaired by the Attorney-General and Minister of Justice to examine the implications of the judgment and to advise the President on its implications particularly on the 2002 Budget. Upon the submission of the Committee's report, it became obvious that the judgment had far-reaching implications for all tiers of government particularly some of the littoral states, and that something needed to be done urgently to avoid the grounding of the machinery of government.
Consequently, another Committee under the chairmanship of the Minister of Works and Housing was set up to examine the implications of the judgment on the derivations principle of revenue allocation and to recommend politician solutions to the problems arising from implementing the judgment as it affected this principle.
As a result of these steps, the President signed an Order on 8th May 2002, pursuant to Section 315 (2) of the 1999 Constitution by which the inconsistent provisions of the existing revenue allocation Act were amended to bring it into conformity with the Constitution and the Supreme Court judgment. One of the objectives of this pragmatic and interim measure was to calm the political system, which stood the risk of being over-heated as a result of the fallout from the judgment.
It would be recalled that the judgment had, among other things, declared unconstitutional certain first line charges on the Federation Accounts as well as the allocation to what was then known as Special Funds from the same account. Under the latter, provision was made for funding the FCT, Ecological Fund, Stabilisation Account and the Development of the Mineral Producing Areas. The Special Funds also allocated 1% to the derivation principle as against the minimum of 13% stipulated in the constitution. The judgment declared all these unconstitutional and stated that these anomalies could only be remedied either by a new revenue allocation law or an order by the appropriation authority, i.e. the president, modifying the existing law in order to bring the existing revenue allocation law into conformity with the 1999 Constitution.
The Order gave legal backing to the allocation of 13% of the revenue accruing to the Federation Account to the derivation fund, stopped in compliance with the Supreme Court judgment. It also re-distributed the 7.5% Special Funds to the same services for which they were originally devoted without the Federal Government taking any share of it. This has recently been further modified, following additional consultations, in order to give a little more to all the three tiers of government.
The Order was, therefore, not designed to provide a permanent solution to, or be a replacement for, a new Revenue Allocation Law but merely an interim measure aimed at bringing those aspects of the existing law declared to be inconsistent with the Constitution into conformity with the Constitution as determined by the apex court. It would be recalled that even before the Supreme Court judgment, the Executive had forwarded a Bill to the National Assembly for a new Revenue Allocation Law, on the advice of the Revenue Mobilization Allocation and Fiscal Commission. The Bill was yet to be acted on by the National Assembly before the Supreme Court pronounced the judgment on the onshore/offshore suite, which then rendered the Bill untenable.
It must be emphasized that the action the President took in signing the Order was done in absolute good faith and necessitated by the exigencies of the situation at hand, and not an attempt to usurp the powers of the National Assembly by amending the existing revenue allocation law. There were consultations with the States.
Item 5 , Extra Budgetary Expenditure on Certain Projects and Rampant Overseas Trips by Mr. President That Are Unbudgeted for
Comment Releases are made against corresponding projects in the Appropriation Act, and clearly spelt out in the breakdown. Expenditures on the National Stadium Projects, the National Identity Card and Purchase of vehicles by the Nigeria Police have been duly covered by Appropriations. For examples, N250 million was approved for purchase of vehicles for the Police in year 2002, while N13 billion was appropriated for the National Stadium out of which N8 billion had been advanced already leaving a balance of N5 billion.
No fund had been released for purchase of 1,150 vehicles for the Police, nor $13 million to the Ghana Police Force. The CBN and OAGF and the Auditor-General of the Federation can confirm this position.
It is not true that the President, C-in-C has been undertaking rampant overseas trips in excess of budgetary provisions for such trips, as all the trips undertaken so far have been financed within approved Appropriations. Out of a total of 113 trips undertaken by the President from 1999 to date, sixty-eight (68) of them were one-day return trips which did not attract payment of entitlements whatsoever to either Mr. President or members of his entourage. In fact, it is disservice to characterize these trips as rampant as they were all undertaken in pursuit of the national interest, often at enormous personal inconvenience to the President who had, on many occasions, to leave the country at the wee hours of the morning only to return early or late evening of the same day.
Most of the other trips were necessitated by the President's international commitment both as Nigeria's leader and an African Statesman, notably commitments arising from his Chairmanship of the G-77, Presidency of the South Summit and Chairmanship of the Heads of State Implementation Committee of the New Partnership for Africa's Development (NEPAD). The benefit of those trips are there for all to see as Nigeria has been fully re-integrated into the comity of nations, substantial amount of foreign investments have been attracted to the country, notably, in the oil and gas telecommunications, agricultural and industrial sectors. As a mark of Nigeria's changed international profile, forty-five foreign Head of State or Governments (including those of five G.8 countries) have visited Nigeria since the inception of the Administration, while the nation has been approached to host major international conferences and events.
Item 6 , Depreciation of the Exchange Rate of the Naira due to lack of Economic Blue Print
Comment The Federal Executive is surprised by the fact that the House has failed to recognize the unprecedented changes which the Nigeria economy has undergone since 1985. It is most unrealistic to expect immediate recovery within just a space of 3 years, especially in the face of exogenous happenings that the country has no control over. The value of the Naira has fallen over the 3 years of this Administration but this decline in value took place in spite of the sustained efforts of the Government to protect the value of the national currency. A different Government under the same condition might not have been able to hold the value of the Naira at the current value. In fact, looking at the comparative statistics, the period June 1999 to date witnessed the greatest stability in the value of the Naira. In the 13 years between August 1985 and May 1999, the value of the Naira declined from about N2.00 to the US Dollar (in 1985/1986) to about N94.00 to the US Dollar (in early May, 1999) compared with a devaluation from N96 to the US Dollar in May 1999 to N126 in July 2002. For purposes of comparison the exchange rate of the Ghanaian Cedi moved from 3,499 to US$1.00 in December 1999 to 6,900 to US$1.000 in December 2000 and 7,068 to US$1.00 in December 2001. Similarly, the South African Rand moved from 6.12 to the US$1.00 in 1999 to 7.55 to US$1.00 in 2000 and then to 12.00 to US$1 in December 2001.
It is equally surprising that the House of Representatives is not aware that an economic blueprint covering the period 1999 to 2003 has been in existence since 8th December, 1999.
Item 7 , Rising Inflation Rate and hardship on Nigerian Masses
Comments The level of inflation which is the rate of change in the general price level shown by the moving average of composite consumer price index in December of each year was 6.6% and 6.9% in 1999 and 2000 respectively. It increased precipitously to 19.6% in 2001 because of the sharp increase in food price index. Food inflation which galloped last year had begun a deceleration this year rising to just 10.3% in June 2002. Food prices increased last year due to various competing uses. Cassava (Gari), for example was being demanded for various domestic and international use. Thus, price increase has since abated and if the present declining trend is sustained, the level of inflation in December 2002 will be about 12%. It should however be noted that even though inflation is slowing, this does not suggest that prices are going down. It merely means that the rate of price increases has slowed.
The claim by the House of Representatives that inflation rate has continued to rise from 9% in 1999 to 19% in 2002 is not correct. Inflation rate was 6.6% in December 199 and it rose to 16.4% in June 2002. The level of inflation is now on a downward trend and it is intended to attain a single digit level of inflation next year. The number of employed people today is higher than before May 1999 and the income of the employed is much higher than before May 1999; therefore the number of people who are better off has improved on the pre-May 1999 number.
Industrial capacity utilization which was about 25% before May, 1999 rose to 34.60% during the second half of 1999, increasing rapidly to 40.2% and 42% in 2000 and 2001 respectively. It currently averages 55% reflecting the jump in power generation in Nigeria from less than 1,4000mgw in 1999 to 4,200mgw in 2002. In fact, capacity utilization is over 90% in the food and beverages industry. While the textile industry is yet to make an appreciable improvement, steps are being taken to enhance production. The foregoing scenario means that industries are kept busier. The real growth in agriculture in 2001 is 5.9% and growth in GDP 4.2% reflect the positive development in increased power generation and industrial capacity utilization. If the House had passed the amendment bill that will make Nigeria benefit from the American-African Growth and Opportunity Act (AGOA), we may have inched more on our economic growth. That bill has been with the lawmakers for more than one year.
Item 8 , Inability to redress insecurity, lawlessness, communal clashes and armed robbery
Comment It is common knowledge that since the inception of this administration, the issue of security has been accorded topmost priority. Among other measures, an early decision was taken to recruit 40,000 policemen per annum for a period of 4 years. That programme is being faithfully implemented. The Nigeria police has been re-kitted, reorganized and is being re-orientated. President retreats on security and conflict resolution were organized both in Abuja and Jos. Despite the invitation extended to them, the leadership of the House of Representatives failed to participated. Following this, a presidential panel on national security was constituted and is currently finding lasting solutions to the problems of insecurity. It is therefore surprising that the House of Representatives has failed to appreciate these measures and, in a contradictory twist, has turned round in the same resolution to blame the Executive for trying to acquire vehicles for the Nigeria Police which are essential for the maintenance of security.
Item 9 , Lack of Capacity to Manage the Security Concerns of the Country
Comment The upsurge in the incidence of communal clashes may also not be unconnected with the emergence of the democratic dispensation with its associated freedoms which have emboldened people, hitherto unable to express their pent-up emotions, to give vent to these. While this is to be expected, some unpatriotic people may well be cashing in on this situation in pursuit of their narrow interests. No government would allow the pursuit of the parochial ambition of such people at the expense on the lives of the citizenry and the larger interest of the society. How useful it would have been for the House of Representatives to set aside three days to conduct an in-depth debate on the security situation in the country as a positive input to the efforts of the Executive!
Item 10 , Non-Payment of the Salaries of Public Sector Workers
Comment Recurrent budget has always been regarded as a first charge against the Consolidated Revenue Fund. In particular, all established personnel costs are fully paid in respect of civil servants, both in Nigeria and Foreign Service personnel overseas. The only time there was a delay in the payment of salary was in July 2002 when the Federation Account Allocation Committee could not reach agreement in time due to the fall out from the Supreme Court judgment. As at 20th August 2002, all July salaries and allowances for all Federal staff and officials have been paid and August salaries have started to be paid.
Item 11 , Non-Payment of Staff Salaries in the Judicial Arms of Government
Comment Prior to the Supreme Court judgment on the onshore/offshore suit the recurrent expenditure of the Judicial was financed as a first line charge in the Federation Account. However, the Supreme Court declared this action unconstitutional on the ground that the 1999 Constitution stipulated that the recurrent expenditure of the Judicial should be a charge on the Consolidated Revenue Fund as against a first line charge on the Federation Account. However, the sum of N10.566 billion has been released to the Judiciary between April and July 2002.
Item 12 , Delayed Released of Funds to State Governments and Deduction of Debt Service Obligations At Source
Comment The delay in the release of allocation of States from the Federation Account occurred only in July 2002 due to the disputed arising from the fallout of the Supreme Court judgment. The dispute has since been resolved and State Governments have collected their share form the Federation Account.
With regard to the charge about deduction of debt servicing obligations at source, it would be recalled that following the Supreme Court pronouncement that declared all settlement of external debts from the Federation Account as a first line charge was unconstitutional, it was unanimously agreed by all the stakeholders that each government will bear the cost of the debt from its resources. However, the issue at stake was that of proper reconciliation of the debt with the Debt Management Office. Consequently, deduction from the allocation of each government, in respect of the external debts, was suspended from April till July 2002 when only one monthly installment was unanimously agreed at the FAAC meeting to be deducted with effect from July Allocation. Therefore, no act of illegality has been committed: each State paying its debt, and Federal government paying its own, is in consonance with the Constitution.
Item 13 , Arrest and Arraignment of NLC President
Comments The arrest of NLC President and his arraignment were effected by the police pursuant to their legitimate functions in which the government does not interfere. It is gratifying to observe the maturity and patriotism of the NLC President who in spite of raising his voice legitimately to protest and defend what he perceives as the interest of workers, knows that when those elected to preserve and defend democracy become destroyers of democracy and interest of the nation, he should stand up firmly to condemn unpatriotic behaviour.
Item 14 , Running NNPC As A Private Enterprise By Mr. President
Comment The Executive finds this allegation incomprehensible, callous and mischievous. The NNPC is a body set up by law with a board and currently overseeing its affairs while the day-to-day running is done by a management team headed by Group Managing Director. It is therefore strange to allege that it is being run as a private enterprise of Mr. President.
On the alleged cloudy nature of the NNPC, a discerning observer would not failed to notice the significant changes in the new NNPC. The corporation is run with absolute transparency, accountability and probity.
For the first time in many years the corporation publishes without fail a quarterly report on its accounts and operations for public consumption. Copies of these reports are regularly sent to relevant committees of the National Assembly by the NNPC.
The improved efficiency and performance of the NNPC can be seen from, among other things: a. Availability of petroleum products nation-wide resulting in complete disappearance of queue which were prevalent before the emergency of this administration.
b. Complete turn-around maintenance of all the nation's refineries which are now producing petroleum products.
c. NNPC's ability to pay Joint Venture Cash Calls as and when due, resulting in an increase in the nation's proven oil reserves as a result more aggressive exploration activities.
d. Greater transparency on the part of the Joint Venture operators.
e. The adoption of the open competitive tender system for the allocation of new oil blocks and the importation of petroleum products.
f. The drastic reduction in the vandalisation of pipelines and other facilities and installations.
g. Increase in oil block auctioning
h. Policy on marginal fields
i. Revocation of oil blocks fraudulently allocated e.g. oil block No. 245.
j. Crude oil reserve increased from 25 billion barrels to 30 billion barrel.
k. Production capacity increased from 2.4mb/d to 2.8mb/d.
Item 15 , Alleged Use of CBN As an Institution for committing All Sorts of Fraud and Illegalities
Comment This allegation is vague as it is not specifically directed against any functionary or institution in the Executive arm. Such a wild allegation does not connote responsibility. It is also indicative of the lengths they can go to impugn the reputation of the apex financial institution without minding the negative effect this would have on the local and international investing community interested in our economy. It is not only irresponsible but also grossly unpatriotic.
In conclusion, the advice for the President, C-in-C to resign is vexatious, malicious, mischievous, uncalled for, unconstitutional and therefore rejected outright as it was done in bad faith.
Without doubt, the work of governing this country would have been easier and we would have made more progress, if the House will seriously and painstakingly devote itself to the task of law making rather than money making whether by fair or foul means. It is instructive to note that the Executive has over the past three years initiated and submitted 97 bill to the National Assembly for passage into Law. The fact is that only a paltry 20 of these bills, mostly Appropriation Bills have been enacted by our Lawmakers to hasten action on the numerous non-Appropriation but extremely critical bill demanding their attention.
We will, therefore, appeal to all patriotic and well-meaning members of the House of Representatives to join hands with the President and the Executive arm of government to continue to move our country forward with confidence, in unity and to continue to nurture our nascent democracy, for the stability, progress and prosperity of our nation.
Africa is looking up to us; the world is watching; we cannot afford to disappoint ourselves; to shatter the hope of Africa in Nigeria and confirm the view of the skeptics that nothing good can come out of Black Africa.
The President and C-in-C wishes to assure the nation that he is committed to upholding the Constitution in consonance with his oath of office. He is also committed to treating every branch of government with fairness and respect. He therefore calls on functionaries in all branches of government to rededicated themselves to greater cooperation in order to strengthen our nascent democracy, improve our economy and ensure the welfare of all Nigerians.
The President and Commander-in-Chief has the vision of a new nation with hope with a new mission and with a new destiny. He has the vision of a land unity, dynamism, love, righteousness, opportunity and prosperity , a model within the comity of nations
In a point-by-point response to the allegations made against him by the nation's House of Representatives to justify a move for his impeachment, President Olusegun Obasanjo has denied giving a $13 million loan to Ghana for the purchase of police cars.
We present an extract from the statement signed by the President's spokesman.
- Item 5: Extra Budgetary Expenditure on Certain Projects and Rampant Overseas Trips by Mr. President That Are Unbudgeted for
No fund had been released for purchase of 1,150 vehicles for the Police, nor $13 million to the Ghana Police Force. The CBN and OAGF and the Auditor-General of the Federation can confirm this position.
Below we present the full news as published by P.M. News (Lagos)
Impeachment: Obasanjo Replies House of Reps
(August 21, 2002) -- President Olusegun Obasanjo has given a point-by-point response to the allegations made against him by the nation's House of Representatives to justify a move for his impeachment.A statement issued by the State House described both the call on the president to resign and the move to impeach him as "vexatious, malicious, mischievous, uncalled for, unconstitutional and therefore rejected outright as it was done in bad faith".
Here is the full statement as signed by the President's spokesman, Mr. Tunji Oseni?
RESPONSE BY THE EXECUTIVE ARM OF GOVERNMENT TO RESOLUTION NO. HR.22 PASSED BY THE HOUSE OF REPRESENTATIVE ON 13TH AUGUST 2002.
The Executive arm of government has received a copy of Resolution No.HR 22 dated Tuesday , 13th August 2002 which was forwarded through the Secretary to the Government of the Federation.
The Executive is reliably informed that the resolution lacks procedural merit as the House was not properly reconvened as provided by Rule 13(3) of the House. Knowing the selfish and self-seeking motive of some members which formed the background to the resolution passed by the irregularly reconvened House, and in view of the frivolous unconstitutional and unsubstantiated nature of the allegations, the Executive would have ignored the resolution.
However, as democrats, the Federal Executive believes that all of us should learn the right lessons from every aspect of the practice of our democracy so that we can improve as we go along. While mistakes are inevitable, we may in the process learn to make corrections. For these reasons, the Federal Executive considers it appropriate to give full explanations in rebuttal of every aspect of the resolution to the Nigerian people who have stood firmly in defence of democracy, good governance, stability and integrity of the Nigerian nation.
Item 1 , Non implementation of Budgets for 1999, 2000 and 2001 Comments A budget is an indicative plan and may be implemented to the extent that the parameters encapsulated therein are realised. Recurrent expenditure of a budget, particularly personnel cost, is a first charge. The surplus arising thereafter, if any, is dedicated to the capital programme. Capital expenditure is a function and product of recurrent surplus from the Consolidated Revenue Fund Account. If there is no sufficient surplus after meeting recurrent obligations, capital projects will be difficult to fund.
Based on available revenue the budget for years 1999, 2000 and 2001 were correspondingly implemented. In fact, in the years 1999, 2000 and 2001 there were in-built deficit items which were not realised even though the core revenue i.e. revenue from oil and non-oil sources, was surpassed. Consequently, total revenue fell short of expectation as indicated in the figures below:
ACTUAL REVENUE COMPARED WITH EXPENDITURE BUDGET Prorated January-July 1999 2000 2001 2002 =N='b =N='b =N='b =N='b Total Expenditure (budgeted) 344.32 657.10 919.78 628.51 Total Revenue (actual) 260.00 597.98 743.24 387.88 Variance (84.32) (59.12) (176.54) (240.63 Thus, the actual revenue had always been below the budgeted expenditure.
In the light of the foregoing, the Federal Expenditure is surprised that this issue should be raised again after having been raised by the Senate in a similar resolution to which a detailed and satisfactory response was given.
Item 2 , Non-implementation of Capital aspect of 2002 Budget
Comment The Year 2002 Budget also has inbuilt deficit financing items expected to be funded by proceeds from the privatization of NITEL (projected to be in the region of US$1.3billion) and recovery of loot from the Abacha family (expected to be in the region of US$1.2 billion). It is common knowledge that these proceeds had not yet been realised. In addtion, the nation's oil quota had been cut by about 400,000 barrels a day from our previous level of 2.00million barrels per day to 1.788 million barrels a day. The year 2000 Budget was predicated on a production quota of 2.1 million barrels a day as against 1.788 million barrels a day now being produced.
While it is true that the international price of crude oil has averaged US$25 per barrel as against the US 18 dollars per barrel on which the 2002 budget was predicated, the average price of a basket of the different grades of oil produced by Nigeria has hovered around US$20.68. This coupled with the reduced production quota has inevitably led to a significant shortfall in oil revenue. This notwithstanding, as at the first week of August 2002 over 120 billion Naira, representing about 25% of the entire Capital Budget, has been released for various Capital projects as indicated below:
Agriculture: N2.5 billion, with N1 billion for procurement of fertilizers for the 2002/2003 planting seasons, while N1.5 billion was released to the Nigeria Agricultural Co-operative and Rural Development Bank.
Science and Technology: N4.3 billion to finance Biotechnology, space research and development, information Technology as well as Science Equipment development projects as approved in the 2002 Budget.
Works and Housing: N30.39 billion was released to various roads projects across the nation.
INEC: N7.39 billion was released being INEC's 2002 budgetary allocation: Electoral Budget.
Labour and Productivity: N1.068 billion was released for Labour Mass Transit.
Defence: Over N0.5 billion was released for barracks rehabilitation.
Industry: N1.25 billion to the Bank of Industry.
Power and Steel: N10 billion was released to fund various NEPA projects: generation, transmission and distribution.
Health: N0.840 billion for vaccines.
Item 3 , Unilateral Review of 2002 Budget By Executive Comment Shortly after the 2002 Appropriation Act was passed, it became apparent that the revenue projections that underpinned it were unrealistic. The President immediately took the initiative of inviting the leadership of the National Assembly to a member at the Presidential Villa on 4th June 2002 to brief them on the implications of the revenue shortfalls as well as the Supreme Court judgment on the 2002 Appropriations. They were also informed of the need to re-prioritize the Budget in the face of the dwindling revenue.
Subsequently, on 16th June, 2002 the President met with a delegation of nine Senator led by the Senate President, including the Chairmen of Senate Committees on Appropriations and Public Accounts, respectively, during which detailed responses were given to the charges of the Senate Public Accounts Committee on non-implementation of Budgets since 1999. Among other things, the Senate delegation was informed that there had been a significant shortfall in the revenue profile of the Budget, notably the unrealised US$1.3 billion and US$1.2 billion as a result of the botched family, respectively. At that meeting, it was agreed that a Joint Executive/Legislative Committee of twelve persons, six from each Arm, should be set up under the Chairmanship of the Vice President to review and re-prioritise the 2002 Appropriations in the light of the changing revenue profile.
This was immediately followed up with a formal communication to the leadership of each Chamber of the National Assembly requesting them to forward the names of their respective nominees to the Joint Committee. Instead of doing this as previously agreed, they declined to send their representatives to join those of the Executive on the Committee. The Executive, therefore, had no option but to proceed with the re-prioritisation exercise. The National Assembly was notified of the outcome of the exercise on 10th August 2002 as well the President's intention to send a Supplementary Bill to the National Assembly for some exceptional programmes and projects, inadvertently deleted in the 2002 Appropriations.
It should be stressed that the re-prioritisation exercise was limited to only re-ordering the projects and programmes already included and approved in the 2002 Appropriation Act, within the resources available to implement the Budget. It did not involve adding new expenditure to the already approved Budget and, therefore, the Executive did not deem it necessary to send a fresh Bill to the National Assembly. It was for this reason that the National Assembly was notified of the Executive's intention to send a Supplementary Appropriation Bill for those exceptional items inadvertently deleted in the 2002 main Appropriations. These actions cannot, therefore, by any stretch of the imagination, be said to be a usurpation of the Constitutional functions of the National Assembly.
Item 4 , Executive Order on 7.5% Special Funds
Comment Sequel to the Supreme Court judgment on the onshore/offshore suit, the Executive wasted no time in taking measures to clarify aspects of the judgment by setting up a Committee chaired by the Attorney-General and Minister of Justice to examine the implications of the judgment and to advise the President on its implications particularly on the 2002 Budget. Upon the submission of the Committee's report, it became obvious that the judgment had far-reaching implications for all tiers of government particularly some of the littoral states, and that something needed to be done urgently to avoid the grounding of the machinery of government.
Consequently, another Committee under the chairmanship of the Minister of Works and Housing was set up to examine the implications of the judgment on the derivations principle of revenue allocation and to recommend politician solutions to the problems arising from implementing the judgment as it affected this principle.
As a result of these steps, the President signed an Order on 8th May 2002, pursuant to Section 315 (2) of the 1999 Constitution by which the inconsistent provisions of the existing revenue allocation Act were amended to bring it into conformity with the Constitution and the Supreme Court judgment. One of the objectives of this pragmatic and interim measure was to calm the political system, which stood the risk of being over-heated as a result of the fallout from the judgment.
It would be recalled that the judgment had, among other things, declared unconstitutional certain first line charges on the Federation Accounts as well as the allocation to what was then known as Special Funds from the same account. Under the latter, provision was made for funding the FCT, Ecological Fund, Stabilisation Account and the Development of the Mineral Producing Areas. The Special Funds also allocated 1% to the derivation principle as against the minimum of 13% stipulated in the constitution. The judgment declared all these unconstitutional and stated that these anomalies could only be remedied either by a new revenue allocation law or an order by the appropriation authority, i.e. the president, modifying the existing law in order to bring the existing revenue allocation law into conformity with the 1999 Constitution.
The Order gave legal backing to the allocation of 13% of the revenue accruing to the Federation Account to the derivation fund, stopped in compliance with the Supreme Court judgment. It also re-distributed the 7.5% Special Funds to the same services for which they were originally devoted without the Federal Government taking any share of it. This has recently been further modified, following additional consultations, in order to give a little more to all the three tiers of government.
The Order was, therefore, not designed to provide a permanent solution to, or be a replacement for, a new Revenue Allocation Law but merely an interim measure aimed at bringing those aspects of the existing law declared to be inconsistent with the Constitution into conformity with the Constitution as determined by the apex court. It would be recalled that even before the Supreme Court judgment, the Executive had forwarded a Bill to the National Assembly for a new Revenue Allocation Law, on the advice of the Revenue Mobilization Allocation and Fiscal Commission. The Bill was yet to be acted on by the National Assembly before the Supreme Court pronounced the judgment on the onshore/offshore suite, which then rendered the Bill untenable.
It must be emphasized that the action the President took in signing the Order was done in absolute good faith and necessitated by the exigencies of the situation at hand, and not an attempt to usurp the powers of the National Assembly by amending the existing revenue allocation law. There were consultations with the States.
Item 5 , Extra Budgetary Expenditure on Certain Projects and Rampant Overseas Trips by Mr. President That Are Unbudgeted for
Comment Releases are made against corresponding projects in the Appropriation Act, and clearly spelt out in the breakdown. Expenditures on the National Stadium Projects, the National Identity Card and Purchase of vehicles by the Nigeria Police have been duly covered by Appropriations. For examples, N250 million was approved for purchase of vehicles for the Police in year 2002, while N13 billion was appropriated for the National Stadium out of which N8 billion had been advanced already leaving a balance of N5 billion.
No fund had been released for purchase of 1,150 vehicles for the Police, nor $13 million to the Ghana Police Force. The CBN and OAGF and the Auditor-General of the Federation can confirm this position.
It is not true that the President, C-in-C has been undertaking rampant overseas trips in excess of budgetary provisions for such trips, as all the trips undertaken so far have been financed within approved Appropriations. Out of a total of 113 trips undertaken by the President from 1999 to date, sixty-eight (68) of them were one-day return trips which did not attract payment of entitlements whatsoever to either Mr. President or members of his entourage. In fact, it is disservice to characterize these trips as rampant as they were all undertaken in pursuit of the national interest, often at enormous personal inconvenience to the President who had, on many occasions, to leave the country at the wee hours of the morning only to return early or late evening of the same day.
Most of the other trips were necessitated by the President's international commitment both as Nigeria's leader and an African Statesman, notably commitments arising from his Chairmanship of the G-77, Presidency of the South Summit and Chairmanship of the Heads of State Implementation Committee of the New Partnership for Africa's Development (NEPAD). The benefit of those trips are there for all to see as Nigeria has been fully re-integrated into the comity of nations, substantial amount of foreign investments have been attracted to the country, notably, in the oil and gas telecommunications, agricultural and industrial sectors. As a mark of Nigeria's changed international profile, forty-five foreign Head of State or Governments (including those of five G.8 countries) have visited Nigeria since the inception of the Administration, while the nation has been approached to host major international conferences and events.
Item 6 , Depreciation of the Exchange Rate of the Naira due to lack of Economic Blue Print
Comment The Federal Executive is surprised by the fact that the House has failed to recognize the unprecedented changes which the Nigeria economy has undergone since 1985. It is most unrealistic to expect immediate recovery within just a space of 3 years, especially in the face of exogenous happenings that the country has no control over. The value of the Naira has fallen over the 3 years of this Administration but this decline in value took place in spite of the sustained efforts of the Government to protect the value of the national currency. A different Government under the same condition might not have been able to hold the value of the Naira at the current value. In fact, looking at the comparative statistics, the period June 1999 to date witnessed the greatest stability in the value of the Naira. In the 13 years between August 1985 and May 1999, the value of the Naira declined from about N2.00 to the US Dollar (in 1985/1986) to about N94.00 to the US Dollar (in early May, 1999) compared with a devaluation from N96 to the US Dollar in May 1999 to N126 in July 2002. For purposes of comparison the exchange rate of the Ghanaian Cedi moved from 3,499 to US$1.00 in December 1999 to 6,900 to US$1.000 in December 2000 and 7,068 to US$1.00 in December 2001. Similarly, the South African Rand moved from 6.12 to the US$1.00 in 1999 to 7.55 to US$1.00 in 2000 and then to 12.00 to US$1 in December 2001.
It is equally surprising that the House of Representatives is not aware that an economic blueprint covering the period 1999 to 2003 has been in existence since 8th December, 1999.
Item 7 , Rising Inflation Rate and hardship on Nigerian Masses
Comments The level of inflation which is the rate of change in the general price level shown by the moving average of composite consumer price index in December of each year was 6.6% and 6.9% in 1999 and 2000 respectively. It increased precipitously to 19.6% in 2001 because of the sharp increase in food price index. Food inflation which galloped last year had begun a deceleration this year rising to just 10.3% in June 2002. Food prices increased last year due to various competing uses. Cassava (Gari), for example was being demanded for various domestic and international use. Thus, price increase has since abated and if the present declining trend is sustained, the level of inflation in December 2002 will be about 12%. It should however be noted that even though inflation is slowing, this does not suggest that prices are going down. It merely means that the rate of price increases has slowed.
The claim by the House of Representatives that inflation rate has continued to rise from 9% in 1999 to 19% in 2002 is not correct. Inflation rate was 6.6% in December 199 and it rose to 16.4% in June 2002. The level of inflation is now on a downward trend and it is intended to attain a single digit level of inflation next year. The number of employed people today is higher than before May 1999 and the income of the employed is much higher than before May 1999; therefore the number of people who are better off has improved on the pre-May 1999 number.
Industrial capacity utilization which was about 25% before May, 1999 rose to 34.60% during the second half of 1999, increasing rapidly to 40.2% and 42% in 2000 and 2001 respectively. It currently averages 55% reflecting the jump in power generation in Nigeria from less than 1,4000mgw in 1999 to 4,200mgw in 2002. In fact, capacity utilization is over 90% in the food and beverages industry. While the textile industry is yet to make an appreciable improvement, steps are being taken to enhance production. The foregoing scenario means that industries are kept busier. The real growth in agriculture in 2001 is 5.9% and growth in GDP 4.2% reflect the positive development in increased power generation and industrial capacity utilization. If the House had passed the amendment bill that will make Nigeria benefit from the American-African Growth and Opportunity Act (AGOA), we may have inched more on our economic growth. That bill has been with the lawmakers for more than one year.
Item 8 , Inability to redress insecurity, lawlessness, communal clashes and armed robbery
Comment It is common knowledge that since the inception of this administration, the issue of security has been accorded topmost priority. Among other measures, an early decision was taken to recruit 40,000 policemen per annum for a period of 4 years. That programme is being faithfully implemented. The Nigeria police has been re-kitted, reorganized and is being re-orientated. President retreats on security and conflict resolution were organized both in Abuja and Jos. Despite the invitation extended to them, the leadership of the House of Representatives failed to participated. Following this, a presidential panel on national security was constituted and is currently finding lasting solutions to the problems of insecurity. It is therefore surprising that the House of Representatives has failed to appreciate these measures and, in a contradictory twist, has turned round in the same resolution to blame the Executive for trying to acquire vehicles for the Nigeria Police which are essential for the maintenance of security.
Item 9 , Lack of Capacity to Manage the Security Concerns of the Country
Comment The upsurge in the incidence of communal clashes may also not be unconnected with the emergence of the democratic dispensation with its associated freedoms which have emboldened people, hitherto unable to express their pent-up emotions, to give vent to these. While this is to be expected, some unpatriotic people may well be cashing in on this situation in pursuit of their narrow interests. No government would allow the pursuit of the parochial ambition of such people at the expense on the lives of the citizenry and the larger interest of the society. How useful it would have been for the House of Representatives to set aside three days to conduct an in-depth debate on the security situation in the country as a positive input to the efforts of the Executive!
Item 10 , Non-Payment of the Salaries of Public Sector Workers
Comment Recurrent budget has always been regarded as a first charge against the Consolidated Revenue Fund. In particular, all established personnel costs are fully paid in respect of civil servants, both in Nigeria and Foreign Service personnel overseas. The only time there was a delay in the payment of salary was in July 2002 when the Federation Account Allocation Committee could not reach agreement in time due to the fall out from the Supreme Court judgment. As at 20th August 2002, all July salaries and allowances for all Federal staff and officials have been paid and August salaries have started to be paid.
Item 11 , Non-Payment of Staff Salaries in the Judicial Arms of Government
Comment Prior to the Supreme Court judgment on the onshore/offshore suit the recurrent expenditure of the Judicial was financed as a first line charge in the Federation Account. However, the Supreme Court declared this action unconstitutional on the ground that the 1999 Constitution stipulated that the recurrent expenditure of the Judicial should be a charge on the Consolidated Revenue Fund as against a first line charge on the Federation Account. However, the sum of N10.566 billion has been released to the Judiciary between April and July 2002.
Item 12 , Delayed Released of Funds to State Governments and Deduction of Debt Service Obligations At Source
Comment The delay in the release of allocation of States from the Federation Account occurred only in July 2002 due to the disputed arising from the fallout of the Supreme Court judgment. The dispute has since been resolved and State Governments have collected their share form the Federation Account.
With regard to the charge about deduction of debt servicing obligations at source, it would be recalled that following the Supreme Court pronouncement that declared all settlement of external debts from the Federation Account as a first line charge was unconstitutional, it was unanimously agreed by all the stakeholders that each government will bear the cost of the debt from its resources. However, the issue at stake was that of proper reconciliation of the debt with the Debt Management Office. Consequently, deduction from the allocation of each government, in respect of the external debts, was suspended from April till July 2002 when only one monthly installment was unanimously agreed at the FAAC meeting to be deducted with effect from July Allocation. Therefore, no act of illegality has been committed: each State paying its debt, and Federal government paying its own, is in consonance with the Constitution.
Item 13 , Arrest and Arraignment of NLC President
Comments The arrest of NLC President and his arraignment were effected by the police pursuant to their legitimate functions in which the government does not interfere. It is gratifying to observe the maturity and patriotism of the NLC President who in spite of raising his voice legitimately to protest and defend what he perceives as the interest of workers, knows that when those elected to preserve and defend democracy become destroyers of democracy and interest of the nation, he should stand up firmly to condemn unpatriotic behaviour.
Item 14 , Running NNPC As A Private Enterprise By Mr. President
Comment The Executive finds this allegation incomprehensible, callous and mischievous. The NNPC is a body set up by law with a board and currently overseeing its affairs while the day-to-day running is done by a management team headed by Group Managing Director. It is therefore strange to allege that it is being run as a private enterprise of Mr. President.
On the alleged cloudy nature of the NNPC, a discerning observer would not failed to notice the significant changes in the new NNPC. The corporation is run with absolute transparency, accountability and probity.
For the first time in many years the corporation publishes without fail a quarterly report on its accounts and operations for public consumption. Copies of these reports are regularly sent to relevant committees of the National Assembly by the NNPC.
The improved efficiency and performance of the NNPC can be seen from, among other things: a. Availability of petroleum products nation-wide resulting in complete disappearance of queue which were prevalent before the emergency of this administration.
b. Complete turn-around maintenance of all the nation's refineries which are now producing petroleum products.
c. NNPC's ability to pay Joint Venture Cash Calls as and when due, resulting in an increase in the nation's proven oil reserves as a result more aggressive exploration activities.
d. Greater transparency on the part of the Joint Venture operators.
e. The adoption of the open competitive tender system for the allocation of new oil blocks and the importation of petroleum products.
f. The drastic reduction in the vandalisation of pipelines and other facilities and installations.
g. Increase in oil block auctioning
h. Policy on marginal fields
i. Revocation of oil blocks fraudulently allocated e.g. oil block No. 245.
j. Crude oil reserve increased from 25 billion barrels to 30 billion barrel.
k. Production capacity increased from 2.4mb/d to 2.8mb/d.
Item 15 , Alleged Use of CBN As an Institution for committing All Sorts of Fraud and Illegalities
Comment This allegation is vague as it is not specifically directed against any functionary or institution in the Executive arm. Such a wild allegation does not connote responsibility. It is also indicative of the lengths they can go to impugn the reputation of the apex financial institution without minding the negative effect this would have on the local and international investing community interested in our economy. It is not only irresponsible but also grossly unpatriotic.
In conclusion, the advice for the President, C-in-C to resign is vexatious, malicious, mischievous, uncalled for, unconstitutional and therefore rejected outright as it was done in bad faith.
Without doubt, the work of governing this country would have been easier and we would have made more progress, if the House will seriously and painstakingly devote itself to the task of law making rather than money making whether by fair or foul means. It is instructive to note that the Executive has over the past three years initiated and submitted 97 bill to the National Assembly for passage into Law. The fact is that only a paltry 20 of these bills, mostly Appropriation Bills have been enacted by our Lawmakers to hasten action on the numerous non-Appropriation but extremely critical bill demanding their attention.
We will, therefore, appeal to all patriotic and well-meaning members of the House of Representatives to join hands with the President and the Executive arm of government to continue to move our country forward with confidence, in unity and to continue to nurture our nascent democracy, for the stability, progress and prosperity of our nation.
Africa is looking up to us; the world is watching; we cannot afford to disappoint ourselves; to shatter the hope of Africa in Nigeria and confirm the view of the skeptics that nothing good can come out of Black Africa.
The President and C-in-C wishes to assure the nation that he is committed to upholding the Constitution in consonance with his oath of office. He is also committed to treating every branch of government with fairness and respect. He therefore calls on functionaries in all branches of government to rededicated themselves to greater cooperation in order to strengthen our nascent democracy, improve our economy and ensure the welfare of all Nigerians.
The President and Commander-in-Chief has the vision of a new nation with hope with a new mission and with a new destiny. He has the vision of a land unity, dynamism, love, righteousness, opportunity and prosperity , a model within the comity of nations
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