Senate moves to curb extra-budgetary spending

Senate President, David Mark

Worried by cases of monumental corruption and the challenge to the powers of the National Assembly to appropriate funds before expenditure, the Senate is seeking to compel more public agencies to abide by the rules through the passage of amendments to the Company and Allied Matters Act,  reports SUNDAY ABORISADE

Extra-budgetary expenditure has become the norm, rather than the exception in Nigeria. Hardly a month passes without members of the National Assembly raising the alarm about the discovery of public funds being spent without appropriation.

To worsen matters, some public institutions have perfected the art of hanging on to real or imagined gaps in legislation, to generate and spend such incomes without the knowledge or consent of the National Assembly, as required by law.

Only recently, both chambers of the National Assembly raised the issue of looking into the books of the Central Bank of Nigeria after its suspended governor, Sanusi Lamido,

was accused of spending billions of tax payers’ money without authorisation.

The desire to end such practices perhaps informed the recent passage of an amendment to the Companies and Allied Matters Act Cap.C20 Laws of the Federation of Nigeria, 2004.

The Senate, penultimate Wednesday, passed the bill which among other provisions, requires the Corporate Affairs Commission to subject the appointment of its chairman to Senate confirmation while also making provisions for the appointment as well as functions of Secretary of the commission.

By this amendment, which is subject to concurrence by the House of Representatives and presidential assent, the commission will be under obligations to submit its annual estimates and financial reports to the National Assembly.

Chairman, Senate Committee on Trade, Senator Odion Ugbesia, while presenting highlights of the report for the consideration of the upper chamber, explained that the major objective of the bill was to strengthen the CAC, which, according to him, “is the gateway to the nation’s economy.”

Ugbesia explained that the bill, among other provisions, stipulates that the appointment of the commission’s board chairman and its members shall reflect the federal character principles as provided for in the 1999 Constitution (as amended).

According to him, the bill recommends that the chairman of the commission shall be appointed by the President of the Federal Republic of Nigeria on the recommendations of the minister of its supervising ministry.

He added that the chairman of the commission, “shall be a person who by reason of his ability, experience or specialised knowledge of corporate, industrial, commercial, financial or economic matters of business or professional attainments would in his opinion be capable of making outstanding contributions to the work of the commission.”

The bill also provides that the board would also have a representative each from the business community appointed by the minister on the recommendations of the Nigerian Association of Chambers of Commerce, Industries, Mines and Agriculture.

Professions listed among those to be represented on the board include law and accountancy. Other members of the board are to be drawn from the Manufacturers Association of Nigeria, Securities and Exchange Commission, and the Ministries of Commerce, Justice and Industry as well as the Registrar General of the Federation.

While underscoring the need for the amendments, Ugbesia said his committee, which has oversight functions over CAC, discovered that the commission did not present its budget to the National Assembly for scrutiny.

He said, “What we discovered is that the CAC budget doesn’t come to the National Assembly for approval. It goes straight to the minister who will forward it to the President. As far as the Fiscal Responsibility Act is concerned, the minister is not an Appropriation authority, the Presidency is not, either. The only body that can appropriate money in this country is the National Assembly. So, there has been this aberration and we needed to correct it.”

The senator added that his committee was also of the opinion that since the CAC was the gateway to the nation’s economy, because to do any business in Nigeria, “the first port of call is the CAC.” He noted that any firm which sought to do business in Nigeria was required by law to first register with the CAC. This, he said, made it imperative that any individual to be appointed to supervise the commission must be a person of proven integrity and a person considered fit and proper for the job.

Hence, he said, the bill provided that whoever was going to be appointed as chairman, should be sent to the Senate which in turn would be required to in line with its rules, scrutinise the candidate’s documents, his/ her pedigree as well as do a proper background check before he or she could be recommended for appointment.

While explaining the rationale behind the provision to include the federal character principle in the bill, Ugbesia, informed his colleagues that, the bill provided that the Ministries of Trade and Justice, the Nigeria Bar Association as statutory bodies, which were required to be represented on the board might end up presenting individuals from the same geographical zone or even the same state.

This, he further explained, was not only in breach of the constitution; it was also not in tandem with the principle of equity and fairness required for national development.

He, however, maintained that the bill was in no way trying to remove the powers conferred on the President to appoint the Chairman of the board of the CAC but that, if Mr. President should appoint somebody, the Senate as representatives of the Nigerian people should have a say on the method engaged to make such an appointment.

According to him, the bill has been before the Senate for a very long time which ought not to have been the case as Nigerians and the rest of the world are looking forward to a more transparent way of doing business.

“The non-appropriation of agency’s budget by the National Assembly breeds recklessness and corruption. For instance, the Central Bank of Nigeria, we don’t see its budget here. A body as big as that should have its budget scrutinised by the National Assembly because it is the only body saddled with the responsibility to appropriate money. Anybody else that is doing that is going against the law.” Ugbesia said.

However, as lofty as this ideal appears, political observers express fears that both chambers of the National Assembly will be heading for another round of dispute with the Executive which appears to have given tacit support to some of its parastatals to hold on to the details of their  operations.

It is worthy of note that the National Assembly has yet to make meaningful progress in its age long battle to force agencies such as the Nigerian National petroleum Corporation, the CBN, and a few others, to subject their budgets to legislative scrutiny.

With the amendment of the CAMA Act, the Senate is bent on ensuring that the CAC complies with every rule of financial allocation, appropriation and expenditure.

For instance, Section 14(3) of the Principal Act of the commission had provided that “the commission shall cause to be prepared, not later than 30 September in each year, an estimate of the expenditure and income of the commission during the next succeeding year and when prepared, they shall be submitted through the minister to the President.”

In amending the Act, the Senate specifically gave approval for the section to be altered to read, “The commission shall cause to be prepared, not later than 30 September in each year, an estimate of the expenditure and income of the commission during the next succeeding year and when prepared, they shall be submitted through the minister to the National Assembly.”

To further subject the expenditure of the commission to National Assembly scrutiny, the Senate amended the Principal Act of the CAC to compel it to submit a report on its activities during the preceding year which shall include its audited accounts to the National Assembly not later than 30 June of each year.

The Senate also amended the Act to ensure that all seven members of the commission are selected from the six geo-political zones of the country. The board has seven members including the chairman.

Change is often difficult to accept but the Senate appears determined to follow through with its new amendments. For years, the National Assembly has tried to compel agencies under the direct supervision of the executive to be more accountable to the public. This attempt has more often than not been the source of conflict between the two arms of government. Will this amendment succeed abd achieve its aims. Only time shall tell.