Very recently the Nigerian Governor’s Forum (NGF) claimed that the Presidency acted contrary to the law when it forwarded the Medium Term Expenditure Framework (MTEF) to the National Assembly without input from the States. If we assume that the claim of the NGF is true, what is the position of the law? Did the Presidency act contrary to the law? Infact which law (if any) did the Presidency flout?
The MTEF Described
The MTEF is a creation of the Fiscal Responsibility Act 2007 (Act No. 31 of 2007, hereafter referred to as just “FRA”). One of the purposes of the FRA was to ensure long term macro-economic stability of the Nation’s economy and secure greater ‘accountability’ and ‘transparency’ in the fiscal operations within the Medium Term Fiscal Policy Framework. One of the ways in which the Act set out to achieve these purposes was through the creation of the MTEF.
The MTEF is basically a bundle of documents containing five key components/projections for the country’s next three financial years. Those five key economic components contained in the MTEF are the Macro-Economic Framework, Fiscal Strategy Paper, Expenditure and Revenue Framework, Consolidated Debt Statement and Statement of the Nature and Fiscal Significance of Contingent Liabilities. The MTEF which resulted in the NGF’s assertion’s of irregularity, is the MTEF covering the period from 2014 to 2016 which the Presidency has forwarded to the National Assembly. The annual budget within those three years are expected to be based on these five components in the MTEF (Section 18 FRA). Let me quickly point out that though the budget is to be based on the MTEF, both are not synonymous with each other neither can they be used interchangeably. The MTEF is prepared by the Minister of Finance, who is expected to hold public consultations with the public and the press (albeit, as the Minister deems necessary) and seek the inputs of important agencies such as the National Planning Commission, National Economic Commission, the National Bureau of Statistics, Revenue Mobilisation Allocation and Fiscal Commission, etc.
The MTEF is to be prepared and presented to the Federal Executive Council (FEC) before the end of the second quarter of the year and should be laid before the National Assembly (NASS) four months before the next set of financial years which it covers. So let’s assume the financial year runs from January 1st to December 31st, the MTEF is to be presented to the FEC before June 30th and laid before the NASS not later than September 1st.
So what does this have to do with Nigeria’s federal structure (federalism)? By Section 2(2) of the Constitution of the Federal Republic of Nigeria 1999 (as amended), the grundnorm of the land states that Nigeria is federation consisting of states and a federal capital territory (FCT). Under Nigeria’s federal structure, power is shared between the central (federal) government and the various federating units (states). Each tier has its sphere of power defined by the Constitution and the law also acknowledges that there are areas of common interest between the federal and state governments. Little wonder the Constitution, itself, has a Concurrent Legislative List (containing items over which both the federal and state governments share legislative powers). In a nutshell, any issue that piths the powers of the central and states governments together is an issue touching on the federal structure of Nigeria and should be treated with utmost circumspect so as not to offend the spirit of the Constitution. How does this impact on our topic of discussion? Did the FG err and thereby overreached its powers when it forwarded the MTEF to the NASS without first consulting with the states?
The FRA provides expressly in Section 11 as follows:
“(1) The Federal Government after consultation with the states shall –
a. Not later than six months from the commencement of this Act, cause to be prepared and laid before the National Assembly, for their consideration a Medium-Term Expenditure Framework for the next three financial years; and
b. Thereafter, not later than four months before commencement of the next financial year, cause to be prepared a medium – term expenditure Framework for the next three financial years.”
To my mind, the implication of the above provision is that the FG must consult with the states when preparing the first MTEF and before laying same before the NASS and also do so when preparing MTEFs. This position is in line with the literal rule of interpretation- and the courts have said that where the words of a statute are clear and unambiguous they should be given their literal meaning.
The FRA does not anticipate that the States would prepare the MTEF. It only stipulates that the states be consulted with before it is laid before the NASS. One may argue that since the MTEF is a national framework and would be implemented solely by the FG, there is no practical need to consult with the states. That position cannot be supported in that the MTEF is for the betterment of the country as a whole not just for the FG but also to help improve the fortunes of the States. Also that would be against the spirit of the law.
One other provision in the FRA which supports the line of thought is that contained in Section 17. The Section provides that States and Local Governments which so desire shall be assisted by the Federal Government to manage their fiscal affairs within the medium term expenditure framework. This provision can be achieved when these governments are consulted during the preparation of the MTEF. They cannot express their desire to be assisted by the FG, when the latter ‘clandestinely’ prepares the MTEF and forwards same to the National Assembly. For the FG to forward the MTEF to the NASS without the input of the states would be an affront on the country’s federal structure. This is because the FG would have exercised powers solely on its own, whereas it ought to have exercise that power in conjunction (consultation) with the states.
The MTEF has become a very important pieces of document in the fiscal operations of this country. One the ways in which the FRA set up to achieve accountability and transparency in the nation’s fiscal operations is through necessary consultations before the MTEF for example, is put into use. So for any tier of government to overlook the other in the process of coming up with the MTEF is clearly against the spirit of the law and against the spirit of Nigeria’s federal structure.