Budget: Senate Moves To Scrap ‘Envelope System’ For MDAs

Senators have described the current budgeting process adopted by the federal government as “arbitrary” hence, come 2014, the Senate has signalled it would scrap the contentious ‘envelope system’ adopted by the finance ministry in arriving at budgets for government ministries, departments and agencies (MDAs) – signalling a showdown with the executive arm of government.

Also, federal lawmakers raised concern that the current national budgeting process makes the legislature less involved and at best reactive; relying solely on the information provided by the executive arm of government. Under the current arrangement, senators say there is an absence of a coherent and systematic means of exerting legislative control over fiscal decisions and priorities of the federal government.

The ‘envelope system’ which was introduced by the federal government in 2003 works by providing each MDA with a maximum amount for its capital and recurrent needs for the fiscal year. But with nobody assuming responsibility for rationalising the expenditure within a predetermined pattern, MDAs are left with money to spend as they wish, which is what senators are moving to change.

These were fallouts of a motion sponsored by Senator Olubunmi Adetunmbi (Ekiti/ACN) and 46 other senators titled “Call for review of national planning and budgeting process” and unanimously passed at yesterday’s plenary when put to a voice vote.

Adetunmbi in his lead debate clamoured for an open and inclusive national planning process which he said would strengthen the power of the parliament over public expenditure.

“The current annual incremental envelope-based budgeting being used by the Federal Ministry of Finance is arbitrary and not pro- growth and is one of the factors responsible for the slow shift from recurrent to capital-led annual budget in Nigeria.

“The country needs to have a stronger national planning function that provides a multi-year national plan and undertakes the necessary analysis of alternative planning scenarios, policies and strategies and bring together the line ministries, the private and voluntary sector as well as the international community into effective development partnership,” he stated.

0