Legislative Procedure in Appropriation: An Appraisal

By Babajide Omoworare

After the Federal Executive Council (“FEC”) meeting of Monday October 16, 2023, the Honourable Minister of Budget and Economic Planning, Senator Abubakar Atiku Bagudu announced that FEC, presided over by His Excellency President Bola Ahmed Tinubu GCFR has approved the sum of N26.01 Trillion budget for the year 2024. He also disclosed that FEC has approved the 2024 – 2026 Medium Term Expenditure Framework (“MTEF”). The announcement of the approval of the MTEF signals the imminence of the budget process.

From my studied perspective, the MTEF is the prerequisite for the budget or appropriation process, which itself commences with the introduction of the Appropriation Bill, and forms part of the “Money Bills”. MTEF lays the foundation for the budget. The yearly appropriation ritual is a bespoke and unique legislative procedure, practice, proceeding and process. Whilst law-making simplicita and passage of ordinary/general bills seems explicit from the provisions of the Constitution, the rite of passage of an Appropriation Bill seems more peculiar and sui generis.

In this paper therefore, I intend to shed light generally on the process of passing an ordinary bill, situate the significance of the MTEF in the process of the appropriation bill, and broadly explain the process of passing an appropriation bill. I will thereafter distinguish the rite of passage of the ordinary bill from that of the appropriation bill, afterwards, I will conclude by making recommendations, including ancillary legislative efforts that could complement the appropriation bill.

Meanwhile, it is important to note at this juncture that the compliance with the provisions of the Constitution of the Federal Republic of Nigeria Act No. 24, 1999 Cap. C23 Laws of the Federation of Nigeria (“Constitution”), the Fiscal Responsibility Act No. 31, 2007 (“FRA”) and other subsidiary legislations like the Senate Standing Orders/Rules (“SR”) and those of the House of Representatives (“HR”) in this respect are sacrosanct. They are the legal and legislative framework governing the passage of an appropriation bill. Non-compliance may be adjudged by the law court under S. 4 (8) oof the Constitution as substantially or procedurally ultra vires (beyond the powers or done without proper authority) and the consequences are always dire for ordinary Acts, a fortiori, an Appropriation Act.

EXERCISE OF GENERAL LEGISLATIVE POWERS

S. 4 of the Constitution generally provides powers to both the National Assembly (“NASS”) and the State Houses of Assembly to make laws for “peace, order and good governance”, as long as it is within the legislative competence of the particular legislature, as enshrined in the 2nd Schedule to the Constitution. Ss. 58 and 100 respectively stipulate the mode of exercising the federal and states legislative powers with respect to general/ordinary bills. In the 2022 case of Nwokedi V. Anambra State Government & Anor (2022) LPELR-57033(SC), the Supreme Court decided that it is settled law that the power bestowed on the legislature to make, enact and pass laws is undiluted so long as any laws passed by it is within its legislative competence and authority.

The provisions of S. 58 of the Constitution, Chapter XI SR and Order XII HR have direct bearing on the passage of ordinary/general bills at the federal tier of government. Ordinary bills may originate either from the House of Senate or the House of Representatives, that is, from any of the 469 Federal Legislators [Os.76(2) and 77 (2) SR – private members’ bills] or from the President of the Federal Republic [Os. 76 (1) and 77 (1)(a) SR – government/executive bills] or from the Judicature [O. 77 (1)(b)]. Once a bill is introduced, it must go through three readings in each House before being passed. The first reading is the introduction of the bill, while the second reading is the consideration of the general principles of the bill. It goes through either committee of the whole or sent to the relevant standing committee(s) for fine-tuning. The third reading is the consideration and adoption of the bill, clause by clause. Once a bill has been passed by both chambers, it is sent to the President for assent. All bills must be passed by both chambers before being sent to the President for assent. Where a bill is presented to the President for assent, he shall within thirty days signify that he assents or he withholds his assent [S. 58 Constitution and O. 87 SR].

If the President withholds assent, he is said to have vetoed the bill. After the expiration of thirty days and the President does not signify whether he is assenting or not, NASS is at liberty to presume that he has vetoed the bill (pocket veto). The assent of the President shall no longer be required if the bill is passed again by each House by two-thirds majority. In the 2003 case of National Assembly V. The President, Federal Republic of Nigeria (2003) LPELR-10151(CA), George Oguntade, JCA (as he then was) utilising the literary canon of interpretation and giving S. 58(5) its ordinary natural meaning, stressed that this requirement has no correlation with the ordinary quorum of each house, which is one-third. He emphasised that the requirement of this provision is two-third of each of the whole of the Senate and the House of Representatives. Therefore, to override the veto of Mr. President in the Senate with membership of one hundred and nine Senators, two-thirds of the Senate amounts to seventy-three Senators and not two-third of Senators that are present at the sitting. The two-third majority requirement for the House of Representatives that is composed of three hundred and sixty members is two hundred and forty Honourable Members.

EXERCISE OF MONEY BILLS LEGISLATIVE POWERS

S. 16 of the Constitution sets out the economic objectives in Chapter II (Fundamental Objectives and Directive Principles of State Policy). The philosophy is primarily that the State shall harness the resources of the nation and promote national prosperity, efficient, dynamic and self-reliant economy. The State shall also among other provisions, promote planned and balanced economic development

The FRA was therefore enacted in 2007 to provide among other things, prudent management of the nation’s resources, and ensure long-term macro-economic stability of the national economy, secure greater accountability and transparency in fiscal operations within the medium-term fiscal policy framework. The FRA is meant to coordinate the national economic policy between various tiers of government, and facilitates the monitoring of government owned enterprises whose revenue and expenditure heads are not contained in the budget of the federal government.

S. 11 of FRA provides that the MTEF shall contain a Macro-Economic Framework setting out the macro-economic projections, for the next three financial years, the underlying assumptions for those projections and an evaluation and analysis of the macroeconomic projections for the preceding three financial years. The assumptions include, inter alia, the projected foreign exchange rate, projected non-oil revenue receipt including tax revenue projections, projected production of oil revenue per day and at what projected cost, etc.

The Fiscal Strategy Paper (“FSP”) shall among other things, contain the Federal Government’s medium-term objectives; its medium-term policies relating to taxation, recurrent (non-debt) expenditure, debt expenditure, capital expenditure, borrowings and other liabilities, lending and investment; the strategic, economic, social and developmental priorities of the Federal Government for the next three financial years; and an explanation of how the financial objectives, strategic, economic, social and developmental priorities and fiscal measures relating to the foregoing would be accomplished.

The MTEF and FSP therefore are analogous to carrying out a “foresight exercise” before the passage of the appropriation bill. A budget is an estimate of revenue and expenditure. It is not actual. It is however based on some calculated speculative parameters (i.e., MTEF and FSP) that are determined before the budget is laid. By virtue of S. 18 (1) of FRA, the laying of the budget is sequel to the approval of MTEF and FSP by NASS, in furtherance of a request for same by Mr. President. S. 14 of FRA provides that the MTEF shall be approved by resolution of each House of NASS. On Tuesday 31st October 2023, the 2024 – 2026 MTEF was transmitted by Mr. President to NASS for approval.

Instructively, S. 162 (1) of the Constitution, provides that money, with limited exceptions, accruing to the Federal Republic of Nigeria shall go into a special account called the Federation Account. Based on a pre-determined formula worked out by the Revenue Mobilisation, Allocation and Fiscal Commission, and approved by NASS upon receipt of same from the President, amount standing to the credit of the Federation Account shall be distributed among the Federal, State and Local Governments on such terms and in such manner as may be prescribed by NASS.

S. 80 of the Constitution establishes the Consolidated Revenue Fund of the Federation (Federal Government), into which the money accruable to it under S. 162 of the Constitution is paid. No money shall be withdrawn from this Fund unless as charged by the Constitution or as appropriated (and authorised) by Appropriation Act or the Supplementary Appropriation Act. S. 81(1) of the Constitution, provides that the President shall prepare in each financial year the estimates of revenue and expenditure and place same before the NASS (done in practice at joint session). Therefore, whilst the initiation of the budget is typically the function of the executive, the exercise of legislative power over appropriation bill and the authority to determine the spending of public funds principally resides in NASS, which gives authorisation to the President for the financial year’s estimates of revenue and expenditure from the Consolidated Revenue Fund. Even virement under S. 27 of FRA is subject to the approval of NASS and borrowings by government are also subject to the approval of NASS under S. 41 of the FRA.

The role of the National Assembly in the passage of “Money Bills” is spelt out under S. 59 of the Constitution, and O. 91 SR stipulates the procedure to be followed. S. 59 deals with passage of appropriation and supplementary appropriation bill or any other bill dealing with payment, issue or withdrawal of fund from the Consolidated Revenue Fund etc. and a bill imposing, increasing, reducing, withdrawing or cancelling tax, duty or fee.

In the main, the laying of the budget is tantamount to the 1st reading; the 2nd reading is a discourse on the financial and economic state of Nigeria and government financial policy; the appropriation bill is passed to the Appropriation Committee for further legislative action; all the standing committees become sub-committees before whom Ministries, Departments and Agencies (“MDAs”) appear to defend their various heads in the schedule to the bill; the standing committees in turn defend those heads before the Appropriation Committee that has wide latitude regarding its proceedings including conducting public hearings and inviting MDAs, Budget Office, Debt Monitoring Office, Central Bank of Nigeria etc. for clarification and elucidation. The Appropriation Committee afterwards submit its report to the Plenary that resolves into the Committee of Supply to approve the sums appropriated one head after the other. The budget is subsequently passed to the President for his assent.

In the unlikely event that within two months into the financial year, one House passes the appropriation bill and the other does not, or they pass different versions, S. 59 (2) of the Constitution enjoins the Senate President to convene the Joint Finance Committee of the two Houses to resolve the differences, within fourteen days.

It is not within the contemplation of the Constitution that the joint Finance Committee will be the Appropriation Committee or the standing Finance Committee of the respective Houses. The Joint Finance Committee is akin to the Conference Committee in the passage of an ordinary/general bill, which must consist equal numbers of legislators from the two Houses under S. 62 (3) of the Constitution and sits ad hoc, with the precise objective of resolving the logjam in the appropriation bill process, within two months into the financial year. The financial year is a period of twelve months beginning from 1st January in any year or as NASS may prescribe [S. 318 Constitution], being 1st January to 31st December [S. 1 Financial Year Act No. 2 1980 Cap. F27 LFN].

Under S. 62 (4) of the Constitution, NASS cannot delegate its constitutional responsibility and authority to make laws to a committee. The Supreme Court held in Attorney-General of Bendel State V. Attorney General of the Federation & Ors. SC/17/1981 that the Joint Finance Committee is merely a delegate of NASS and cannot validly usurp the legislative power of NASS. The Joint Finance Committee report is a recommendation as it cannot “pass” the appropriation bill. Just like an ordinary/general bill, the appropriation bill must be ‘passed” as envisaged under S.4 (1) – (3) and S. 58 (1) & (2) of the Constitution.

If the Joint Finance Committee fails to resolve the differences, the appropriation bill will be passed at a joint sitting of both Houses, it shall then be presented to the President for assent [S. 59 (3) Constitution]. If the President withholds assent to the appropriation bill, NASS may after thirty days, at a joint sitting pass the appropriation bill with two thirds majority vote and the assent of the President will no longer be required [S. 59 (4) Constitution].

DIFFERENCES BETWEEN GENERAL AND APPROPRIATION BILLS

The conception and proposition of an ordinary/ general bill can be done by any of the 469 Federal Legislators [Os. 76 (2) and 77 (2) SR], by the Executive [O. 77 (1) (a) SR and the Judicature [O. 77 (1) (b) SR. An appropriation bill however can only be tabled by the President S. 81 (1) Constitution.

The Clerk of either House does the 1st reading of the ordinary/general bill [O. 77 (6) SR], it is the laying of the appropriation bill by Mr. President that amounts to the 1st reading [O .9) (1) (b) SR].

O. 79 (1) SR provides that the debate during the 2nd reading of a general bill is centred on the general principles of the bill. The debate on an appropriation bill during the second reading is focused on the financial and economic state of the nation and the government’s financial policy [O. 91 (3) SR].

The quantum and strength in reasoning and persuasion of the debate at the 2nd reading stage of an ordinary/general bill determines whether the bill succeeds or otherwise and invariably whether or not the bill is “killed” at the 2nd reading stage. An appropriation bill must sail through the second reading as there is no provision in any law or rule that same can be “killed”.

After scaling the 2nd reading, the general bill is usually referred to the relevant standing committee or in some instances to a joint committee or the committee of the whole for fine-tuning [O 80 (1) and (2) SR]. In appropriation bill process however, the bill is sent to the Appropriation Committee, and all the other standing committees metamorphose into sub-committees under the Appropriation Committee [O 91 (4)(a) SR].

As soon as a standing committee lays and presents its report to Plenary, in the process of a general bill, the Senate or House of Representatives resolves into a Committee of the Whole for a clause-by-clause analysis of the bill. In the process of the appropriation bill, after the presentation of the committee report by the Chairman of the Appropriation Committee, the House of Senate or House of Representatives resolves into a Committee of Supply.

O. 22 SR provides that in the absence of the Senate President or the Deputy Senate President, a President Pro-Tempore may be elected among the Senators to preside usually over the proceedings of the day, including over an ordinary/general bill. Conversely, there is no provision for a pro-tempore presiding officer for an appropriation bill. O. 91 SR specifically provides that “The President of the Senate or in his absence the Deputy President of the Senate shall preside over the Committee of Supply”.

During the consideration of a general bill at the Committee of the Whole, the presiding officer is permitted to lump a number of relevant clauses together in putting the question whether those clauses shall form part of the bill, before “gavelling down” [O. 84 (1) SR]. This provision is also required to dispense with the long title, preamble, schedule etc. [O. 84 (5) SR]. However, for an appropriation bill, the Senate President or his deputy or the Speaker or his deputy has to “gavel down” on each head in the schedule of the budget, after putting the question whether a particular sum, for a particular head, shall form part of the schedule.

With respect to general bills and other legislative endeavours of legislators, it remains a contentious issue whether or not legislators can filibuster in Nigeria in view of O. 57 SR, which provides that “no dilatory motion shall be brought by a Senator or entertained by the President of the Senate”. Legislators can legitimately pause proceedings by raising “Point of Order(s)”. The foregoing explains why presiding officers are adamant in their request for the particular order under which a Legislator is soliciting a pause in proceedings and they adjure an adherence to the Rule. With regard to appropriation bill, it is incontrovertible that a point of order cannot be raised at all on the legislative day allotted to conclude the passage of the appropriation bill. The Standing Orders are emphatic that proceedings must not be interrupted on the legislative day allotted for the laying and the presentation of the report of the Appropriation Committee and the ultimately, the sitting of the Senate in Committee of Supply, O 91 (16) SR provides expressly that on any day upon which the proceedings on Appropriation Bill are to be brought to a conclusion, no dilatory motion shall be moved upon such proceedings and the proceedings shall not be interrupted or postponed under any Rule.

When different versions of the general bills are passed by both chambers of NASS, the respective presiding officers are charged by O. 86 SR to set-up a Conference Committee of equal numbers (usually six each in practice), some of whom had participated in the standing committee during the consideration of the bill. They cannot add or remove any provision in the bills as passed by the Houses, and can only deliberate on areas in dispute. If there are clauses in conflicts with or duplication with the Constitution or any extant Acts, they would revert same back to the Houses. In practice, they either adopt wholesale the position of a House or a preferable clause or the other of any of the Houses. On the other hand, if different versions of the appropriation bill are passed or the bill is passed by one House and the other House is unable to pass the bill within two months into a financial year, the Senate President is empowered by S. 59 of the Constitution to convene within fourteen days, the Joint Finance Committee of the two Houses to resolve the differences. If they are unable to so do, the differences would be resolved by simple majority in a joint sitting of both Houses.

The process of upturning the President’s veto is the last difference I will consider. If the President withholds assent to the general bill under S. 58 of the Constitution, the Bill may be recalled, reconsidered (1st, 2nd and 3rd readings) and passed by two thirds majority vote in each of the Houses of NASS. Contrarily, if the President withholds assent to an appropriation bill, the appropriation bill will be presented to NASS sitting at a joint sitting and two thirds majority of members of both Houses sitting at such joint meeting shall be required to pass the bill. Upon passage in both instances, the assent of the President shall be dispensed with forthwith and the bill shall become an Act.

CONCLUSION

There is no doubt that those at the helms of budget making and the bureaucrats in NASS have the wherewithal to ensure that a clean budget is produced. With respect to the expected output of the budget, the appropriation bill must be painstakingly combed to ensure that there are no duplicity and multiplicity of projects therein. Prioritisation of projects should also be undertaken so that projects that will improve the economy but are either abandoned or keep coming up in the budget as “on going” projects would be completed. To do otherwise will mean the projects will be continued and completed at exorbitant costs in view of the persistent inflation. NASS should also ensure uniformity in pricing of purchases appropriated for in the heads of all MDAs.

The compendium of financial implications accompanying lead debates of bills [O.76 (3) SR] can always be recalled during the defence by MDAs. The committee report of oversight, the statutory reports of MDAs, Annual Reports of Committees, and Public Accounts Committee Reports on audited accounts of MDAs are other tools that should assist the Appropriation Committee and its sub-committees during the appropriation process.

Be that as it may, two ancillary bills need to be passed in the 10th NASS to make the budgetary exercise worth its while and complement the efforts of the government and NASS in reducing corruption, saving costs and improving the outcome of the Appropriation Act. The first is the codification of the National Assembly Budget Research Office (“NABRO”), which is an existing parastatal in NASS, whose function is the research and scrutiny of budgets. Efforts in the past to pass a legislation that will make NABRO independent in its operation has been to no avail. Like the Congressional Budget Office in the Congress of United States, NABRO’s reports, have been insightful. Secondly, the enactment of the Audit Bill will give independence to the Office of the Auditor-General the independence required to make the Office more efficient. Attempts in the past to pass this bill has also been unsuccessful.

Ss. 88 and 89 of the Constitution have made ample provisions that will aid NASS to use its investigative powers in pursuance of its oversight responsibility. NASS is required to carry out this function to expose corruption, inefficiency, or waste in the execution or administration of laws within its legislative competence and correct any defects in existing laws. Conscientious, frugal and strategic use of the oversight and investigative powers of NASS remains a potent power of ensuring implementation and compliance with the provisions of the Appropriation Act and its schedule.

The essence of appropriation is to ensure that funds are provided to government to serve the people, impact on the lives and livelihood of the populace and ensure good governance in all its ramification. All the gamut of legislative framework regulating the procedure and process of budget making will go to nought if the fundamental objectives of achieving national prosperity and self-reliant economy as set out in S. 16 of the Constitution are not accomplished.

Omoworare was special advisor to the president on legislative matters.