ALDRAP issues pre-action notice to Rivers Assembly, demands compliance with budget procedure or face legal action

The Association of Legislative Drafting and Advocacy Practitioners (ALDRAP) has issued a pre-action notice to the Speaker and members of the Rivers State House of Assembly urging them to comply with the legal steps for enactment of the 2025 Appropriation
Bill of Rivers State Government as stipulated in the Constitution of the Federal
Republic of Nigeria, 1999.

ALDRAP, a professional association of lawyers whose members are staff of the National Assembly and State Houses of Assembly in Nigeria and other African legislatures warned that failure to comply within seven days of the notice will result in a litigation.

Full text of the letter reads:

Rt. Hon. Speaker,
Rivers State House of Assembly,
Port Harcourt,
Rivers State.

Dear Rt. Hon. Speaker, Sir,

PRE-ACTION NOTICE RESPECTING ULTIMATUM FOR RE-SUBMISSION OF THE 2025 ANNUAL BUDGET OF THE RIVERS STATE GOVERNMENT OF NIGERIA.

By way of re-introduction, Association of Legislative Drafting and Advocacy Practitioners-ALDRAP are a professional Association of lawyers whose members are staff of the National Assembly and State Houses of Assembly in Nigeria and other African legislatures.

We write to urge both your good self and members of the Rivers State House of Assembly to comply with the legal steps for enactment of the 2025 Appropriation Bill of Rivers State Government as stipulated in the Constitution of the Federal Republic of Nigeria, 1999.

In the event that within seven days of this letter you fail to comply, we shall instruct our lawyers to take legal steps to urge a court of law to compel your compliance.

For the avoidance of any doubts below are the relevant provisions of the Nigerian
Constitution and other relevant laws and procedures as follows:

Both the Rivers State House of Assembly and His Excellency Governor Fubara ought to comply with the legal steps prescribed in accordance with Chapter 5. Part 2. Section 122 of the Constitution of the Federal Republic of Nigeria, 1999 regarding Authorization of expenditure in Appropriation Bill in respect of any financial year has not been passed into Law by the beginning of the financial year.

The steps are as follows:

Assuming that the Governor Fubara is constitutionally bound to re-submit the said 2025 budget to them, then the due process requires a series of preliminary steps.

Below are the legal steps regarding submission of the annual budget to the State
House of Assembly (using information found on the website of Enugu State) is as
follows:

BUDGET PREPARATION

Ministry of Budget and Planning (MoBP) provides the mechanism to ensure appropriate and transparent allocation of public resources among competing priorities during budget reparation stage.

Annual Budget Call Circular

The formal budget preparation process starts with issuance of annual budget call circular to all Ministries, Departments and Agencies (MDAs) of government. The call circular shall include the following:

1. Economic and fiscal outlook of the State for the fiscal year;
2. Aggregate spending limit (stating planning and contingency reserves);
3. A summary of the State’s budget policy thrusts;
4. Government-wide priorities;
5. Explanations and guidelines on projects and programmes in the State
   Medium Term Sector Strategies (MTSS) and Medium-Term Expenditure
   Framework (MTEF);
6. Sector Spending ceiling;
7. Form and format of the budget estimates;
8. Input spending boundaries (e.g., capital versus recurrent and personnel
   versus overhead costs);
9. Guidelines for preparing recurrent expenditure (Particularly personnel
   costs);
10. Budget classification and chart of accounts (BC & CoA) in line with
    International Public Sector Accounting Standards (IPSAS) requirements;
11. Instructions for completing the budget forms; and
12. Detailed time table for submission of proposal and bilateral discussion.

The time of issuing the call circular is very critical for early presentation of draft
annual budget to State House of Assembly (SHA). Against this background, the
call circular shall be issued on or before the date specified in the budget timeline.

Preparation of Budget Proposals by Spending Units

The Ministries, Departments and Agencies (MDAs) on receipt of budget call
circular are required to prepare detailed budget proposal for submission to the
Ministry of Budget and Planning. The MDA proposal is expected to:

1. Be in the approved form and format;
2. Apply the proper budget classification and codes in line with IPSAS
   requirements;
3. Have a qualitative presentation of their budget submission;
4. Integrate recurrent and capital expenditures.

To produce the budget proposal within the time frame, each MDA or main
organization is expected to:

1. Constitute MDA budget sub-committee (to be chaired by Permanent
   Secretary in the case of a Ministry);
2. Send copy of the budget call circular or ministerial (main organization)
   circular to all sub organizations calling for their proposals;
3. The sub organization would prepare detailed proposal in accordance with
   the approved form and format;
4. The sub organization would also prepare a qualitative presentation of the
   Budget;
5. The Ministry (or main organization) budget sub-committee would review
   the submissions from all sub organizations.

Where an MDA may not have the requisite in-house technical manpower to
prepare their proposals in line with the required format, especially with IPSAS
based BC & CoA, the MoBP will on request, provide technical support to such
MDA during budget preparation. The technical support may be in the form of:

1. Visit to the MDA to ensure that their budget proposal is being prepared in
   line with the above requirement;

Specific training for budget staff in MDAs where the staff lack proper
knowledge of the requirements, or a member of the technical support team
leading the process in the MDA.

Integrating Annual Budget

The process of integrating the annual budget is primarily interactive in nature.
The aggregate resource envelope is first determined. The personnel and operational cost estimates are computed and deducted from the aggregate spending limit and the balance is considered as the capital development fund.
The total capital expenditure is estimated and would consist of capital projects and programs. The fresh capital investment for the fiscal year would attract additional recurrent cost estimates, which adequate provision should be made in each MDA. The additional recurrent cost implication of fresh capital investment should be computed by line item (or economic input) and added to the personnel costs and recurring operating cost estimates.

To ensure full integrated annual budget estimates, it must take into account additional recurrent costs arising from the new capital investments, e.g., the procurement of new power supply generating plant would, of course require additional supplies of fuel and engine oil, labour in the form of skilled operator or attendant, routine and scheduled maintenance costs during the fiscal year when it is installed. These costs should be taken into account during the fiscal year budget preparation.

Bilateral Discussion

The MoBP and ESEPC on receipt of budget proposals (capital and recurrent from,
MDAs would carry out joint bilateral discussion/negotiation with MDAs on their
proposals. The essence of bilateral discussions is as follows:

1. Review the proposals with MDAs to ensure consistency with approved
   proposal completion guidelines;
2. To ensure that the MDAs complied with the input spending boundaries;
3. Review the personnel and over-head input and its compliance with State
   government overall recurrent expenditure policy (particularly the
   personnel profile)
4. To test the strategy, projects and programmes consistency with the State
   budget policy as well as sector policies.

Review and judge the reasonableness of the costing mechanism of projects
and programmes in the proposal.

6. Where necessary allocate additional resources from the planning reserve
   for funding important projects and programmes not covered within the
   MDAs’ resource envelope (expenditure ceiling); and
7. Review of MDAs’ performance indicators and method of measuring output
   and outcome to ensure consistency with State approved system.

Consolidation of Draft Budget and Review by EXCO

MDA budget proposals would be consolidated by the MoBP, incorporating
amendments and adjustments based on the bilateral discussions.

The consolidated proposals will be presented to the EXCO for review. The EXCO
would ensure that the draft budget estimates reflect the following:

1. State Budget policy thrusts as well as sector policies approved by EXCO at
   the annual budget planning level; and
2. Trade off and balance of interests agreed at both political engagement and
   consultative processes with assembly members and stakeholders
   respectively.

Presentation of Draft Budget to House of Assembly

After review of the consolidated proposals, the Governor will present the draft
budget to the State House of Assembly as an appropriation bill within the timeline as specified in annex 1 of this manual. The state appropriation bill is composed of:

1. The budget message of the Governor; and
2. The draft state budget.

The budget message of the Governor includes:

1. The statement of the Governor on the main directions of socio-economic
   development and fiscal policies in the coming financial year and if required,
   the draft bill to ensure the implementation of the proposed budget;
2. Highlighted review of the previous budget performance; and
3. Explanatory note on the draft of the State proposed budget.

The Explanatory note is a complete set of documents, justifying the State
proposed budget which includes:

1. Justification of planned state budget revenues, expenditures and
   deficit/surplus, including the interest rates and maturities on loans
   borrowed for financing of the deficit, as well as trend analysis of the
   mentioned budget elements;
2. Basic assumptions adopted in determining the budget;
3. Trend analysis of planned state budget revenues, expenditures and
   deficit/surplus on the basis of actual figures of the previous financial year
   and confirmed figures of the current financial year;
4. Justification of state budget revenues expectations in the proposed draft
   with a breakdown per “allocations from the federation account”, “tax”,
   “non-tax” and “other” revenues;
5. Justification of the proposed state budget appropriations, for each line of
   budget classification, identification and justification of the nature and the
   amount of budget credits and guarantees, identification of the basic norms
   for calculation of budget expenditures;
6. Justification of budget appropriations for financing of targeted
   programmes, with indication of the programmes: legal basis, substance,
   tasks and objectives and phases and timing of implementation;
7. Costing methods used and bases of determining the cost of capital
   investments;
8. The structure and trend analysis of external and domestic loan as well as
   grants on the basis of actual figures of previous financial year and estimated
   figures of current financial year
9. Justification of the appropriations budgeted for generation of
   contingencies fund;
10. Information on proposed appropriations against the original budget
    requests;
11. Information on personnel expenditures of budget financed ministries,
    departments and agencies and trend analysis of this information based
    upon the corresponding figures of the last financial year, and the estimated
    figures of the current financial year as well as information on the actual
    number of employees; and
12. Any other information, which the state Executive finds essential for
    justification of the draft State Budget.

Review and Approval by the STATE House of Assembly (SHA)

The SHA is responsible for officially enacting the budget- or approving it at the
formal legal level. The steps include:

1. The Executive formally proposes the budget to the House of Assembly (The
   public presentation by the Governor is regarded as the first reading of the
   Appropriation Bill)
2. The second reading and thereafter the bill will be referred to House
   Committee on Appropriation and other committees for discussion;
3. Discussion of the budget may involve public hearing, discussion with the
   MDAs and votes by House Committees;
4. Presentation of report of the House Committee on Appropriation to the
   House (referred to as the third reading); and
5. Final deliberation and passage of the Appropriation Law.

Assent by the Governor

The approved budget will be presented to the Governor for his assent. Assent
involves the Governor appending his signature to the passed bill to make it a law.”

Yours faithfully,
For: IBUCHIM CHAMBERS

K. A. Amadi Esq.