Sunday, December 6, 2015

An advisory on Nigeria's 2016 budget

On November 19, 2015, I moderated at the public presentation of Nigeria’s 2015 Open Budget Survey report. The event held at Barcelona Hotel, Abuja had in attendance participants from the civil society groups, media and representatives from some government ministries, department and agen­cies. Among them were the Central Bank of Nigeria, Fiscal Responsibility Commission, Office of Auditor General of the Federation, and Bureau of Public Procurement. The 2015 Open Budget Survey was conducted by the International Budget Partnership across 102 countries. The outcome of the opinion survey as regards Nigeria shows that the country has a long way to go in terms of open budgeting.
The survey was held on three pillars. They are budget transparency, public participa­tion and oversight. On transparency, that is, Open Budget Index, Nigeria scored 24/100. This shows that the government of Nigeria provides the public with minimal budget in­formation. Similarly on Public Participation the country got 25/100. This implies that the government of Nigeria is weak in providing the public with opportunities to engage in the budget process. On Budget Oversight the country performed fairly well as our legisla­ture got 67/100. This shows that budget over­sight by the legislature in Nigeria is adequate. On the other hand, budget oversight by the supreme audit institution (e.g., Office of Au­ditor General of the Federation) in Nigeria is limited. Oversight by auditor is put at 50/100.
Budget issue at all tiers of government in Ni­geria is very contentious. Perennially, it pitch­es the executive against the legislature. The ex­ecutive arm oftentimes wants the budget to be passed by the legislative arm as it is present­ed to it. The parliament will have none of that. Members of parliament are quick to point to the constitutional powers granted them over public funds in section E (80 – 89) of the 1999 Constitution as amended, particularly sections 81 and 88 of the ‘grundnorm’. The areas of dis­agreement between the legislative and execu­tive arms of government over the years have been in relation to budget performance par­ticularly capital budget. Many a time the re­current expenditure is fully drawn while cap­ital budget released is abysmally low usually not more than about 40 per cent. Other grey areas include budget benchmarks especially the exchange rate to be used for the budget planning. There is also the issue of envelope (amount) earmarked for each of the Minis­tries, Departments and Agencies. Many of the MDAs helmsmen though are invited for budg­et defence, yet they do behind the scene lob­bying of the relevant committees of the Senate and House of Representatives. The lobbying is either to ensure that the amount prescribed for them is passed or increased. We have had in the past ‘bribe-for-budget’ scandals.
Most times governments in Nigeria chris­ten their budgets. You’ll hear such vacuous labeling such as ‘Budget of Hope’, ‘Budget of Consolidation’, ‘Budget of Development’ etcet­era. I do not know where that tradition comes from. What I do know for a fact is that budget­ing in Nigeria has been turned to hollow ritual of fulfilling all righteousness. Researchers and investigators have come out with damning re­ports about a lot of extra-budgetary or non-appropriated spending by the executive arm of government. In Nigeria, Appropriation Acts are observed more in breach. Sad, very sad!
That is the more reason budgets have not translated to development in Nigeria. It is an open secret that irrespective of what is appro­priated for most of the MDAs not the entire sums are cash-backed. Granted that budgets are mere estimates, however, failure to fully implement budget should be an exception rather than a rule that it has become in our clime. Until the recent introduction of Treas­ury Single Account, many of the income generating parastatals of government retain money collected and fail to remit such to the federation account as at when due. When they eventually do, they would have unilater­ally and arbitrarily deducted their purported share of the money. This they do without the requisite legislative approval. Before govern­ment issued circular asking MDAs to return all unspent budget to government treasury, the practice used to be to roll over such un­spent funds into the new financial year. This was greatly abused.
Well, all the aforementioned are in the past. There is a new sheriff in town, a new party and government at the helms of affairs at the fed­eral level as well as majority of the states. Are we likely going to see things being done dif­ferently? It remains to be seen. The little I have observed is uninspiring. We’re into December and the Fiscal Strategy Paper and the Medi­um Term Expenditure Framework have not been passed by the National Assembly. The 2016 budget is not even in sight. This perpet­ual lateness impact negatively on budget per­formance. To the best of my knowledge, it is only in 2012 that the government of former President Goodluck Jonathan presented the 2013 appropriation bill in October (precise­ly on October 10, 2012). All other years, they were presented to the National Assembly in November or December. This is unhelpful. Budget ought to be submitted to the legisla­ture around September so that they can do thorough scrutiny and pass it in good time for implementation from January 1 of the fi­nancial year.
As regards 2016 budget, we have heard that it is going to be zero-budgeting where each of the MDAs will have to justify every items budgeted for. Well, I wait to see how well it will be done. However, areas I want govern­ment to focus are on infrastructure develop­ment, security, employment and diversifica­tion of the economy. Some largely untapped money spinners or goldmines include: Sports, Tourism, Agriculture and Solid Minerals. It is important for President Muhammadu Buha­ri to also unveil its economic blueprint so that the private sector would know the fiscal policy direction of the government. While we often focus deservedly on the federal government when we talk about budget, it is important for civil society organisations to beam their klieg lights and searchlights on the states and local government areas. I know there is Centre for Social Justice and Niger Delta Budget Mon­itoring Group; similar groups are needed in all the other five geo-political zones and in­deed in each state.
Jide is the Executive Director of OJA De­velopment Consult, Abuja. Follow me on twitter @jideojong