One of the worrisome features of public finance system in Nigeria is the inability of all tiers of government to achieve efficient budgeting such that revenue accruals as projected in yearly budgets match or surpass projected expenditures, thereby leaving room for development on a sustainable basis
A cursory appraisal of Nigeria’s budgeting processes at national and sub-national levels over the years showed clearly that successive administrations, primarily due to lack of fiscal prudence, have been unable to achieve capital budget targets despite unbridled borrowing from all sorts of lenders as the years roll by.
Curiously, the unimpressive performances of the yearly budgets of federal and state governments happen even when several months had been committed to computational analysis of income and expenditure potential of the tiers of government by ‘acclaimed’ financial and planning experts in the Ministries, Departments and Agencies (MDAs).
For instance, at the federal level, the Medium Term Expenditure Framework and the Fiscal Strategy Paper (MTEF/FSP) requires that the Executive presents yearly Appropriation Bills to the National Assembly within a reasonable time before the commencement of a fiscal year to enable the Legislature have all the time to consider critically the proposed allocations before passage. This is also captured in Section 81(1) of the 1999 Constitution (as amended).
The importance of the MTEF/FSP to efficient budget planning can hardly be over-emphasised in the yearly ‘rituals’ of budgeting. Specifically, the MTEF/FSP captures the economic context in which any budget will be presented, together with fiscal policy objectives and spending priorities of the government over a medium term, usually for three years. In addition, it spelt out in details the plans for achieving government’s defined objectives, and highlights the key assumptions underpinning revenue projections and fiscal targets and the potential fiscal risks over the medium term.
Ironically, despite the existing legal and other documentary frameworks guiding the budgeting processes, the ‘normal’ delay in passage of Appropriation Bills, poor revenue projections, misplacement of project priorities by the tiers of government, over-bloated civil service structure as well as the most destructive ‘virus’ in the public finance system – corruption – have turned laudable objectives of yearly budgets into mere pipe dreams.
Reflecting on the performance of the 2018 budget in which the Federal Government recorded a fiscal deficit of N3.4 trillion a few weeks ago, the Minister of Finance, Hadjia Zainab Ahmed, blamed the poor performance on revenue shortfall, admitting that more effort is required to prop up the non-oil revenue generation. At the sub-national level, even in Lagos, it is the same singsong as governors hardly meet their yearly revenue projections.
As it is generally, the prolonged years of deficit financing at all tiers of government have taken and continue to take huge toll on the nation’s socio-economic development projections with decaying infrastructure, burgeoning unemployment, deepening poverty and insecurity hallmarking the nation’s landscape.
Except for a few in political authority and their parasitic collaborators in the public service that are benefitting from the flawed budgeting system, millions of ordinary Nigerians whose interests the budgets are expected to serve, at least legally speaking, don’t have anything to show as dividends of governance till date.
This, therefore, explains the need for a holistic re-jiggering of the nation’s budgeting processes with a view to ensuring that value is derived from the public finance system through effective implementation, monitoring and evaluation of the performance of yearly budgets across the three tiers of government.
To achieve this, we feel that the first step should begin with the national and state legislators de-emphasising party politicking in the passage of Appropriation Bills, a phenomenon that has made timely passage of Appropriation Bills and implementation of passed budgets impossible over the years.
As elected representatives of the people, our lawmakers should see the welfare of the citizenry as the primary purpose of their political engagements as leaders. For instance, a situation in which a budget is passed midway into a fiscal year, as we usually have it now, is not desirable to economic development of the country.
Beyond the legislative roles in the budgeting processes is the more fundamental challenge of unquantifiable wastages that are associated with the over-bloated public service structure which creates room for many MDAs to be performing over-lapping functions.
For instance, at the federal level do we really need a National Orientation Agency (NOA) when the Ministry of Information and Culture is functionally active? Or do we have to create pilgrims welfare agencies or commissions and keep funding them with taxpayers’ money when Nigeria remains a secular state?
Better still, what is the Voice of Nigeria (VON) doing that the Federal Radio Corporation of Nigeria (FRCN) cannot handle professionally and possibly, more efficiently?
As has been pointed out by domestic and international analysts, the penchant for duplication of agencies in the public service, which is not peculiar to the federal level alone, remains a major waste pipe to our collective efforts aimed at achieving development through yearly budgets. This must change!
We feel very strongly that if the existing duplicated agencies are streamlined such that the incidence of over-lapping roles is avoided or minimized to the lowest level, billions of Naira which are being used to run such agencies now will be saved. Merging the MDAs can help tackle two of the biggest challenges undermining our national developmental strides – the huge infrastructure gap and the burgeoning unemployment in the country.
It is also desirable that the Monitoring and Evaluation (M&E) mechanisms in yearly budgets should be strengthened by the tiers of government by involving independent civil society organizations (CSOs) in the M & E activities. Yes, the CSOs may be seen as usually too inquisitorial in their demand for efficient budgeting but their roles is critical to good governance, accountability and transparency in budgeting generally.
In the final analysis, it is our candid opinion that if political leaders adopt the best global practice in handling our yearly budgets, succumb to the growing agitations by the citizens for reasonable reductions in their pay and allowances and embrace transparency and accountability in the public finance system, the sure way of positioning the country on the path of sustainable development would have been charted.