Small Changes Can Improve Nigeria’s Budget Performance!
Though, when it comes to solutions, budget experts and pundits usually propound somewhat maximalist changes. Yes, budget is a complicated stuff and could be tough to tackle, but sometimes simple changes can make a big difference.
Some federal lawmakers in the opposition Peoples Democratic Party (PDP) jeered the president when he presented the 2019 budget on Wednesday. The lawmakers later explained they’d booed the president because the implementation level of the 2018 budget is poor.
The lawmakers making budget performance the crux of their anger may sound as dubious as it is childish, but it didn’t make any less serious the challenge of poor budget performance. Nigeria had posted every other year a budget performance below average, and this should concern all Nigerians in all political parties.
The factors that contribute to these poor budget performances are neither abstract nor far-fetched. As Itaobong Etim pointed out in his indicting January op-ed in The Nation: “It is the insincerity and propensity towards profligacy that make our budgets to be designed in a way that makes their effective implementation difficult.”
He went further to argue that corruption and the dependence on oil revenues are making it difficult to achieve set objectives. The other culprits he listed includes, extra-budgetary spending, poor revenue collection and remittance, defective procurement processes, poor administrative monitoring and weak legislative oversight.
The factors are apparently many and deep. But there are also policy and legal frameworks that can be applied to deliver an above average budget performance.
Though, when it comes to solutions, budget experts and pundits usually propound somewhat maximalist changes. Yes, budget is a complicated stuff and could be tough to tackle. But sometimes simple changes can make a big difference. Here are some simple changes that can improve budget performance:
First, the executive must ensure timely presentation of the appropriation bill for legislative consideration. It must be at least three months to expiration of the operational fiscal law. That way, legislators will have a full three months to exhaustively deliberate and pass the fiscal bill for presidential assent.
Second, reduce the overwhelming bureaucracy in the budget process by scraping the Ministry of Budget and National Planning and transfer its budget preparation and monitoring functions to the Office of Budget of the Federation in the presidency.
Third, improve the transparency in the budget process by empowering the director general, Budget Office of the Federation the sole authority to add or subtract from the budget before and during legislative consideration. This way, issues of budget padding and tinkering of figures can be minimised. Among other benefits, this would lead to transparency in budget preparation and a stricter presidential monitoring. And, of course, the person to be held responsible for the contravention of budget padding would be open secret.
Fourth, ensure that all MDAs (including self-funded) must have their annual budget submitted through the Office of Budget of the Federation. Also, they must be presented for legislative approval by the president along with the annual budget. This entails deepening and consolidating the requirements in the recent presidential directive on this matter. If government fails to rein in the excess of these self-funded agencies, they’ll eat our resources for infrastructure for lunch.
Fifth, ensure that every capital project in the budget have an Executive Timeline requiring the ministers in charge to submit a memo to the Federal Executive Council (FEC) for deliberation and approval of funding. This would ensure that all capital projects in the budget have an opportunity to be laid for FEC consideration within that budget’s lifetime.
Sixth, the need for monitoring of public sector expenditures. One way to achieve this is to establish an Audited Single Expenditure (ASE) Account managed like the Treasury Single Account (TSA) warehoused in the Office of the Auditor General of the Federation. This platform will enable the government to monitor all current and capital expenditures from N1 to N100 zillion. The platform would provide real time information of every payment made by MDAs to forestall extra budgetary expenditures.
Seventh, a proactive war on corruption by ensuring a periodic, regular and compulsory declaration of assets by public officials. This includes attaching evidence of annual asset declaration as part of requirement for promotion in the civil service. And a law or an executive order for a compulsory annual declaration of asset of appointed and elected public office holders is put in place and enforced.
Eighth, strengthen transparency in revenue collection. Earlier this year; a forensic audit by KPMG reveals more than N8 trillion was not remitted to government by Government Owned Enterprises (GOEs). Government must be serious in its directive for MDAs to enroll in the TSA; and the Government Integrated Financial Management Information System (GIFMIS).
Last but not least is to diversify the country’s revenue sources. This will divorce the country from the volatilities in the international crude oil prices. In this regard, there will be continuous improvement in the ease of doing business. It will help to grow the small and medium enterprises (SMEs) in the country. Also, it will attract foreign direct investment.
In tweet summary: revenue leakages; limited revenue sources; corruption; and bottlenecks are the fundamental challenges that requires urgent attention and strategic reforms.
Now, I understand that federal budget is complicated and there are really no quick fixes. Achieving full budget implementation obviously is way more daunting than I’m making it appear. But as Winston Churchill famously said: “To improve is to continuously make small changes”.
- Miebara Jato is an Instructor at the Nigerian College of Aviation Technology, Zaria.
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