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FG, states, LGAs spend N40 trillion in five years

By December 31, 2010, the three tiers of governments in Nigeria would have spent N40 trillion or more going by federal and states’ budget appropriations and statutory allocations to the 774 local councils since January 2006, according to Vanguard Newspapers’ checks.

The three tiers of government would spend at least nine trillion Naira this year. As at December 31, 2009, the expenditure stood at N31 trillion. The figure excludes local councils’ internally generated revenues, IGR and some supplementary appropriations by the state governments. In 2008, the councils got N1.05 trillion as statutory allocations from the Federation Account and about N1.2 trillion in 2009.

In the eight years up to 2007, the third tier of government received N3.3 trillion. According to the Federal Ministry of Finance, the Federal Government expects N6.04 trillion in revenue in 2010 and the Local Councils are expected to get about N1.5 trillion as statutory allocation. Federal and state governments’ budgetted N9.05 trillion for 2010.  The Federal Government proposed N4.079 trillion but the National Assembly increased it to N4.61 trillion, showing a hike of N528 billion.

Currently, President Goodluck Jonathan is seeking a downward review of the N4.61 trillion budget and has asked the National Assembly to do so. However, the country might end up with an upward review because the president has also requested the lawmakers to approve a N639.8 billion supplementary budget to address aeras that were inadvertently omitted in the 2010 appropriation. If approved, the 2010 federal budget will be N5.25 trillion.

In spite of the huge budgets, the citizenry have had little or no improvements on their well-being. Nigeria currently occupies the 130th spot on Transaparency International (TI) Corruption Index. Power supply is merely 3500 megawatts and so there is energy poverty. About 85 million persons, representing about 60 per cent of the population, have no access to electricity services. Less than 20 per cent of rural areas have some form of electricity service coverage and electricity consumption per capita is about 100kwh.

The United Nations Development Programme (UNDP’s) latest Human Development Index (HDI) report ranked Nigeria as 159th out of 177 nations, an indication of low levels of citizens’ standard of living, life expectancy and education. Over 50 per cent of the 144 million population lives in poverty, worsened by high levels of income inequality. Under-five mortality rate is 197 per 1000 live births and maternal mortality rate is 800 per 100,000 live births.

Will 2010 be different?

Given the fact that past budgets had little or no impact on the well being of the citizenry, questions are already being raised on whether or not the 2010 huge budgetary figures, running into billions and trillions of naira, would be different.

Only a couple of states achieved about 50 per cent budget implementation in 2009. At the Federal level, it hovered between 40-45 per cent.

An avalanche of reasons have been adduced for the failure of budgets in Nigeria. One of them is graft. According to the Economic and Financial Crimes Commission (EFCC), Nigeria lost over N500 billion to corruption in the last 10 years. Of this sum, the commission said that about N50 billion had been recovered as of June 2009.

Corruption is a major factor impinging on implementation of capital projects. Oftentimes, recurrent projects are implemented to the letter. The Chairman of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) said mid-last year that the country spends N1.3 trillion yearly on the emoluments of federal, state and Local Council political, public and judicial office holders.

The composition of Nigeria’s public servants is as follows: Federal Executive, 472; Federal Lawmakers, 469; State Executives, 2664; State Lawmakers, 1,152; Council Executives, 3096; Council Lawmakers 8692; and Federal/State Judiciary, 934 giving a total of 17,474.

According to reports, about 60 per cent or N19 trillion of the N31 trillion spent by governments at all levels in the last five years, was spent on recurrent expenditure.  Out of this princely sum, about N10 trillion was expended on the nation’s 17, 474 public servants or 0.012 per cent of the country’s 144 million population.

The remaining N11 trillion or 40 per cent of the budgets was spent on capital projects, which execution was a miserly 40 percent. The bulk of the unspent funds were allegedly looted or misappropriated.

House of Representatives Speaker, Dimeji Bankole said last July that about 65 per cent of funds allocated by the Federal Government for capital projects could not be accounted for nor traced.

Mr. Jide Ojo, a public affairs analyst hinged the problem with budget implementation in the country on Nigeria’s monoculture economy, deficit budgetting, delayed passage of the budget by the legislature and ineffective oversight by the National Assembly.

Other factors, according to him, are corruption, late budget releases by the relevant authorities such as the Federal Ministry of Finance, Office of the Accountant-General of the Federation as well as the Central Bank of Nigeria (CBN).

However, Second Republic Politician and one of the founders of the Peoples Democratic Party (PDP), Chief Guy Ikokwu, sees the problem as being systemic and structural. He thinks that a return to the parliamentary system or hybrid of the presidential and parliamentary systems of government would do the magic.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.