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Antics of govt budgeting in Nigeria

By Tonnie Iredia

When the present cabinet was being put together by President Goodluck Jonathan, many of us looked forward to stars who would gain public acceptance at the mere mention of their names.

Although that did not happen as a few not- too- well- endowed ‘federal character’ nominees still scaled through, we cannot but admit that on the whole the President made some good effort to get seasoned professionals on board. Indeed, for us nosy- journalists, the picking of Reuben Abati, who is obviously one of our very best virtually silenced us.

The appointment of the celebrated financial guru, Dr. Ngozi Okonjo-Iweala as Minister of Finance and Coordinator of Nigeria’s Economic team, is, however, probably the best evidence that transformation is coming. Thus while we are ready to give all the ministers a chance to shine by turning the nation round, the focal point is Okonjo-Iweala.

We are optimistic that she will do well because she is returning to a beat where she excelled before. Yes, it was she, who in October 2005 led a team which struck a deal that cancelled our $18 billion external debt. Before that feat, Nigeria spent about $1 billion every year just for debt servicing without reference to the principal sum owed.

We are, therefore, justified in our over-confidence that Okonjo-Iweala qualifies as the messiah we have been waiting for to straighten our nation’s wobbled economic disposition.  Against this backdrop, it is clear that it is we who should take tutorials on economics from Ngozi but she needs to hear of some of our experiences.

First, Nigeria hardly runs a budget. We hear the one for 2011 is on now but it was as usual not so for the first half of the year. And that has been the pattern for years. Why we always have a delayed budget cannot be exhausted in this article.

Sometimes, it could be due to ‘communication gap’ between the executive and the legislature while at another time it could be some other thing in the continuing game of uncoordinated public expenditure. There was even a time when the budget could not be concluded because the two chambers of the National Assembly suddenly became unable to agree on the venue of a joint session for the event.

Suffice it to say that operating without a budget is perhaps one of our intractable problems in this country.  It is an issue that we suspect can unsettle Iweala’s performance if care is not taken. It will be recalled that during her first coming, there was ‘envelope budgeting’ by which the total budget of a sector was put in an envelope for the operatives in such a sector to share. It ended up as a strategy for ministries to perpetrate fraud.

What some ministers did was to take hold of the envelope, appropriate whatever fraction to the ministry and disburse the balance like hand-outs to the departments and parastatals in the sector on the basis of which of them had the potentials of making good returns to the leadership of the parent-body.   In this way, a ministry got more funds for supervising an assignment than those to execute it. In our days in the information sector, there was an interesting scenario in which the ministry allocated to itself N300, 000,000 to renovate its headquarters.

Interestingly, the ministry operates from within a complex known as ‘Radio House’ in Garki, Abuja, which belonged to one of its parastatals- the Federal Radio Corporation of Nigeria (FRCN). If renovation was actually necessary why was it not the landlord- FRCN that got the provision for it? Of course, it was just a façade to divert funds because office renovation is virtually irrelevant to the sector’s job of public enlightenment in a nation with high public cynicism.

In another country where sincerity of purpose matches action, envelope budgeting would not present our kind of problem. It does for us because self-serving operatives always overturn sound principles and modalities.

In addition, our people are fond of mixing rules and methods with goals. This is why for long budgeting in Nigeria has become an annual ritual making it virtually impossible for our public bodies to be viable.

The ritual takes the following pattern: an organisation prepares a budget proposal; several months later, the legislature in its own wisdom with or without reference to what informed the proposal moderates the budget and approves it; then another authority makes a decision on what fraction of the supposedly approved budget is to be released; yet another authority decides on whether or not due process has been followed in the award of the contracts for the proposed projects; all of this takes no less than three quarters of a year leaving the public bodies with exceedingly short period to implement the budget; and then while all hands are on deck to rush a few assignments at the tail end of the year, a circular emerges with a directive that all unspent funds be returned to the treasury. This arrangement cannot but invite sharp practices.

Then, there is the issue of unrealistic budgeting.  Here, let us recall the testimony of Adeseye Ogunlewe, former Minister of Works who at the Senate Ad-hoc Committee which was ‘investigating’ works in the transportation sector in 2008, revealed that an amount which can fix only one road is usually deliberately assigned to several roads.

Using the Sagamu-Benin Road as a test case, he maintained that the figure allocated to the road in the 2008 budget had “no correlation” with the requirement for fixing the road, adding that “spreading small sums to too many roads in a zone will not lead the nation anywhere.”  No wonder that road is ever under repairs. The testimonies of unrealistic budgeting in other sectors have over the years been the same. The fear now is that even if Dr. Iweala evolves a therapy for all that we have said so far, will it extend to cover the recurring dismal implementation of our budgets?

In November 2009, the Senate speaking through Senator Ayogu Eze argued that most of the projects earmarked in the budget were not implemented “because civil servants in ministries, departments and agencies,MDAs, lack the capacity to implement the budgets and appropriations they ask for every year.” Unfortunately the Senate did not explain why on a yearly basis, it approves for MDAs budgets which they can allegedly not implement? The truth is that the system is full of antics which explains why the legislature is forever setting up probe panels to expose only past misdeeds. Why are even fractions of the revelations never ‘smelt’ at all during over- sight functions?

Anyway, this article should not go too far away from welcoming back Mrs. Okonjo-Iweala to her former beat. We hope that when she begins again with tightening the belt and using such transparent strategies like publishing each state’s monthly financial allocation in the newspapers, she will this time be allowed to complete her tenure.


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