Government Budgets in Nigeria: Who benefits?

The Nigeria government is under a constitutional obligation to make a budget every fiscal year. The budget simply put is a statement of income and expenditure and an indication of the government’s expenditure priorities for the year. The budget is the most important economic policy instrument for governments. It reflects a government’s social and economic policy priorities more than any other document. It translates policies, campaign promises, political commitments and goals into decisions on where funds should be spent and how funds should be collected. A well-functioning budget system is vital to the formulation of sustainable fiscal policy and facilitates economic growth. In Nigeria, our economic problems are exacerbated by the weak budget systems in all tiers of government and faulty budget choices.

While a government’s budget directly or indirectly affect the life of all its citizens, frequently poor people are affected the most. They are harmed the most by weak economic growth and high inflation. The current well-being of the poor and their future prospects also can hinge on expenditure decisions in areas such as health and education. Even when funds have been allocated to poverty reduction programmes, weak expenditure and programme management, and the lack of political power among the poor, can mean that the money never reaches the intended beneficiaries. This has been our lot in Nigeria.

The budget system and process in any country are central in determining the extent to which it has an open, democratic and participatory system of government. In Nigeria, the general absence of information on budget issues, particularly in accessible, non-technical forms, has seriously hindered the efforts of national and local organizations and other stakeholders to participate in the discussion on the distribution of public resources.

A rights based approach to budgeting involves making budget provisions with a view to realizing the constitutional human rights commitments and for the fulfillment of the commitments made by Nigeria under various international human rights treaties. The Nigerian government has not adopted this approach yet.

Every year, Nigerians hear of trillions of naira budgets by all tiers of government. But at the end of the year, our people are always at a loss as to where the monies were invested. Budgets that were described by government in laudable terms usually end up resulting in decreased standard of living for the average Nigerian. Accusations of disregard for the budgets, late passage of the budgets, selective implementation of budgets, and late release of the capital votes have been the norm among the actors in the legislative and executive arms of government and other stakeholders. The fact that government budgets in Nigeria have consistently failed over the years, seem not to be in contention. One assumes that the fundamental question we need to ask ourselves is; why have government budgets in Nigeria continued to fail? Our ability to find sincere answer to this question is a major step in any genuine effort to improve the standard of living of our people. One is of the opinion that the main reason for the (s)election of political office holders in Nigeria, is to enact and implement four budgets, one for each of the four years they will be in office. The appropriation act is an act that must be enacted every year. With the exception of the appropriation bill, all other bills under the consideration of the legislative houses are essentially incidental and can be delayed for as long as the legislators wishes. They may even decide not to pass such bills into law within their legislative term, as had happened to the Freedom of Information (FOI) bill at the National Assembly (NASS) within 1999 to 2003, and what is likely to happen to the same bill in the same NASS within 2007 to 2011, if current indication is anything to go by. This is just to emphasize how important the budget is, as provided for in the 1999 Constitution of the Federal Republic of Nigeria and in reality. Unfortunately not many of us ordinary Nigerians understand and appreciate the close relationship between the government budgets and our standard of living. The truth is that each budget that fails reduces further our standard of living. The earlier we realize this, the better for all of us. We must also understand that there is something we, the ordinary Nigerians, can and must all do in our little corners and spheres of influence to improve the budget outcome. We can intervene as individuals or groups, like town unions, trade associations, sociocultural associations, political parties, community-based organizations (CBOs) and non-governmental organizations (NGOs) etc.

For us to meaningfully engage with the budget process, we need a basic understanding of the budget cycle, which consist of the major stages or events that are part of making decisions about the budget, including implementation and assessment of those decisions.

The budget cycle usually has four stages which include; Budget formulation, when the budget plan is put together by the executive arm of government; Enactment, when the budget plan is debated, altered, and approved by the legislative arm; Execution, when the policies of the budget are implemented by the government; Auditing and assessment, when the actual expenditures of the budget are accounted for and assessed for effectiveness. Each of the stages creates different opportunities for the participation of the people. During the formulation of the budget, groups can release analyses on issues known to be under consideration, or that they believe ought to be priorities, with the hope of influencing the budget being formulated. There might also be opportunity for the groups to establish informal lines of communication with the officials of the executive arm of government. The budget enactment stage typically is when public attention on the budget is supposed to be the greatest and information about the budget should be made most broadly available. It is during this stage that groups have the best opportunity for input. Since public discussion of and interest in the budget are typically at their high point when the executive presents its budget to the legislature, this creates opportunities for groups to get media coverage for their budget analyses. These analyses and testimony at budget public hearings can influence the debate in the legislature and highlight important issues about the impact of the budget proposal on the group or the poor as the case may be. At the budget execution stage, groups can insist on an effective and transparent monitoring system that promotes adherence to the budget and reduces mismanagement or corruption. Also groups may engage in some monitoring activities. For instance, they can focus on whether the amounts set aside for specific projects, such as a road, hospital, school, or market, have been used for the intended purpose. They can also assess the quality of the job done and the spending to see if the policy goal associated with the budget allocation are being met, and if public funds are being used effectively. The auditing and assessment stage present a great opportunity for groups to obtain information on the effectiveness of particular budget initiatives. It is as well an opportunity to advance accountability by assessing whether the legislature and executive arms respond appropriately to the findings of audit reports. When available in a timely manner, audit reports often document a litany of misappropriation, mis-expenditure, mal-expenditure, and procurement irregularities. Groups should do well to spread such information widely and use it to advance budget reforms.

Overcoming the problems of our malfunctioning budget process and poor budget management systems in Nigeria requires that we identify and repair the weak link in the budget process. These elements of a sound budget system must be kept in mind; there should be a legal framework to define institutional roles and responsibilities, including checks and balances; we must insist on a comprehensive budget that captures the totality of government’s financial operations; there should be accurate and timely information and projections; and a process that is both transparent and allows for meaningful participation by the legislature and the people. Adoption and sincere implementation of these cross-cutting elements is the best way forward for Nigeria. God help Nigeria.

Jude Ohanele


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