9 March 2011

Nigeria: Budgeting Our Way Into Poverty


Three months or so into 2011, the year's federal budget is yet to be passed by the National Assembly, never mind its implementation. This delay is symptomatic of the terrible mess which both the legislative and executive arms of Government have made of the country's budgeting process since at least 1999.

An aspect of this mess was melodramatised the other day right inside the hallowed chambers of the House of Representatives. The two major actors in the melodrama were the Minister of Youth Development, Senator Akinlabi Olasunkanmi, and the Director-General of the National Youth Service Corps (NYSC), Brigadier-General Maharazu Tsiga. The corps is supervised by the ministry.

The two had appeared before members of the House Committee on Youth Development on February 14 to defend their budgets for the year. As Daily Trust reported it the following day, members of the committee watched in amazement as the soldier and his civilian boss traded words over this year's budget for the agency.

The melodrama started when the committee chairman, Hon. Depo Oyedokun, asked the minister to present the agency's budget but the minister declined because he said he had not seen it. Tsiga, said Trust, quickly objected to this and produced official communication between the agency and the ministry as evidence.

Still the minister stood his ground and asked therefore to be excused from discussing the budget. The committee chair declined his request. Instead he asked the minister to comment on the agency's 2010 budget performance.

That, apparently, did it for the minister. "Don't ask me any question about the performance of the 2010 budget because I have not seen it. If you agree that I make my presentation without the analysis of the performance, that is fine by me and I can go ahead, but it will be irresponsible of me to sit down here while they answer questions on what I cannot defend."

This, in turn, apparently got the soldier's dander up. "I have due respect to the minister because NYSC is a Federal Government establishment... I sent the budget and it was delivered to the Honourable Minister's office. I respect you so don't attack my person."

As if the exchange of words between the two was not hot enough some of the committee members asked them if the 43 billion Naira allocated to the agency for 2011 was enough. The minister shot back and told the committee he would not allow the D-G to say one word. "I will not," the minister said, "allow him to say anything because we cannot come here to say what they have done is wrong."

That a minister and the head of an agency under his supervision would quarrel with each other so openly showed very clearly that there is everything wrong with the very first step of the country's budgetary process. All the other steps, I am afraid, are no better. If anything, they are probably worse, as even the most casual examination of budgeting since 1999, when military rule in the country seemed to have ended for good, will show.

Like America's whose presidential system we have more or less copied since the Second Republic from 1979, our budgetary system can be broken into three main steps: preparation by the executive and submission to the legislature; consideration and approval by the legislature; and implementation by the executive and oversight by the legislature simultaneously.

As I said, the mess that our process is starts from the very beginning. In America the president submits to the Congress on or before the first Monday of February his budget for the coming fiscal year which begins on October 1. The exceptions are when there are changes in administrations. Then the budgets could be submitted later but still in enough time to be passed by the Congress for implementation by October 1.

In Nigeria we do not seem to have any deadlines for submission of the budget to the National Assembly, at least not since 1999. And as the altercation between the minister of Youth Development and the D-G of NYSC showed, the preparation itself is often shoddy.

Worse, in preparing the budget not all the expected revenue streams get into the public treasury. Corporate and income tax are either underpaid or not paid at all, as tax collectors allegedly look the other way. Ditto, levies and charges by Customs.

Not least of all, the oil industry upon which government has come to over-depend on for revenue is so opaque no one really knows exactly how much oil we produce and sell. And certainly those in charge, who should care, don't.

Still on oil, there this thing they call "benchmarking" which has been subjected to abuse by the executive. Ostensibly to save for the rainy days the price of oil to be used for budgets is invariably pegged lower than the price obtaining. The difference is supposed to be saved for when the prices dip, as they are bound to. Trouble is that by the time they do, experience has shown that the savings would have disappeared, spent at the whims and caprices of the executive.

Senator Ahmed Mohammed Makarfi, former governor of Kaduna State and Chairman of the Senate Banking Committee - and an ex-banker to boot - gave some idea of the extent of the opacity of our budget preparations in an interview with the Daily Sun last year. "In a budget of N4 trillion," he said (Daily Sun, September 2, 2010), "you can find Memorandum items can constitute N8 trillion and these are not disclosed." Few people know what those items mean and what they are.

It is part of the constitutional duties of the legislators to ask. The fact is that they hardly do. Why? The Speaker of the House of Representatives, Mr.Bankole Dimeji, attempted to provide an answer at a conference in Kaduna by the Textile Workers' Union on September 28, last year.

"Why," he asked, "have things deteriorated so much in Nigeria over the last 30 years? (It is because) we have allowed the most unserious characters to take charge of the most important aspects of government... There are 13,000 (elected) offices in Nigeria. !2,000 of these are legislators. 37 are governors and the President of the country. The answer to the question I asked is clear: at each election only 19% of legislators are returned whereas 95% of members of the executive are returned. That means that those who ask questions about the conduct of government do not return after each election."

Questions can be raised about the veracity of Dimeji's statistics. But assuming they are accurate, it does not necessarily follow that our legislatures suffer a high attrition rate because they ask too many questions.

Quite the contrary. Throughout President Olusegun Obasanjo's eight years from 1999, his budget preparation was hardly exemplary. Worse, he chose and picked the items he implemented, something which offended the Constitution. Very few voices spoke out against his cherry picking.

Few voices spoke against the old man not because they wanted to keep their jobs, which they probably did. They looked the other way mainly because they were even more interested in the instant gratification of exploiting the president's breach of the Constitution for self-aggrandisement.

They did so in at least three ways. First, they asked for and got away with so-called Constituency projects, something which should have no place in our presidential system because in practice it amounted to legislators turning themselves into executives.

Second, they also got away with inviting not only ministers but also heads of agencies under the ministries to defend their budgets in a way that amounted to preparing the budgets all over again instead of reviewing them within the framework set by the executive as prescribed by our Constitution.

The result all too often was that by the time the legislators were through with the budget it bears little or no resemblance to the original that was tabled before them.

Third, the legislators got away with sitting in judgment over their own budget. That was how they were able to approve the controversial mind-boggling allowances for themselves in total defiance of the authority solely conferred on the Revenue Mobilisation Allocation and Fiscal Commission by the Constitution to do so.

The central duty of governments everywhere is to provide for the greatest good of the greatest number of its subjects. Budgets are the key instruments for achieving this objective.

In Nigeria members of the executive and legislative arms of government that between them have the responsibilities to prepare, implement and ensure fidelity with the fiscal objective of a budget have often colluded to enrich themselves at the expense of their people.

Is it any wonder then that the only progress the country has made since independence from colonial rule over 50 years ago is that of a well digger - deeper and deeper into the ground?

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