21 January 2014

Nigeria: Budget for Aircraft, Seaboat, Railways Was Systemic Error - Budget Office

The federal government has blamed the inclusion of allocations for fuelling and maintenance of aircraft, boats and railway equipment made by some ministries, departments and agencies (MDAs) in the 2014 Budget proposal on systemic errors arising from the use of the Government Integrated Financial and Management Information System (GIFMIS).

The director-general of the Budget Office of the Federation, Dr Bright Okogu, made this clarification during the Public Presentation of the 2014 Federal Budget organised by the Federal Ministry of Finance, in Abuja, yesterday.

Recall that LEADERSHIP had exclusively reported that no less than N14.5 million was allocated by the Mathematical Centre, Sheda; Investment and Securities Tribunal and Federal College of Education, Katsina for fuelling and maintenance of aircraft, boats and railway equipment.

However, Okogu claimed that these provisions were done in error and were glitches that arose from using the GIFMIS accounting system for preparation of the budget for the first time.

"What happened was that GIFMIS being a new system, had some glitches that reflected in some of the provisions. It is not totally strange. Many of you have read about the Obamacare and the challenges they had in actually implementing it. It is a big system, bigger than ours, but with the same features.

"What we saw in 2014 is because this is the first time we have used the GIFMIS to prepare the budget. I actually feel very proud. It is an issue which we have recognised and I want to use this opportunity to assure everyone that we will clean the books. We have already approached the National Assembly concerning this," he said.

In her presentation of the 2014 Budget, Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala reiterated that the budget builds on the pillars of macroeconomic stability, structural reforms, governance and institutions as well as investing in priority sectors upon which the 2012 and 2013 budgets were founded.

According to her, the budget is not only about the resources being allocated to various sectors, but also about new fiscal policies which will stimulate growth across various parts of the economy.

"For example, in previous budgets, we have announced such measures as backward integration policies to support various agricultural value chains (such as rice and sugar) or industrial value chains (like cement), policies to support development of the solid minerals sector, and so on. In most cases, it is not simply the amount of money which we can allocate to sectors, but rather the supportive policies which can have an impact and unleash the job creation which all Nigerians want to see."

Okonjo-Iweala also said the country should adopt an objective and de-politicised process to set the budget benchmark price like they have in Chile, where they use independent panel of experts; or as is done in Mexico or Ghana where they have a predetermined formula underpinned by law.

She lamented the fact that it was becoming increasingly difficult for the executive and legislature to agree on key parameters for the budget. "It is often very hard to agree on oil benchmark for the budget. This challenging budget process often leads to slippages in our budget timetables and ... reduced time for implementing the budget."

Speaking on the huge widening gap between the recurrent and capital budget, the minister expressed concern over the structure of the budget.

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