Economy Op-Ed

Why Budgets Fail in Nigeria By Luke Onyekakeyah

Why Budgets Fail in Nigeria By Luke Onyekakeyah
  • PublishedMay 16, 2017

The 2017 budget passed by the National Assembly has dwarfed the 2016 budget that was thought to be a super budget. That budget of N6.08 trillion has been outstripped by the 2017 appropriation of N7.441 trillion, which again is another super budget. The idea is to infuse enough money to leverage an economy in recession.

The Buhari administration has turned out to be trading on high stakes that require huge financial outlay. Actually, the huge budgets are not unconnected with the precarious economic situation that has manifested in recession. The most effective way to tackle recession, according to experts, is to plough huge money into the economy for productive ventures.

Ordinarily, some may think that the budget ought to have towed a low profile in view of the prevailing economic downturn. The optimism in the budget is expected if the country must come out of the biting recession. It underscores a move towards building a new Nigeria, borne out of ingenuity and creative thinking hitherto lacking in this sphere.

Having said that, I would like to state that our problem is not in proposing budgets; our problem is in their implementation. It is one thing to roll out a budget, yet it is another thing to implement it and achieve positive results. National development is predicated on effective implementation of national budgets.
It might be necessary, at this juncture, to ask how far did the 2016 budget go to alleviate some of the endemic problems in Nigeria. When I say the 2016 budget, I don’t just mean the federal budget but all the state budgets put together. As a matter of fact, every year, 38 budgets are rolled out including the Federal Government, 36 states and the Federal Capital Territory (FCT), Abuja.

To what extent did the budgets alleviate the problem of poor electricity, water supply, healthcare, education, dilapidated roads, unemployment, insecurity, etc? Are Nigerians faring better now compared with last year when the 2016 budget was passed? What systematic changes have occurred? What systematic solutions have been provided or on-going? What difference has occurred in the life of an average Nigerian?

That brings me to the issue of budget failure, which is the subject of this discourse. The failure of budgets across the country is heart-breaking. That is why pessimists call budgeting in the country annual ritual. That has been the case since 1999, when the present democratic dispensation began and it was thought that the era of military impunity was over. Indeed, our rogue budgets are merely rituals; they seem not to be made to change anything.

And really, how can there by change when on average, every year, 70 per cent of our budgets go for recurrent expenditure while only 30 per cent is for capital expenditure. How can an underdeveloped country like Nigeria develop when only a fraction of the annual budgets is put for capital projects? Faced with corruption, neither the recurrent budget nor the capital spending achieves its target. The inability of many state governments to pay salaries, pension benefits and other entitlements to workers underscores the failure of recurrent expenditure. Sadly enough, the Federal Government is gradually contracting the disease and is no longer able to pay workers’ salaries as at when due.

The issue of national development, which budgets are meant to address is out of the question. Looking at the embarrassing underdevelopment quagmire of the country, one can safely say that all the budgets made in the country since independence in 1960 put together, may not have recorded 40 per cent success. That is why the country stinks with pangs of underdevelopment. Quadrillions of naira has been appropriated since independence but there is little to show for it.

Every year, budgets are rolled out at the federal and 36 states and Abuja FCT. Each level prepares budget based on what suites its purpose. There is no common ground for integrated national development. Nigerians hear about the trillions of naira earmarked for expenditure but hear nothing again about how the money was spent. The same governments that announced the budgets with fanfare at the beginning won’t utter a word at the end about what happened to the money.

Rather than hear anything on accountability, what is heard is another round of budget preparation, announcement and passage in the various houses of assembly. The whole thing is a vicious cycle of deceit and corruption. Nobody talks about this huge fraud that has been going on for decades, the impact of which is the woeful state of affairs in the country.

There seems to be no law that compels governments to account for the previous budget before announcing a new one. As a way out, there is need for a law that would compel leaders, at all levels, to make public, at the end of each financial year, how the previous year’s budget was spent, what was achieved and what is left, which would form the basis for making a new budget.

The main causes of budget failure in Nigeria include:
Budgets are made with no clear objectives. Since the demise of national development planning in the early 70s, Nigerian budgets are prepared with bogus, high-sounding epithets, such as budget of consolidation; budget of transformation; budget of change. There is no clear-cut objective in these kinds of budgets.

No plan or strategy. Again with the demise of national development planning, budgets are prepared without plan or strategic framework. It is like building a huge edifice without architectural drawing.

No transformational ideology. There is no national ideological focus. Countries may make budgets to ensure mass education; infrastructural development; agricultural cum industrial development, etc. There is no ideological underpinning in our budgets; no thinking for the future.
Mono-cultural economy. The Nigerian economy is about 98 per cent dependent on oil revenue. Consequently, the budgets are dependent on the fluctuations of oil prices in the international market. The economy should be diversified to create more sources of revenue and less dependent on oil.

Discord, rancor and acrimony. Budget preparation, presentation, passage and implementation are associated with disagreements and display of selfish interests by politicians. Releasing approved budget funds is a battle in which selfish interest and nepotism override.

There are several other factors but we are constrained by space to discuss. It is baffling that at the end, funds which should have been utilised may be returned as unspent budget, while the country is in ironic embarrassment.

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