The 2016 Budget And Public Administration Reform In Nigeria
INTRODUCTION
The budget of a country is probably the most important piece of document in governance apart from the constitution. This is because it is through the budget that resources are allocated to deliver public goods and services to the people. It is therefore not surprising that politicians, public servants, political activists, development practitioners and the civil society engage intensely with the budgetary process. Countries use the budget to drive development. But there are many things wrong with Nigeria. That is why the change mantra resonated with a lot of Nigerians. One of the problems with the country is the budget process and content.
First and foremost, the process of making the budget does not involve the citizens that will benefit from the budget. Politicians and bureaucrats will sit down in their offices and decide on what projects will be in the budget and which one will not. Citizens and communities do not participate in formulating policies and agreeing on projects that go into the budget. Meanwhile, it is clear from theory and practice that when citizens participate in the process of making budgets, more relevant projects are selected and success in the implementation of the project is guaranteed. Secondly, wherever the budgetary process is not open, corruptible transactions are common and protected. Indeed, mega corruption in any country starts from the budgetary process. The budget is done in secret. Releases are done without the knowledge of citizens. The project is not executed but payment is made to contractors and corruption is guarded and protected. Thirdly, the priorities of the budget are not in accord with the development challenges of the country and there is no synergy between plans, policy and budget. This is particularly important for a new administration that want to implement a change agenda. The overarching development agenda of the Goodluck Jonathan administration from 2011-2015 is the vision 20:2020 development plan. The plan is anchored on the neo-liberal agenda of free market. The change agenda of President Mohammed Buhari (PMB) is anchored on the All Progressive Congress (APC) philosophy of social democracy necessitating state intervention for the security and welfare of citizens. It is therefore imperative to have an overarching development plan that is linked to new policies and budgets. In addition, there has been a lot of frivolous expenditures in the budget that will defy all reasoning and logic either in terms of necessity or cost. Finally, historically, the institutions and mechanisms for oversight of the budgetary process in Nigeria since return to civil rule in 1999 are weak. In any modern democracy, the legislature, civil society and media are expected to play oversight functions in addition to the internal control system put in place by the executive.
It is against this background that the 2016 budget was prepared in Nigeria. It was therefore expected that the government will put mechanism in motion to address these problems.
THE 2016 BUDGET
One of the major policy decisions of the President Muhammadu Buhari Administration to address the problem of the budgetary process in Nigeria is the adoption of Zero Based Budgeting (ZBB) to replace the traditional budgeting system that is practiced in Nigeria. The Zero Based Budgeting system is a method of budgeting in which all expenses must be justified every year.
The budget was presented by President Muhammadu Buhari on 22nd December, 2015. The total budget proposal was 6.07 trillion naira. The budget was based on a crude oil benchmark of $38 per barrel and a production estimate of 2.2 million barrels per day. The growth rate projection was put at 4.37 percent and the capital expenditure is 30 percent of the budget.
The 2016 budget is the first budget prepared by the President Muhammadu Buhari administration and it is expected that the administration will use it to change all what is wrong with past budgets in terms of content and process. Unfortunately, there is little change from the pattern of previous budgets. The adoption of Zero Based budgeting was expected to eliminate frivolous expenditure but as we shall show later, this has not happened. It was expected that there will be a huge jump in capital expenditure. The Vice President earlier indicated that capital expenditure will jump to 40 percent but when the budget was presented, the capital expenditure was 30 percent of the total budget. The diversification was expected to be operationalized in increased budgetary allocation to Agriculture and Solid Minerals sector. But agriculture received only N29.7 billion representing 0.48 percent of the total budget. Similarly, the Solid Minerals sector received only N18.62 billion with N9.10 billion allocated for capital expenditure and N9.52 billion for recurrent expenditure. Although the allocation is still low considering the work that needs to be done to make the sector attractive, it represents 3, 540 percent increase in capital expenditure compared to previous year. Relatedly, the debt profile of the country is increasing with the 2016 budget planning to incur debt of N1.8 trillion naira in just one year.
From the above, it is clear that the 2016 budget has not addressed the major challenges with the content of budgeting in Nigeria. Similarly, the process of budgeting has not changed much despite the change of label from traditional budgeting to Zero Based Budgeting. The process of preparing the budget did not involve the citizens or the civil society. Even gains made in the past where civil society organisations were invited to workshop on medium term sector plans have not been sustained. So far, we have not received any policy statements from the Ministry of Budget and Planning and the Ministry of Finance on how to improve the openness of the budgetary process especially in terms of access to information on releases. The synergy between plans and budget cannot be assessed as there is no overarching development plan for the administration. We are still waiting for the development strategy that will replace the vision 20:2020 programme of the President Goodluck Jonathan administration.
In addition, frivolous expenditure which has been a permanent feature of budget in Nigeria since return to civil rule in 1999 was taken to new heights in the 2016 Federal budget. N89.2 million was budgeted for purchase of canteen/kitchen expenditure in the presidency; N326.08 million for wild life in the state house; N387 million for renovation of Guest House; and N3.63 billion for the purchase of BMW cars. There is also allocation of N823.3 million as welfare packages in the office of the Secretary to the Government of the Federation and over N4 billion for purchase of cars by the National Assembly. All of these are clearly in contradiction to the posture and austere image of President Muhammadu Buhari.
Finally, we are yet to see whether anything will change with respect to oversight by the National Assembly, civil society and media. The 8th National Assembly has been embroiled in leadership issues since assumption which is affecting its perception and possibly distracting the legislature. The fact that the budget to the legislature of N115 billion is seen by Nigerians as too large is a huge issue. This is compounded by the fact that while all others have their breakdown in the budget, there is no detail of the National Assembly budget. The civil society has not been as vocal as it used to be for many reasons including fatigue, poor funding, and probably giving benefit of doubt to the new administration (the usual honey moon period). The media used to be more sympathetic to the earstwhile opposition and will need some time to adjust to the new reality. All of these factors will affect oversight by the national assembly, civil society and the media.
THE 2016 BUDGET AND THE NEED FOR PAR
A lot of factors would have affected the presentation of the 2016 budget with a lot of challenges despite the stated position of President Muhammadu Buhari and Vice President Yemi Osinbajo and the Federal Government. One of the main factors is that budgets are prepared by the bureaucracy. Meanwhile, it is well known that there are challenges with Public Administration in Nigeria. The structures and systems in the public sector are not delivering services efficiently and effectively. There is a huge capacity gap in the public sector. Historically, there is dysfunction in the public sector in Nigeria. Indeed, the Presidential committee on review of reform processes in the public service in 1999 pointed out that “there is no functioning public service in Nigeria-we are operating a patronage system that destroys merit.” Therefore, for the government of President Muhammadu Buhari to implement a change programme that is needed greatly in Nigeria, there must be a comprehensive public administration reform.
Political leaders can formulate vision, philosophy, manifesto and programmes for their governments. But they have to be translated into concrete plans and budgets by bureaucrats. I want to believe that President Muhammadu Buhari administration would have been embarrassed that despite all his positioning and posturing, the 2016 budget will come out with more frivolous expenditure that the previous administration. This feat will be repeated in 2017 and subsequent years unless there is a comprehensive public administration reform. The reform should cover the areas of reducing the cost of governance; public finance management; civil service reform; establishing a sustained linkage between policy, planning and budgets; instituting policy architecture for the country and tackling systemic corruption.
CONCLUSION
The Buhari Administration was elected on the platform of the All Progressive Congress (APC) to bring changes in all aspects of governance in Nigeria. One area that change is greatly needed in the area of the content and process of budget. The 2016 budget is the first budget of the PMB administration and offered an opportunity to lay a foundation for the change. The draft budget presented is a missed opportunity because the challenges of the budget in the past have not been addressed. The Presidency needs to liaise with the National Assembly to do as much damage control as possible. However, there is the need for immediate commencement of a comprehensive public administration reform so that the 2017 and subsequent budgets will be better.
Written by Dr. Otive Igbuzor, PhD, Executive Director, African Centre for Leadership, Strategy & Development (Centre LSD).