Nigeria: What With Budget Failure?

Vincent Ochonma

According to media reports, the House of Representatives, on Tuesday July 14, 2009 threatened to commence impeachment proceedings against President Umaru Musa Yar’Adua over his alleged poor and selective implementation of the 2009 Appropriation Act. Similarly, the Senate on Thursday July 23, 2009 expressed anger against President Yar’Adua’s led executive regarding the non-implementation of constituency projects for which N60 billion had been provided in the 2009 budget.

Budget failure has become the country’s development albatross. A country, even an individual family or an organisation, that does not spend by budget cannot grow.

Budget is the key instrument through which elected officials and the power elite are expected to choose what services are to be provided by government and which areas are to be left to the private sector of the economy. It is also the principal instrument of fiscal policy used to encourage stable growth, sustainable development, prosperity, and optimum employment in the economy. The budget spells out the degree of activities and costs, as well as the specific programmes required for the implementation of the programmes.

The earlier the Senate acts out its resolution to interface with the executive to find out the actual reason for the poor implementation of the 2009 budget the better for the nation. As promised by the chairman, Senate Committee on Information and Media, Senator Ayogu Eze: “We will like to find out what the problems are, why they are not implementing other aspects of the budget…”

The problems or reasons are not far fetched. When the 2009 budget proposal was presented in December 2008, it was hoped that the managers of the economy would have 12 full months (January-December) to implement it. But to the dismay of Nigerians, the budget was signed by the president on March 10, 2009, more than three months after its presentation to the National Assembly. The trading of blames between the executive and legislature over the delay in passing the budget does not make much meaning to Nigerians. Why should it take the National Assembly more than three months to deal with the in-consistencies, ambiguities, general irregularities, and other fundamental flaws which they associated with the budget proposal? And why did the executive wait till the month of December before presenting the budget proposal to the National Assembly, recognising the fact that it must undergo a long and labourious process and scrutiny to pass the budgetary test? After all, President Yar’Adua, an apostle of Due Process should expect the passing of the budget to follow due process.

Besides, President Yar’Adua’s reservation over government’s capacity to fund the N3.1018 trillion budget revealed that the budget was already in imminent grave peril of failure. The factors that would be held responsible for the failure were already identified. These include the $40 per barrel price of crude oil in the international market, at the time, which was below the $45 per barrel used by the National Assembly and the reduction of official output by the Organisation of Petroleum Exporting Countries (OPEC).

In fact, it was reported that some members of the National Assembly that passed the bill had started, from the onset, to express some doubts about the realities of their projections even before its (budget) implementation, based on the failing revenue.

But budget failure is not new in Nigeria. It cannot, therefore, be blamed on the global economic crisis. The fact is that since the country gained independence, the funds approved for project execution have not been judiciously utilised, and the executive, both at the federal and State levels, has hardly complied with budget provisions.

Worse still, proper planning regarding how budgets are to be effectively implemented are usually not made before their preparation and presentation to the legislature.

The implementation of the 2008 budget put at between 20 per cent and 40 per cent was not a consequence of the global economic meltdown which has adversely affected the country’s oil revenue. The woeful implementation of the budget was blamed on among other things, the delay in the passage of the Appropriation Bill by the National Assembly and the failure of the various Ministries, Departments, and Agencies (MDAs) to understand, early enough, the Public Procurement Act introduced by the government.

Budget is a veritable vehicle not only for propelling national growth and development, but also for stimulating participatory democracy. It therefore goes without saying that if its preparation and implementation are bungled, the country’s economy is destroyed and its development efforts are stifled.

To solve the problem of budget failure in Nigeria, the managers of the economy must learn to translate policy objectives into the budget, make a realistic assessment of the resources likely to be available to the government, and ensure conformity of actual expenditure with the budget.