Time to Change the Budgeting Template

Time to Change the Budgeting Template

Just how did we get here? How did we get to a situation where our annual budget proposal would be a mere compilation of figures totally out of sync with society’s needs, circumstance and needs? It must have started gradually and with time we lost it, without realising and boom, here we are with the 2016 budget proposal that has been roundly buffeted and dismissed and even disowned by those who should own it.

We certainly have never had anything as embarrassing as this, as far as the budgeting process goes. First, the budget was presented with fanfare, and then the document was kept away from public space by not uploading it on the website, as usual. Then, there was rumour that the executive arm planned to withdraw the budget, a rumour the government denied. Then, came the claim that the budget was “missing” and yet another denial. Eventually, the executive submitted what might have been a further and better document. And that is when the bubble then burst.

Scrutiny upon scrutiny showed that the budget proposal was defective in many areas. It was almost as if every budget line oozed a different putridity and many of us budget analysts were quick to point them out. A session organised by the Senate last Wednesday with civil society groups to consider the budget brought out more of the scandalous compilations embedded in the draft budget.

One observation was the poor budgeting in the health sector which is likely to exacerbate the inequality existing among citizens in the access to quality medical care. A clear case is the ratio of proposed funding to the State House Medical Centre and that planned for various public tertiary health institutions. It seems the budget framers consider the medical centre more important than the public hospitals, ostensibly because of the “calibre” of patients that attend each one. To add to the mess, the National Health Insurance Scheme has only one line of budgetary allocation amounting to N852,870,015 and that detailed for “purchase of office buildings”. In many other sectors, the some line items were repeated several times, even consecutively with different amounts.


And yet in other instances, the descriptions were just a clumsy confusing of lumped up activities or items for huge sums of money. Such budgeting would usually be difficult to implement and is a set up for corruption and misappropriation. One such description is found under the National Primary Health Care Development Agency. It reads: “Develop national logistics supply chain three hub system; finalise and adopt best re-design option for national level (run hermes model for optimisation, bring in architects to determine optimal hub cold store redesign), recruit or train staff to fill gaps within new system, implement redesigns to equip the three hubs to receive international shipments.” And for that jumble of confusion, they plan to set us back with the sum of N11.6bn.

A few reasons account for this mess and must be addressed. There is an apparent lack of capacity on the part of those who drew up, processed and presented this budget. It therefore begs the question, “What do the budget lines for budget preparation go to accomplish”. Oh yes, there are budget lines for such. In the Ministry of Health, there is proposal to spend N8.7m for that in 2016. It also calls to question the quality of persons who sit in our various budget units and offices and earn salaries.

I have heard it said that the government is so embarrassed with the revelations about its first budget and plans a probe ad sanction of officers involved in some of the paddings. While the government does so, it must also accept that the buck stops at the desk of the senior government officials who approved the budget in each MDA and the final buck stops at the desk of the president. It is important therefore for the government to work towards a recurrence of this situation in future.

If we must reverse this trend, each government Ministry, Department and Agency must set up processes for identifying its priorities and the goals it plans to achieve within the year. It is only after then that it can draw up how much it would take it to actualise the goals. This would involve careful costing based on price intelligence information that would leave out any room for padding. It is equally important for the Budget Office of the Federation (now under the Ministry of Budget and National Planning) to have its cost of several items in place, based on price intelligence and monitoring. That way, when the budget estimates from the various MDAs get to them, they can clean up the figures based on their cost of each budgetary item.

There is thus an urgent need to change the budget template. What we currently have are set templates merely populated by government offices with little concern for what it needs or what could help them achieve their goals. That explains why virtually all the offices budget for “uniforms and other clothing”, “printing of non-security documents”, “printing of security documents”, “cleaning and fumigation”, “financial consulting”, “legal consulting”, “honorarium and sitting allowance”, “publicity and advertisements” and the notorious “welfare package”. Rather, each unit should be allowed to come up with what it needs based on its nature of operations and the outcome of its needs assessment process.

For all the above steps to be effective, the MDAs must involve their various publics in the budgetary processes. Participatory budgeting is what makes the citizens part of the decision making and gives them a sense of ownership. While it may be argued that not all the citizens are endowed with the necessary skills in budget processes, there are enough civil society groups in every area of governance that could be involved in the budget planning meetings.

Involvement of the public also requires the parliament to admit these citizens’ groups to budget defence meetings involving the MDAs. This has been lacking in our budgetary processes. The same involvement would be required in the monitoring of budget performances. Who is in a better position to confirm if a budgeted project in a local district was actually carried out if not the residents in those areas and civil society groups in the locations? The involvement of the civil society groups in the budgetary process is also important because they can raise issues about the need to meet international obligations signed up by the country. For instance, Nigeria has consistently failed to meet the UNESCO standards for the percentage of budgetary allocation to the education sector, the same for the benchmark set by African leaders for health and agriculture budgets.

The executive should also be timelier in starting the budget preparation process. There is no doubt that part of the problems we ran into had to do with the long delay in constituting the cabinet and assigning roles to the ministers. The result was that many of the ministers hardly knew what went into their ministry’s budget, yet they had to defend very entry before the parliament and the citizens. This sham of a budget was therefore to be expected as a natural consequence of the delay in setting a government.

For the approving authorities within each MDA, in the Budget Office and eventually in the legislature, they must first do a thorough review of how the previous year’s budget was spent before approving new budgets. This is because many items seem to be budgeted over and again, thus fuelling corruption. They should also pay extra attention to the descriptions given to budget lines to ensure that each item is clear to everyone as to what it aims to achieve.

Until the current budget template is changed, our budgets will continue to ooze corruption.

(Published in The Punch Newspaper of February 14, 2016 http://www.punchng.com/time-to-change-the-budgeting-template/)

Written by
Obo Effanga
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