Bad Governance: The Persistent Violations Of Budgeting Norms In Nigeria -By Olu Fasan

Two weeks ago, on March 7, the British Chancellor of the Exchequer presented the UK government’s annual budget to parliament. The Financial Times and other British broadsheets pored over the budget and each devoted over 15 pages of a special supplement to analysing its intended and likely impacts on different categories of people, on families, on businesses, on the wider economy.

That’s the kind of serious attention government budgets should get. This is because they are about how a government will spend public money, and everyone expects them to improve lives, make society better and grow the economy. Sadly, that’s not what government budgets do in Nigeria. They violate universal norms of budgeting in two significant ways.

First, budgets in Nigeria are not worth the paper they are written on in terms of prioritisation and implementation. Second, the budgeting process is largely a triumph of private gain over public good in the sense that politicians in both the executive and legislative arms of government have perfected the art of inflating and padding budgets to squirrel away public funds.

Let’s start with the first point. Take any Federal Government budget. There’s virtually nothing in it aimed directly at ordinary Nigerians. So, if, like their British counterparts, Nigerian newspapers were to analyse the budget for its positive impact on people’s lives, on businesses, on society, on the economy, they will have very little to say. A Federal Government budget covers capital expenditure, recurrent expenditure and debt servicing. Recurrent expenditure, which is basically the cost of running the state, always accounts for the largest share (36.1% in the 2024 budget.) Capital expenditure accounts for the second large portion (31.6%.) Then, debt-servicing takes the third chunk (30.1%). This budgeting ritual is repeated every year, with virtually no positive effect.

Think about it. After 24 years of progressively large annual budgets since Nigeria returned to civil rule in 1999, this country has no quality education, no quality health service, no electricity or clean water for most of the citizens. Youth unemployment is high, at about 40 per cent, and more than 140m Nigerians are multidimensionally poor. Of the top ten universities in Africa in 2024, South Africa has seven; Nigeria has none. Why should South Africa’s state universities make up seven of Africa’s top ten universities (Ghana has one in the top ten) while no Nigerian state university cuts the mustard? Which country has ever developed without first-class education system, first-class healthcare system, robust human development and human capital, regular electricity, etc.? Truth is, Nigeria never gets its budgeting priorities right!

Even the so-called capital or infrastructure projects are often poorly implemented. A few years ago, the United Nations Industrial Development Organisation, UNIDO, lamented the chronic and acute problem of project failure in Nigeria. According to UNIDO: “Nigeria invests millions of dollars on projects, yet experiences over 60 per cent project failure within the framework of governmental system.” Everyone knows about the phenomenon of abandoned government projects, several thousands of which spread across the country. Then, there’s budget failure. In 2017, Bukola Saraki, then Senate President, said: “The Senate is tired of having budget documents that, at the end of the day, when it comes to implementation, don’t mean anything.” Despite the highfalutin names given to budgets, and the hypes around them, poor budget performance is a perennial problem in Nigeria.

For instance, President Buhari dubbed his first budget in 2016 “Budget of change”, describing it as “a historic milestone for us as a nation.” It was nothing of the sort. He also gave his other budgets lofty names. But after Buhari’s eight years in power, one can call his eight budgets, collectively, “Budgets of Failures and Unfulfilled Promises.” In tagging his own N27.5 trillion 2024 budget – the largest in Nigerian history – “Budget of Renewed Hope”, Bola Tinubu is saying he wants to “renew” the “hope” that his party, APC, betrayed for eight years under Buhari. But Tinubu’s “renewed hope budget” is already a failure. First, one-third of the budget, a whopping N9.18 trn, is a deficit, meaning that he will borrow heavily to fund it. Second, such a humongous budget is a recipe for waste, misappropriation and outright embezzlement.

That brings us to budget padding, which is topical because of Senator Abdul Ningi’s allegation that the 2024 budget was “padded” with N3.7 trillion. The Senate hastily suspended Ningi. But the statement by BudgIT, the highly respected budget transparency NGO, is instructive. BudgIT said it couldn’t confirm the existence of budget padding but there was an expenditure of N3.32trn allocated to statutory agencies with no line-by-line breakdown. It added that, despite the N100bn already set aside for “constituency projects” in the budget, the National Assembly introduced additional 7,447 projects, totalling N2.28trn. The NGO said the lack of detail and transparency around the budget allocations for the projects “leaves room for mismanagement and misappropriation of funds.”

Since 1999, federal legislators have inserted their own projects in the annual budgets, thereby distorting them. President Obasanjo tried to stop this practice by introducing budget allocations for “constituency projects”. The allocations started in 2003 with about N66 billion annually but rose to the current N100bn. Yet, despite the annual allocations for constituency projects in the Executive’s budget proposal, the legislators continued to insert projects in the budgets of the MDAs. The legislators’ self-dealing annoyed Obasanjo’s successors but they avoided confrontation with the National Assembly. President Buhari’s first budget in 2016 was marred by a budget-padding scandal. Sadly, at the heart of the so-called constituency projects and the budget padding is the diversion of budget resources by the legislators to themselves.

Last week, Sunday Vanguard published a damning report titled “Constituency Projects Stink: How lawmakers pad budgets, make billions”. The report cited investigations by the Independent Corrupt Practices Commission, ICPC, which found that constituency projects were executed by companies owned by lawmakers and that funds were paid into sponsoring legislators’ company bank accounts. So, essentially, legislators pad budgets for “constituency projects”, become contractors for executing the “projects” and connive with the MDAs to transfer the funds to them. Nigerian legislators are among the world’s highest-paid lawmakers; they are probably among the world’s most corrupt too!

But let’s face it, this is one of the weaknesses of the presidential system. Such flagrant and rampant violations of budgeting norms won’t happen under the parliamentary system. That’s yet another reason Nigeria must return to the less corrupt and more accountable system of government.