The wasteful budget culture

| March 25, 2014

Over the years, annual budgets have not positively impacted the lives of Nigerian citizens. While the figures keep going high, the level of poverty also continues to increase.

Nigeria is one of the countries on the globe still plagued with poverty. Government has neither been able to create jobs nor provided the enabling environment that could promote entrepreneurial endeavours.

It is important to emphasise that if the economy is to be turned around, Nigeria’s annual budgets must prioritise programmes and projects that deliberately address is¬sues of poverty alleviation, job creation and security of lives and property.

The major problem, ac¬cording to pundits, has to do with the meager budgetary allocations to capital projects.

Over the years, major parts of the annual budgets have always ended up in the “stomach.”

Contrary to the Federal Government’s claim that the country’s economy is growing, it has been said by analysts that nothing can be farther from the truth with 30 percent allocation to capital expenditure and 70 percent recurrent.

Wale Bolorunduro, com¬missioner for Finance, Osun State, recently said most of the submissions by the na-tion’s economic experts were theoretical without any prac¬tical basis, where poverty is boldly written on the faces of the people.

Bolorunduro stressed that “we all crave for natural de¬velopment, whereas there cannot be any development at the federal level without striving such at state level. Every state must earnestly seek sufficient level of devel¬opment through investment in physical infrastructure.”

Recently, The Minister of Finance and coordinating minister for the economy, Ngozi Okonjo-Iweala, la-mented the bloated recur¬rent expenditure which has risen to 74 percent of the total proposed budget of N4.642trillion.

Okonjo-Iweala said a total of N3.542 trillion had been earmarked for recurrent, leaving only N1.1 trillion for capital budget.

Breaking down the budget, the minister said the recur¬rent consisted of N2.239 tril¬lion, representing about 37 percent of the total budget for personal cost, while N1.303 trillion has been earmarked for overheads.

The minister believes that the solution lies in making tough choices in the future about the structure of our budget.

“We need to strike a bal¬ance between growing a wage bill for the public sector and investing more of our resources in infrastructure projects,” she said.

According to her, it implies that almost 40 percent of the budget goes directly into the pockets of the Federal government workers who are only about one million in number.

“The high share of re¬current expenditure in the budget is of great concern as it reduces the size of funds available for investments in capital projects. We worked hard to reduce this ratio from 74.4 percent in 2011, to 71.5 percent in 2012, and further to 67.5 percent in 2013 but it has risen back to 74 percent in 2014,” she said.

A policy analyst had ob¬served that last year, the amended budget was N4.987 trillion. “Half of the sum, 2.415 trillion”, he observed “was consumed as recurrent expenditure (salaries, allow¬ances, cars, travels, entertain¬ment, armed escorts etc) by a negligible number of people in the upper echelons of lead¬ership in the country.”

He lamented that a miser¬able “N1.591trillion was voted for industrial and infrastruc¬tural development.”

According to the analyst, “This is not so with many developing and underdevel¬oped countries. They mini¬mise their consumption and devote the greater part of their funds to capital ex¬penditure. Nigerian leaders remain stubborn and head¬strong, heeding no advice, refusing to copy any positive examples from more success¬ful countries and foolishly consuming the economy, preparing for a future of de¬clining oil revenues.”

Last year, former president Olusegun Obasanjo, while commenting on how poli¬cies and programmes should impact on the lives of citi¬zens, scoffed at government’s claim of growing Gross Do¬mestic Product (GDP).

“With Nigeria’s situation, you all know it; if you don’t know it, you will feel it; if you don’t know it and you don’t feel it, you will hear it. And if you don’t hear it, you don’t feel it, you don’t know it, you will smell it. So, the so-called GDP growth does not translate into the welfare and well-being of the people,” he said.

According to him, “I was asking the British High Com¬missioner if he came from Kano by road, he said yes. I asked about the road, he said it was good. For me, I say it as I see it. The road from Kano to Jigawa is better than the one from Lagos to Ibadan. Before, people used to be afraid of coming to Jigawa, but today, everyone wants to come. Who has brought this change? One man, and his team!

“If anyone says one man cannot bring about the dif¬ference, that person is talking rubbish. One man with his head properly screwed, one man who knows where he wants to go, with a team to help him get there, will bring about change.”

Another leg of the prob¬lem is the implementation of budgets. Since 1999, budget implementation has always been marred by politics.

The Speaker of the House of Representatives, Aminu Tambuwal, recently decried the low implementation level of the capital component of the 2013 budget.

“The level of implementa¬tion of the 2013 capital appro¬priation is below expectation given the early submission by the Executive and early passage by the Legislature,” he said.

Last year’s budget wit¬nessed serious horse-trading between the Executive and Legislative arms of govern-ment before the appropri¬ation bill was eventually passed into law, but not until the figure got padded by the National Assembly.

 

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Category: Jigawa

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