Friday, January 31, 2014

This Nigeria's budget

Nigeria's budget proposals in the last  2 years shows that the present government's transformation agenda exists in name only. For a government that wants to "cut down the cost of governance and re-engineer the economic sector" the budget tells a different story. The country's N4.64 trillion budget proposal where N3.7 trillion is allocated to recurrent expenditure and 1.1 to capital expenditure says that:

  • The government has no clear direction of how to achieve its objectives . For a government that eloquently states its purpose, implementation appears to be a challenge. Other countries such as Australia and Malaysia have outcome based budgets tied to specific programmes of each government agency. In Nigeria, on average, ministries allocate N29 million for honorarium, N 20 million for international training,  N100 million for miscellaneous  and budgets for refreshments, anniversaries and celebrations!
  • The government is not willing to plug the leakages and waste in the system. In the budget of most ministries and agencies,the going cost for a photocopier is N 2 million and N5 million for computers. Ministries pay Banks other charges besides interests and some charges are as high as N12million. For the Navy it is NGN 26, 240, 243. Let's look at the Auditor- general's office where scanners would cost 4.974, 310; Photocopier- 19, 334, 548; computers- 141, 393, 443. Vehicles 550 million, office furniture 370,874, 150, fire fighting equipment- 6,539, 498. Loss on foreign exchange is catered for by Ministries- for Police Affairs it is N13,643, 684. Still on the "Miscellaneous" line item- does anyone know what the comprises miscellaneous?
  • The budget has no plan to impact the lives of Nigerians and benefits a few businessmen. The budget is full of frivolities that have no direct impact on benefiting the people. For instance a ministry (not the sports ministry) has a budget of 42 million for "sports activities" while the budget for sports in a federal government school is N100, 000. Who needs sports more?
  • The government is not willing to address the problem of a bloated civil service and promotes the duplication of duties: Most of the Ministries, Departments and Agencies (MDAs) perform similar functions. For instance, in Kaduna, there is a National Eye Center and a National Ear Centre with different budgets. Is it not possible for the centers to exist in the Federal hospital in Kaduna? The Ministry of Science and Technology has 77 departments. These 77 departments can be merged into 10 departments and would still function. The Police and Military have budgets for Barracks rehabilitation yet a presidential committee for the rehabilitation of barracks with a budget of N1.9 billion for operating expenses.
  • The Civil Service lacks professionalism: The budget reveals deep mental laziness that exists in the civil service. The budget for the Ministry of Foreign Affairs is a perfect example. Missions in countries that have 24/7 electricity also budget for generator fuel costs and the budget is the same for most missions. How is possible that fuel would cost exactly N1, 572, 932 in Athens (Greece), Atlanta (USA) and Bangkok (Thailand)?
The solution to this outrageous budget is simple, the NASS should only approve items of the budget that would enable MDAs carry out their duties and pay salaries. Budgets for newspapers, traveling and other irrelevant items should not be approved.The government should walk its talk and begin a budgeting system that ties expenses to projects that would enable it achieve its  goal of developing agriculture and developing alternative sources of income for the country and a favorable environment for job creation. This budget definitely does not support "the push in agriculture" and  is not "kick-starting the housing sector".


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