Onig­binde: Get­ting the States to Dis­close their Bud­get is War

The chief ex­ec­u­tive of BudgIT, Mr Seun Onig­binde at a re­cent fo­rum or­gan­ised by mem­bers of the Fi­nance Cor­re­spon­dents As­so­ci­a­tion of Nige­ria in La­gos, ex­pressed dis­ap­point­ment over the opaque bud­get­ing sys­tem in most states in the coun­try. He also urged t

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What is your take on a re­cent com­ment by one of the of­fi­cials of govern­ments that part of the looted funds has been de­ployed to fund the cur­rent bud­get?

Based the bud­get anal­y­sis we have seen, there is no amount of re­cov­ered loot has been put into the bud­get. It is only in 2019-2020, that the Medium Term Ex­pen­di­ture Frame­work (MTEF) out­lined a plan to put out al­most N300 bil­lion in the bud­get. But that is still in 2019 and that means there is no cer­tainty today that the 2018 would have any in­flow of re­cov­ered funds. I think that is also what the So­cio-Eco­nomic Rights and Ac­count­abil­ity Project (SERAP) has been ar­gu­ing about. If you are mak­ing a lot of noise about funds that have been re­turned and re­cov­ered, then show us who re­cov­ered these funds, how much have you re­cov­ered and how quickly can you start main­stream­ing these funds into govern­ments. But we have not seen that. There was a bill that was sup­posed to be on the looted funds but till now, that bill has not been passed. There should be a guide­line or frame­work on what to use the looted funds for. Should it be for ed­u­ca­tion or health? What frame­work are we go­ing to use for the al­lo­ca­tion? We may move into that same cy­cle where that looted funds would be re-looted again, us­ing an­other for­mat.

What is your or­gan­i­sa­tion do­ing to ex­pose cor­rup­tion in states’ bud­gets?

That was why we did the state of states re­port. The prob­lem about states is the same prob­lem with La­gos state whereby states don’t pub­lish their bud­get. Be­fore a state can pub­lish their bud­get, it is war. It is war to get a state gov­ern­ment to pub­lish its bud­get, ex­cept Kaduna, and Kogi re­cently. Even Osun state, I have not seen Osun state bud­get for eight years. So how do you in­ter­ro­gate on the ba­sis of facts. So how do state govern­ments not get into trouble when they do things on their own? But we can’t be ev­ery­where be­cause we don’t have the re­sources and man­power to be ev­ery­where. But if we build stronger part­ner­ship with me­dia or­gan­i­sa­tions as well as FICAN, our mileage can be much higher.

Con­stituency project is al­ways an is­sue in our na­tional bud­get. Where did our leg­is­la­ture get that idea? Also, the peren­nial ar­gu­ment be­tween the Na­tional As­sem­bly and the Ex­ec­u­tive over who has more pow­ers to al­ter the bud­get, how best can it be re­solved?

The first ques­tion about con­stituency project, I would say it is a stan­dard in the United States. Leg­is­la­tors also in the US have a bit of dis­cre­tion to nom­i­nate projects in the bud­gets. So it’s a stan­dard there too. It is just that the leg­is­la­tors’ job stops at the nom­i­na­tion level, not that they in­flu­ence the con­tracts like the ones we nor­mally see in Nige­ria. Here in Nige­ria, if you want to rest as a Min­is­ter or as a head of an agency, you pos­si­bly are go­ing to do a lot of back door with the leg­is­la­tor(s) to de­liv­ers the projects.

Now on the is­sue of the usual tus­sle be­tween the ex­ec­u­tives and leg­is­la­tures, the con­sti­tu­tion says, “the bud­get is an in­stru­ment of the law,” mean­ing that the bud­get is a typ­i­cal leg­is­la­tion. So if the ex­ec­u­tive sub­mits a leg­is­la­ture, the leg­is­la­ture has wide pow­ers to tam­per with the bud­get. They can add, re­duce or in­sert and do what­ever. But where their au­thor­ity stops is on the im­ple­men­ta­tion of those bud­get items and that is where the ex­ec­u­tive needs to be much stronger. They can put what­ever they want in the bud­get, but the ex­ec­u­tive would de­cide how they are go­ing to im­ple­ment the bud­get. Presently, there is no of­fense for not im­ple­ment­ing the bud­get. The of­fense is if you over­state or un­der­state what has been al­lo­cated in the bud­get or you over dis­burse money. But there is need for much more co­he­sion be­tween the ex­ec­u­tive and leg­is­la­ture. It is the same gov­ern­ment where the All Progressive Congress is the ma­jor­ity gov­ern­ment in the Na­tional As­sem­bly and the ex­ec­u­tive. So if the gov­ern­ment has a sin­gle vi­sion about what they want to do, why is the bud­get a prob­lem? It comes back to the con­ver­sa­tion I had ear­lier that Nige­ria’s bud­get is a con­tract vend­ing ma­chine more than a planning doc­u­ment, be­cause a typ­i­cal bud­get would first of all bring all the arms of gov­ern­ment to­gether and look at the goal of APC that is in power. If for in­stance, their ob­jec­tive is to build the sec­ond Niger Bridge, 100 hos­pi­tals or 100 schools, then ev­ery­thing you see in the bud­get in terms of al­lo­ca­tion would fol­low that pat­tern. But every­one wants to stuff things into the bud­get so that it be­comes a le­gal op­por­tu­nity to pro­cure. So that is the prob­lem re­ally. So, if we see the bud­get as more of a planning tool, most of the things we see around would hardly come up.

When this gov­ern­ment came in, they talked about zero bud­get, why are they no longer us­ing that bud­get­ing sys­tem and the LagosBada­gry ex­press­way project, I don’t think your or­gan­i­sa­tion has tracked it enough. Why is the project drag­ging for too long?

For La­gos-Bada­gry ex­press­way, when you as­sume some­thing was pack­aged by pri­vate peo­ple and World Bank was in­volved, you would as­sume that stan­dards and ethics would have been fol­lowed. But some­how, La­gos state has not done well with that project; es­pe­cially with the eight years of Ba­batunde Fashola. That loan was not op­ti­mised. And un­for­tu­nately, the cur­rency has moved against La­gos state gov­ern­ment be­cause you bor­rowed in dol­lars at N165 to a dol­lar and now you are pay­ing back at al­most N400 to a dol­lar. If you track La­gos state’s Fed­er­a­tion Ac­count Al­lo­ca­tion Com­mit­tee (FAAC) funds, it has dwin­dled to al­most N400 mil­lion, be­cause the ex­ter­nal debt de­duc­tion are be­ing taken from source. And it is be­com­ing much larger as they go. That is why we are warn­ing states to be care­ful of ex­ter­nal debts. Be­cause with lo­cal debts, there could be a bailout from the fed­eral gov­ern­ment or you re-sched­ule your debts for a longer pe­riod. But for ex­ter­nal debt, you don’t have the op­tions of the fed­eral gov­ern­ment that re­ceives its monies in dol­lars. But for states, what­ever money that is given to states is go­ing to be mon­e­tised in naira. So if you bor­rowed at N165 and you are now pay­ing at N315 or more, you are to go­ing to be more hit when there is a cur­rency risk. So it is a thing we are try­ing to warn states against. Don’t see cheap loans and start jump­ing into the fry­ing pan.

On zero bud­get­ing, I don’t think it can ex­ist. If we go by text­book of zero bud­get­ing, that can­not work in Nige­ria. Why can’t it work? You have thou­sands of aban­doned projects and you say you want to do zero based bud­get­ing. Zero based bud­get­ing means that you are go­ing to start afresh ev­ery year and con­sider ev­ery sin­gle project. But we are in the phase of de­vel­op­ment and most of our projects are rolled over. There are three-year projects. So you can­not do some­thing halfway and then come the next year to con­sider a new project. I think what we need more is the same en­ve­lope bud­get­ing we have been do­ing, but we need to make it much clearer and im­prove the process. If you look at the pri­or­ity of the APC gov­ern­ment, it is clear- in­fra­struc­ture- which is roads, rail and power. That is why al­most 50 per cent of the cap­i­tal al­lo­ca­tion is spent by just two min­istries – Min­istry of Power, Works and Hous­ing and Min­istry of Trans­porta­tion. So what the gov­ern­ment ought to do is make sure the projects are well de­tailed enough. What they do is that when a cap­i­tal ex­pen­di­ture N400 bil­lion, they al­lo­cate that N400 bil­lion, then the min­istry would then de­cide what they want to do with that money. Money should be dis­bursed from the trea­sury on the ba­sis of the project. They should not just give bulk sum to a min­istry who can then de­cide they want to buy am­bu­lances or com­put­ers and then call that cap­i­tal projects. Dis­burse­ments should be on the ba­sis of pri­or­ity of projects. To say we are do­ing zero based bud­get­ing, I think that is a big, fat lie.

You spoke ear­lier about the need for states to stop tak­ing for­eign loans and bor­row more lo­cally, at a time the fed­eral gov­ern­ment is con­sid­er­ing rais­ing more ex­ter­nal debts, how can we rec­on­cile that?

For the fed­eral gov­ern­ment, you can un­der­stand why they are do­ing ex­ter­nal debts. But for states, i don’t think so. The fed­eral gov­ern­ment’s rev­enue from oil is paid in for­eign cur­rency so the for­eign lenders do not even need to come into Nige­ria be­fore they col­lect their monies. They can debit your JP Mor­gan ac­count in the US and col­lect their monies. But state gov­ern­ment does not have that lux­ury. Also fed­eral gov­ern­ment guar­an­tees a state gov­ern­ment bond. So for states, they don’t have that lux­ury of dol­lars com­pared to fed­eral gov­ern­ment. And then for the fed­eral gov­ern­ment, I don’t think this ap­proach is good. You are bor­row­ing at an in­cred­i­ble pace. You have out bor­rowed the whole pri­vate sec­tor. So is this how we are go­ing to con­tinue? We hear of coun­tries bor­row­ing at two per cent, but we say be­cause of in­fla­tion, we are bor­row­ing at 19 per cent. That math does not work out for me be­cause you are emas­cu­lat­ing pri­vate cap­i­tal in the sys­tem. The pub­lic sec­tor alone can­not give you growth. The sec­tor that can give you growth is the pri­vate sec­tor. And if you are emas­cu­lat­ing that pri­vate sec­tor by high in­ter­est rates, how are you go­ing to de­velop?

What is your opin­ion on the 2018 Ap­pro­pri­a­tion Bill that was re­cently pre­sented to the Na­tional As­sem­bly?

The bud­get as pre­sented shows that the gov­ern­ment would con­tinue its phi­los­o­phy of ex­pand­ing in­fra­struc­ture, on ex­pand­ing debts and deficits and also putting more money to cap­i­tal al­lo­ca­tion. I guess this is the last lap of Pres­i­dent Muham­madu Buhari’s bud­get pre­sen­ta­tion be­fore elec­tion start. There would be a lot of pace for the im­ple­men­ta­tion of this bud­get. A lot of Nige­ri­ans are look­ing for­ward to this bud­get to see if there would be ac­tual and tan­gi­ble achieve­ments by this ad­min­is­tra­tion. So it is im­por­tant that the Na­tional As­sem­bly also con­sid­ers this in the pas­sage of this bud­get. We have a short win­dow of gover­nance next year be­cause there would be more pol­i­tick­ing. So, be­fore pol­i­tick­ing starts have the bud­get passed so that we can also fac­tor in the pro­cure­ment cy­cle which takes about three months and then we can get the projects im­ple­mented and then have re­sults to show to the elec­torates next year. So I guess that is why this bud­get is re­ally im­por­tant. It is also im­por­tant that the fed­eral gov­ern­ment puts a proper think­ing to rais­ing rev­enues. Most of the as­sump­tions for the rev­enues are just bloated. The fed­eral gov­ern­ment needs to think of how they can ex­pand VAT, com­pany in­come tax and how they can build other op­por­tu­ni­ties that can pay tax, be­cause what we are see­ing right now is that there are so much huge as­sump­tions on rev­enue.

Onig­binde

Oluseun

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