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Nigeria’s budget implementation constrained by weak revenue – Hamalai

The Director-General, National Institute for Legislative Studies, Prof. Ladi Hamalai, on Wednesday in Abuja said implementation of the country’s capital budget was constrained by weak revenue base.
Hamalai said this in her keynote address at a colloquium on “Journalists and Social Media Influences on Legislative Power of Appropriation/Budget Reform Process’’.
She said that late enactment of budgets, untimely and irregular release of funds and preponderance of unplanned projects were some factors affecting budget implementation.
The director-general stated that there was need for strengthened implementation capacity of Ministries, Departments and Agencies, stronger budget monitoring by the executive and effective oversight by the legislature.
She, however, said that the 2017 budget recorded an improvement with drastic cuts on wasteful spending.
According to her, more can be done to limit spending on controllable expenditure, especially in recession period.
Hamalai suggested that section 8 (1) of the 1999 Constitution should be altered, while sections 11 and 14 of the Fiscal Responsibility Act should be amended to promote a fixed and realistic budget calendar for the country.
She said that this would enable the president to present the budget to the National Assembly by September for consideration and passage before Nov. 30.
She said: “Also this will enable the president to assent to the Appropriation Bill by December.’’
While commending the introduction of Efficiency Unit in the Federal Ministry of Finance to review expenditure profile of MDAs, she said that the country’s budget was fraught with leakages, making it un-implementable.
According to her, in spite of efforts by the Federal Government to fight corruption, leakages were still prevalent in the system.
She said that though government budget was an important tool for economic development, it had generally not met the expectations of improved service delivery in Nigeria, unlike in many other countries.
She said: “Abundant leakages in capital implementation translate into erosion of resources and inability to complete projects and programmes and even when completed, quality challenges deplete performance.
“Instead of the budget being an economic instrument that could address the social and infrastructural deficit in the country, the nation’s budget was unfortunately largely designed based on political considerations.
“Part of the problems faced by the budgeting process in the country is that the budget itself is a political instrument instead of an economic blueprint.
“Nigeria’s budgeting system is a political instrument, where resources are allocated not based on priorities but on the number of MDAs.
“It is a political system rather than an economic instrument for development.
“There are about 1,000 MDAs and each has both capital and recurrent provisions, thus the tendency has been to allocate to all, though focusing on priority areas.
“Capital projects cannot be completed and some abandoned for years.” Hamalai further said that the wide gap between budget estimates and revenue had made the budgets un-implementable, adding that revenues generated by some agencies were not remitted to the Federal Government, and at times not reported.
She also faulted the Medium Term Expenditure Framework, which “is poorly prepared because of unreliable and incomprehensive data base’’.
On capital expenditure, she observed that it had been relatively low compared to recurrent expenditure.
She added: “In fact, actual capital expenditure has been 8.1 per cent of total expenditure from 2015.’’