Low budget transparency ranking as a wake-up call


Uche Uwaleke

In relation to Nigeria, the outcome of the 2017 Open Budget Survey conducted by the International Budget Partnership is nothing to cheer about. According to the survey in which participating countries were assessed based on three pillars of transparency, participation and oversight, Nigeria ranked behind many African countries including Rwanda, Zimbabwe and Liberia!

In a year that the country was adjudged to have fared better in rankings by global organisations, the 2017 Transparency Open Budget ranking for Nigeria represents a red ink on the country’s score card. While the government rolled out the drums quite justifiably to celebrate the performance of the country in the World Bank’s Ease of Doing Business ranking from the 169th position in 2016 to 145th position in 2017 (a remarkable improvement for a country that recently went through five quarters of negative output growth in a row), the 2017 Open Budget Index published recently by the IBP which showed a decline in the case of Nigeria from a score of 24 in 2015 to 17 in 2017 based on a 100-point scale has only served to dampen the drum beats.

To be sure, the Open Budget Index is the world’s only independent, comparative measure of central government budget transparency which assesses, on a biennial basis, the comprehensiveness and timeliness of budget information that governments make publicly available. It considers countries that score above 60 on the Open Budget Index as providing sufficient budget information to enable the public engage in budget discussions in an informed manner. It equally considers countries scoring above 60 on participation and oversight as not only providing adequate opportunities for the public to participate in the budget process but also providing adequate oversight practices. In the 2017 survey on African countries, South Africa led on the index and was closely followed by Uganda, Senegal, Ghana, Namibia, Kenya, Morocco, and Egypt.

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On the issue of budget transparency, the International Budget Partnership noted in its report that “the Government of Nigeria provides the public with minimal budget information”. In order to improve transparency going forward, it recommended that the country should endeavour to publish in a timely manner a Mid-Year Review and Audit Report as well as the Pre-Budget Statement and In-Year Reports. Furthermore, effort should be made to “increase the comprehensiveness of the Executive’s Budget Proposal by presenting more details on classification of expenditures for future, prior, and budget years and on classification of revenues for future and budget years.”

In relation to access to information and public participation in the budget process, the IBP noted that “the Government of Nigeria is weak in providing the public with opportunities to engage in the budget process”. On this score, it recommended that the government should establish formal regulations that oblige the Executive to engage with the public during the formulation stage and at the same time ensure that the budget proposals are comprehensive and detailed. It also recommended the conduct of legislative hearings to review and scrutinise Audit Reports as well as the establishment of “formal mechanisms for the public to assist the supreme audit institution to formulate its audit programme and participate in audit investigations”. Indeed, the budget process in Nigeria should provide opportunities for professional bodies, organised private sector, the academia, Civil Society Organisations, organised labour and interested members of the public to make inputs on which programmes should be a priority for funding each year especially with the adoption of the Zero-Based Budgeting system.

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With regard to oversight, the IBP noted that the “legislature and the supreme audit institution provide limited oversight of the budget”. It recommended, among others, that the country should ensure that the Executive’s Budget Proposal is made available to the lawmakers at least three months before the start of the budget year, that a legislative committee examines and publishes reports on in-year budget implementation online and that the office of the Auditor General has adequate funding to perform its duties, as determined by an independent body such as the legislature or the judiciary. Again, the importance of timing in the budgetary process cannot be overemphasised. The Legislature is supposed to interrogate the budget bill prepared by the Executive before passage. Extant literature support the fact that the timing of the submission of budget proposals significantly affects the quality of analyses and deliberations by the Legislature. Late submission of the budget bill makes it difficult for the National Assembly to undertake proper scrutiny of the budget and so the approval process is hamstrung by the limited time available for debate.   As a rule of thumb and consistent with the IBP recommendation, a national legislature requires a minimum of three months for effective consideration of the annual budget estimates.

From every indication, the 2018 federal budget of consolidation is already running behind schedule like virtually all the ones before it since the return to civil rule in 1999. The negative impact of budget delays cannot be overstressed especially on an economy that has just exited a recession. It goes without saying that the undue delay in the passage of the budget creates fiscal uncertainties which could dampen investors’ confidence and present a drag on the current tempo of economic recovery. Therefore, the government (particularly the Executive and the Legislature) should ensure that the country returns to a predictable budget calendar as quickly as possible.

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Indeed, the recommendations by the IBP are not impossible to implement. They only require the political will to see them through. To help close the identified gaps in the budget process and make it more transparent and less vulnerable to corruption and abuse, a budget law is required similar to the US Congressional Budget Act of 1974 which lays out a formal framework for developing and enforcing a “budget resolution” to guide the budget process. The envisaged budget law would provide a timetable  for the various budget stages  as well as encourage stronger collaboration between the key stakeholders namely government agencies, Ministries of Finance, Budget/National Planning, Fiscal Responsibility Commission and Civil Society Organisations. It should equally ensure that, like the general bills, the Appropriation Bill is subjected to public hearing.

Indeed, the low ranking on budget transparency is a wake-up call on the government and provides an opportunity for Nigeria to undertake a comprehensive budget reform that will close the structural and procedural gaps which limit transparency and accountability in the budget process.

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