Why budgets don’t work for you

SINCE the return of democracy, each budget presentation sessions have become a sort of annual ritual. The lawmakers would clap and clap as the president reeled out the figures. The ministers will join them in tow.

Most of the time, the ministers can’t hide their exaggerated excitement. You would want to wonder what the excitement is all about. Sometimes, it’s about the anticipation of the loot to come, at another state, it’s about the fact that they are in the hallowed chamber accompanying their boss and then it could also be the joy that they were seated side by side the crunchy guys in the National Assembly.

The president would give hope in torrents but speak scantily about the failure of the immediate past fiscal year. For the budget, the hope is always engrained in tomorrow.

A year after that fanfare, nothing much would be heard as per deliverables in the voluminous document and then the president returns to the chamber again. Sometimes under former President Goodluck Jonathan, the process was a bit demystified as the former leader twice sent the document through the then Minister of Finance. Jonathan had latched on to the phrase in the Constitution, which mandates that the president shall “cause to be laid” which is different from “shall lay” the budget on the table.  He believes that calling a joint session of the National Assembly was at his discretion.

Since President Muhammadu Buhari returned to power as elected president in 2015, the tradition had returned to its heights. The National Assembly looks forward to the joint session as if it is one that would turn around the fortunes of the nation. The same for members of the executive who all would abandon their duties that day to join the presidential train.

Notwithstanding the fanfare and ceremony weaved around the budget presentation each year, the people always get the short end of the stick at the end of the fiscal year.  The operators of the budget get to spend at least 70 per cent on recurrent votes, while they argue and haggle over the 30 per cent they manage to allocate to the service of the people.

At the end of the rigmarole, they will submit to have achieved some 15 to 20 per cent of capital releases, which is another far cry from actual implementation. Whichever way you look at it, the budget does not serve the people. It works for the civil servants and political office holders who write their wish into that document. It does not work for the president, who is made to read all manners of figures and raise hope where none would be delivered.

You may wish to ponder whether those who implement the budget wonder whether the document they deliver year in year out really impact the people. You also want to ask whether the economists who hop on the screens to analyse the budgets with all manners of scientific accuracy can beat their chests the documents they analyse meant anything to the man on the streets.

Looking back these democratic years, it is apparent the budgets have not worked. It is clear there is no real pathway to make it work even now. President Buhari hit at the fact that our budgets have not worked while presenting the N8.6 trillion 2018 Budget on November 7.

By the way, let me broadly identify that the budgets don’t work as a result of a coterie of reasons. The lack of sincerity of purpose is overwhelming; there is unrealistic projections; there is the intent to deceive (if not defraud the nation); there is a collective will to milk the cow dry in what you can call the donkey mentality, there is complete lack of accountability by revenue agencies and so many others.

You would also wonder, why would government budget for money it cannot earn and utilise the bulk of that budget on recurrent expenses? In 2017 for instance, government projected to make N5.08 trillion but it budgeted N7.441 trillion with recurrent expenses standing at 70.3 percent.  The bulk of N2.356 trillion was to be borrowed from domestic and foreign sources.

Why would a government keep borrowing to fund feeding and salaries, when it knows that borrowing would automatically increase the cost of debt servicing? While delivering the 2018 budget, Buhari hinted a bit at one of the key reasons for budget failure-lack of accountability by revenue generating agencies.

He said: “On revenue performance, collections were 14 percent below target as of September 2017, mainly due to the shortfall in non-oil revenues. A key revenue shortfall was from Independent Revenues; only 155.14 billion Naira was remitted by September 2017 as against the projected pro-rated sum of 605.87 billion Naira. This represents a 74 percent shortfall, which is very disappointing.”

“This recurring issue of under-remittance of operating surpluses by State Owned Entities is absolutely unacceptable. You will all recall that in September 2017, the Joint Admissions and Matriculation Board (JAMB) announced that they were ready to remit 7.8 billion Naira back to the Government. The shocking discovery was that in the last decades, JAMB only remitted an aggregate of 51 million Naira. This clearly illustrates the abuses that occur in state-owned entities as well as their potential for increased Independent Revenues, if only people would do the right thing. We all need to play our role to ensure the right thing is done. I would also like to remind Nigerians that the Whistle Blower lines are still open.”

As the president identified, one key flaw of the budgetary process is the latitude given to the revenue generating agencies to determine their budgets and remittances. One other flaw is the fact that their budget are outside the national budget and the timing is far at variance with that of the National budget.