Bad governance entrenched: Nigeria’s persistent violation of budgeting norms

Recently, on March 7, the British Chancellor of the Exchequer presented the UK government’s annual budget to parliament. The Financial Times and other British broadsheets pored over the budget and each devoted over 15 pages of a special supplement to analysing its intended and likely impacts on different categories of people, on families, on businesses, and on the wider economy.

That’s the kind of serious attention government budgets should get. This is because budgets are about how a government will spend public money, and everyone expects them to improve lives, make society better, and grow the economy. But that’s not what government budgets do in Nigeria. They violate the universal norms of budgeting in two significant ways.

First, budgets in Nigeria are not worth the paper they are written on in terms of prioritisation and implementation. Second, the budgeting process is a triumph of private gain over public good in the sense that politicians in both the executive and legislative arms of government have perfected the art of inflating and padding budgets to squirrel away public funds.

Let’s start with the first point. Take any federal government budget. There’s virtually nothing in it aimed directly at ordinary Nigerians. So, if, like their British counterparts, Nigerian newspapers were to analyse the budget for its positive impact on people’s lives, on businesses, on society, and on the economy, they would have very little to say. A federal government budget covers capital expenditure, recurrent expenditure, and debt servicing. Recurrent expenditure, which is basically the cost of running the state, always accounts for the largest share (36.1 percent in the 2024 budget). Capital expenditure accounts for the second-largest portion (31.6 percent). Then, debt-servicing takes the third big chunk (30.1 percent). This budgeting ritual is repeated every year, with virtually no positive effect.

Think about it. After 24 years of progressively large annual budgets since Nigeria returned to civil rule in 1999, this country has no quality education, no quality health service, no electricity, and no clean water for most of its citizens. Youth unemployment is high, at about 40 percent, and more than 140 million Nigerians are multidimensionally poor. Of the top ten universities in Africa in 2024, South Africa has seven; Nigeria has none. Why should South Africa’s state universities make up seven of Africa’s top ten universities (Ghana has one in the top ten) while no Nigerian state university cuts the mustard? Which country has ever developed without a first-class education system, a first-class healthcare system, robust human development and human capital, regular electricity, etc.? The truth is, Nigeria never gets its budgeting priorities right!

Even so-called capital or infrastructure projects are often poorly implemented. A few years ago, the United Nations Industrial Development Organisation (UNIDO) lamented the chronic and acute problem of project failure in Nigeria. According to UNIDO, “Nigeria invests millions of dollars on projects yet experiences over 60 percent project failure within the framework of the governmental system.” Everyone knows about the phenomenon of abandoned government projects, several thousand of which spread across the country. Then there’s the phenomenon of budget failure. In 2017, Bukola Saraki, then Senate President, said, “The Senate is tired of having budget documents that, at the end of the day, when it comes to implementation, don’t mean anything.” Despite the high-falutin names given to budgets and the hype around them, poor budget performance is a perennial problem in Nigeria.

Q: “The lack of detail and transparency around the budget allocations for the projects rightly bothered BudgIT.”

To buttress that point, permit me to bore you with the names President Buhari gave his budgets. The first one in 2016 was dubbed “Budget of Change” and described as “a historic milestone for us as a nation.” The second one in 2017 was tagged “Budget of Recovery and Growth.” That of 2018 was “Budget of Consolidation.” The next one in 2019 was “Budget of Continuity.” That of 2020 was “Budget of Sustainable Growth and Job Creation.” The 2021 budget was dubbed the “Budget of Recovery and Resilience.” That of 2022 was the “Budget of Economic Growth and Sustainability.” Buhari’s last budget in 2023 was the “Budget of Fiscal Sustainability and Transition.”.

Now, if you reflect on the above budgets and their lofty names, what is your verdict after Buhari’s eight years in power? Well, mine is simple. All eight budgets can, collectively, be called “Budgets of Failures and Unfulfilled Promises”. The budgets promised great things, but nothing of the sort happened. That’s why Bola Tinubu is right to tag his own N27.5 trillion 2024 budget—the largest in Nigerian history—”Budget”of Renewed Hope.” Essentially, with that title, he is admitting that his party, the APC, betrayed the Nigerian “hope” for eight years under Buhari, and he’s promising to “renew” the “hope.” Unfortunately, however, Tinubu’s “renewed hope budget” is already a failure. First, one-third of the budget, a whopping N9.18 trillion, is a deficit, which means that he will borrow heavily to fund it. Second, such a huge budget is a recipe for waste, misappropriation, and outright embezzlement.

Which brings us to the second problem of budgeting in Nigeria: budget padding. That’s topical because of Senator Abdul Ningi’s allegation that the 2024 budget was “padded” with 3.7 trillion. The Senate hastily suspended Ningi. But the statement by BudgIT, the highly respected budget transparency NGO, is instructive. BudgIT said it couldn’t confirm the existence of budget padding, but there was an expenditure of N3.32 trillion allocated to statutory agencies with no line-by-line breakdown. It added that, despite the N100bn already set aside for “constituency projects” in the budget, the National Assembly introduced an additional 7,447 projects, totaling N2.28 trillion, in the budgets of the MDAs.

The lack of detail and transparency around the budget allocations for the projects rightly bothered BudgIT. The NGO said: “Nigerians have no idea how the funds will be spent, nor can they monitor or ensure the funds are used appropriately. It leaves room for mismanagement and misappropriation of funds, as nobody can hold anybody responsible or accountable for anything.” Anyone who criticises Senator Ningi for raising concerns about the padding of the 2024 budget should reflect on the BudgIT statement.

Of course, budget padding is not new. Since 1999, federal legislators have inserted their own projects in the annual budgets. President Obasanjo tried to stop this practice by introducing budget allocations for “constituency projects.” The allocations started in 2003 with about N66bn annually but rose to the current N100bn. Yet, despite the annual allocations for constituency projects in the Executive’s budget proposal, the legislators continued to insert projects into the budgets of the MDAs. The practice continued unabated under the governments of Presidents Yar’ Adua, Jonathan, and, indeed, Buhari, whose first budget in 2016, like Tinubu’s first budget, was marred by a budget-padding scandal. At the heart of the “constituency projects” and budget padding is the legislators’ diversion of budget resources to themselves. Even Obasanjo, who introduced budget allocations for constituency projects, said, “You and I know what a constituency project means; it is simply corruption.”

Last week, Sunday Vanguard published a damning report titled “Constituency Projects Stink: How Legislatures Pad Budgets, Make Billions.” The report cited investigations by the Independent Corrupt Practices Commission (ICPC), which found that constituency projects were executed and the funds pocketed by companies owned by lawmakers. So, legislators pad budgets for “constituency projects,” become contractors for executing the “projects,” and connive with the MDAs to transfer the funds to themselves. Nigerian legislators are among the world’s highest-paid lawmakers; they are among the world’s most corrupt too!

But this is a function of Nigeria’s deeply opaque and accountability-deficient presidential system. Such flagrant and rampant violations of budgeting norms won’t happen under the parliamentary system. To avert irreversibly entrenched bad governance, Nigeria needs a less corrupt, more accountable, and more transparent system of government.

Olu Fasan

Political Economy

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