Niger Delta States Record Poor Budget Performance in 2017

Niger-Delta-States-Record-Poor-Budget-Performance-in-2017

In 2017, Social Action carried out analyses and monitoring of the budgets of the states of the Niger Delta, as part of the process of monitoring development goals and tracking corrupt practices at the subnational level.

A detailed report will be published early in 2018.
Social Action’s budget advocacy activities are aimed at calling attention to the need for citizens to get actively involved in the processes of fiscal governance and engaging the government on incipiencies observed in the budget and the actual performance. Evidence indicates that where this is the case, the performance of governments have significantly improved, thereby enhancing accountability and transparency and reducing corruption.

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Open Budget Week 2017: Citizens’ Participation as a Tool for Effective Budget Performance

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The Open Budget Week 2017 of Social Action included activities aimed at educating the citizens on the need to support the call on the state governments in the Niger Delta to ingrain an open budget culture and enshrine the practice of citizens participation in all the phases of the budget cycle. The week-long budget advocacy campaign was targeted on the one hand at ensuring that citizens become interested in fiscal issues while pressuring subnational governments to become more engaging, transparent and accountable in the management of public resources.

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As Buhari presents 2018 N8.6 trillion budget for 2018 to NAS …Any hope for the people?

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By Isaac Botti, Programme Officer, Social Action, Abuja.

The Nigerian federal government on Tuesday, November 7, 2017, presented its 2018 Appropriation Bill to the National Assembly for consideration and approval. The 2018 federal budget is tagged “Budget of Consolidation”, developed to consolidate on the achievements of the 2017 “Budget of Recovery and Growth”. Taken together, the impression is that the government crafted the earlier budget to revamp and stabilise the economy, while the current proposal is to solidify those gains.

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Nigeria Government Debt: Citizens are the Victims!

Nigeria-Government-Debt-Citizens-are-the-Victims

The text of press briefing on Nigeria’s debt profile and management by the Social Development Integrated Centre (Social Action), Abuja, Nigeria, October 19, 2017.
At a National Conference on Public Debt Management in Nigeria organised by Social Action in November of 2015 in Abuja, Social Action presented an advocacy research report on Nigeria’s debt profile and management, including state-level debts. Social Action warned that the indicators emanating from across the economic sectors do not support any further ramping up of debts. We called for action to towards sustained reduction in the debt profile of both the national and sub-national debts.
Rather than heed this intrinsic warning, government, making some shallow explanations, predicated on equally irreconcilable calculations and projections, embarked on a borrowing spree that saw the country’s debt shoot up from N12.06 trillion at the end of 1st quarter of 2015 to N19.6 trillion in June of 2017. Today as they say, the rest is history; we are all witnesses to the slumping of the economy under pressure, and how it went into recession.
Suffice it to say that loans or borrowing (as the case may be), is not and would never be a substitute for astute economic management. This is particularly true of a country like Nigeria where corruption and mismanagement have held the nation by the jocular. If it were, with the volume of money the country has borrowed in the past decades, Nigeria would have been an epitome of economic prosperity.
At this juncture, permit me to have us take a cursory look at a run-down of some of the loans taken by the country in the past 4 to 5 years;

Table 1: External Debt Outstanding by Economic Sector as of March 2014 (Amount in USD Millions)

Table-1-External-Debt-Outstanding-by-Economic-Sector-as-of-March-2014-(Amount-in-USD-Millions)• Source: Debt Management Office

Table 2: 2012 Borrowings

Table-2-2012-BorrowingsSource: The Sun (2012).

Table 3 2016-2017 Borrowings

Table-3-2016-2017-Borrowings

From this table, we can all see for ourselves the nature and manner of loan acquisition in Nigeria. Whereas the law specifies in Section 44 (1) of the Fiscal Responsibility Act (FRA) that;
“Any government in the Federation desirous of Any Government in the Federation or its agencies and corporations desirous of borrowing shall, specify the purpose for which the borrowing is intended… detailing the economic and social benefits of the purpose to which the intended borrowing is to be applied”.
The loan table (we had just reviewed) shows that many loans obtained are merely amorphous. With no clear-cut heading, project or purpose, they simply flout the Fiscal Responsibility Act. The FRA was abundantly clear when in S.48(1), it provided that; (1) The Federal Government shall ensure that its fiscal and financial affairs are conducted in a transparent manner and accordingly ensure full and timely disclosure and wide publication of all transactions and decisions involving public revenues and expenditures and their implications for its finances.
And so while it is the intent and purpose of the FRA to entrench transparency in the conduct of Fiscal and financial affairs including debt management, government has been in breach of these legal provisions. It is in this guise that Appropriation bills merely stating that part of budget revenue would be sourced from borrowing without specifying which activities and projects the borrowing would be applied have been severally prepared and passed by the legislature (in both Federal and State levels) in clear violation of the law. This same impunity has also been displayed towards S.41 (1) of the FRA which held unequivocally that (a) “Government at all tiers shall only borrow for Capital expenditure and human development…”. Loans have been taken to fund items that fall strictly under recurrent expenditure line including payment of salaries, overheads, funding of foreign trips etc. Till date, past and present governments have refused to set borrowing limit (Cap) for loan acquisitions as provided by law or allow popular input into loan acquisition decision-making process.

Loans and Nigeria’s Development
While the past administration did not display much responsibility as regards to borrowing, the present administration simply made a bad situation worse. Within a space of two years, the Nation’s debt profile shot up by an alarming 58% with no signs of relenting (going by the frequency and volume of loan requests going to the National Assembly). The federal government has been borrowing heavily and consistently over the years while refusing to hinge debt sustainability on realistic principles of revenue generation capacities of an economy instead of a mere academic ruse of debt to GDP ratio. Add this to unbridled sleaze and mismanagement, problems naturally set in: Nigeria has consistently for the past years now operated a deficit budget even as it devotes a painful chunk of budgetary allocation to debt servicing for projects or services the citizens hardly ever enjoyed. And so while Nigerians bemoan poor budgetary performance year after year, our creditors simply smile to the bank. A look at the figures tells this painful story;

Debt Serving Figures
Debt-Serving-Figures
At this juncture, let me draw your attention to a looming danger facing us all as citizens of this country; the government has initiated moves seeking to amend the laws to enable it formally borrow for Recurrent Expenditure. This is a looming danger to our economic health.
The story of Nigeria and debt is well known I believe to all of you and the experience of hardship and near economic strangulation in the hands of committee of creditors including the Paris Club, World Bank and the IMF in the form of austerity measures is still too fresh in our memories as Nigerians for us to go to sleep.
These monetary bodies including the IMF which are traditionally reticent especially in matters like this have come out openly to admonish the government to refrain from further borrowing stating clearly that the nation’s economy was not doing well enough to support such level of debt acquisitions and consequent debt servicing. We note that rather than the accumulated debts translating to real growth and development for the nation and by extension to better condition of living for the teeming population, it has continued to remain a burden as monies that could have been used to finance capital projects that would benefit the future generation are used to service existing debts.
We therefore reiterate our position that rather than acquiring more vague loans that does not impact on the lives of the citizens but of which the burden of repayment is shifted to both them and the future generation, government should put in place mechanisms to investigate and recover the several past failed loans, plug leakages which still abound in the system and ensure fiscal prudence; put in place policies and frameworks to activate the real sectors of the economy that have the capacity to engender growth and development such agriculture, manufacturing, mining, etc. Also, monies recovered from looters of public purse should be efficiently deployed to serve the need of the nation rather than borrowing.

Our Call:
1. We call on the Nigerian Parliament to show leadership and place moratorium on further borrowing by the country and order immediate investigation into the usage of the past borrowings. The report of the investigation should be made available to the public.
2. If it becomes absolutely necessary to borrow, details of the project to be executed with the borrowed fund be made public. The precise amount, interest rate and period of repayment should be published alongside in compliance with the provisions of the Fiscal Responsibility Act.
3. Monitoring/Progress reports of projects for which money was borrowed should be made available to the public regularly as stipulated by law.
4. Special audit of project implementations be carried out by the Debt Management Office in conjunction with the Fiscal Responsibility Commission and civil societies and findings made known to the Nigerian public who bear the burden of debt.
5. We also call on the Fiscal Responsibility Commission to stand up to its responsibility of effectively ensuring prudent utilization of all borrowed funds, particularly at state levels.

Vivian Bellonwu-Okafor
Head, National Advocacy,
Social Action.

Edo State Government Commits to Citizens’ Participation in the Budget Process

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In an assessment carried out by Social Action on ‘states of openness in the Niger Delta’, Edo state came out tops in the statistical analysis of open budget indices.

Social Action has congratulated the Edo State Government for ensuring that Edo State blazed the trail in the open budget process. Social Action’s message was conveyed during advocacy visits to senior government officials in Benin City on 21 July 2017. Officials visited included the Chairman, Committee on Information and Appropriation, Edo State House of Assembly, Hon. Damian Lawani, the Chief of Staff to the Governor of Edo State, Taiwo Francis Akerele and the Commissioner of Budget, Planning and Economic Development, Maryam Abubakar. Social Action’s Public Finance Accountability team included Programme Officers Prince Ekpere and Peter Mazzi and members of Edo State Open Budget Cluster.

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Whose Budget Is It Anyway? From Secrecy to Openness of Civic Spaces at the Sub-National Level

Taking-the-Open-Budget-Campaign-to-the-Motor-Park-in-Rivers-State(FILEminimizer)

HenshawKen Henshaw, Programmes Manager of Social Action, reflects on efforts to promote public finance accountability in the states and local governments of Nigeria

In Nigeria, quite often, accountability in the management of public resources is sacrificed on the altar of cronyism. This state of affairs may be more established at the sub-national levels where about half of all public revenues in the country are expended. While there is a justified focus on the federal government and the office of the President, in particular, many citizens do not tend to pay attention to the 36 states and 774 local governments which together receive almost 50 percent of all federally collected revenues – not to mention internally generated revenues. However, the significant allocations to states and local governments from the Federation Account on a monthly basis hardly translate into real benefits for the majority of citizens. Even more worrisome is the breeding of citizens’ apathy towards sub-national governments – the local government councils, in particular. Rather than the tier of government closest to the grassroots promoting participation, what we find is alienation, which further reinforces non-accountability of public officials.

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Monitoring Budget Implementation By States And Local Governments

Veterinary Clinic, Lafia, Nasarawa State

Social Action is working with citizen groups to mobilise community activists towards tackling corruption at the sub-national levels of government in Nigeria.

In the last quarter of 2016, activists and volunteers connected with Social Action’s Community Budget Advocates Committees (CBACs) went around monitoring the implementation of budgets in six states of Nigeria. In Abia, Akwa Ibom, Bayelsa, Delta, Kano and Nasarawa States, community budget advocates in the various locales visited project sites, interviewed project beneficiaries and government officials with the aim of ascertaining whether public funds were being deployed as appropriated in the budget.

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State of Open Budgets in Five States of the Niger Delta

state-of-open-budgets-in-five-states-of-the-niger-delta

This new Social Action briefing presents findings of research into the extent to which 5 states of the Niger Delta- Akwa Ibom, Delta, Rivers, Edo and Bayelsa- operate their fiscal processes in line with the principles of open budget. It equally examines how citizens in these states relate with and perceive government and its officials on fiscal matters.

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Social Action Engages Delta State on Open Budgets

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On the 31st of August 2016, Social Action’s Open Budget Cluster carried out a Citizens’ –Government Roundtable meeting on Open Budgets. The event aimed at ensuring that state annual budgets are open and available to citizens. This accessibility of state budgets will kick-start other forms of citizens’ engagement which will lead to more participatory and prudent fiscal practices.

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