BudgIT Foundation, a civic-tech organisation leading the advocacy for transparency and accountability in public finance in Nigeria and three other African countries, has raised concerns over critical issues on the 2022 proposed budget following its analysis of the 2,168-page document.
The organisation, in a statement issued by its Communications Associate, Iyanu Fatoba, listed that critical issues as including, the complete omission of the Niger Delta Development Commission’s (NDDC) capital budget from the overall budget, continuous unrealistic revenue projections, soaring year-on-year debt burden and weak accountability structure, among others.
According to the organisation’s CEO, Gabriel Okeowo, the omission of NDDC’s entire capital budget allocation from the proposed 2022 budget and public scrutiny is a source of concern, especially given the scale of alleged corruption and diversion of public funds that has afflicted this federal agency since its inception.
He said: “NDDC receives an average of N198.7 billion per year from the operating budgets of oil companies (between 2016 and 2018) in addition to the annual Statutory Transfers it receives from the federal government (the latter which is projected to be N98.7bn in the 2022 budget).
“The list of new and ongoing projects to be embarked upon by NDDC with this estimated N198.7bn in the year 2022 is glaringly missing from the 2,168-page 2022 FG budget details document and the 2022 Appropriations Bill sent to the National Assembly”, Okeowo added.
Also, the organisation also called for cautious optimism, especially as the proposed 2022 spending plan comes with a N6.26 trillion deficit, 80% of which would be borrowed, noting that this is particularly problematic when analysed within the context of the fact that FG has recorded a significant surge in its debt burden in the last six years with debt servicing wiping off over 90% of FG’s total revenue in recent times.
Commenting on the ugly situation, Okeowo said: “The size of FG’s new borrowing plans in 2022 is a serious cause for concern, especially as the FG spent over 90% of all its revenue in servicing old debts between January 2020 and June 2021. Also, FG’s 2022 deficit of N6.26 trillion represents 3.39% of Nigeria’s GDP, which is above the 3% threshold set in Section 12(1) of the 2007 Fiscal Responsibility Act (FRA).”
On revenue projections, BudgIT raised concerns about FG’s N10.13 trillion 2022 revenue target, noting that the federal government has failed to meet all its revenue targets in the past six years.
Commenting, the advocacy group’s Head of Research and Policy Advisory, Abel Akeni, explained that “as of June 30, 2021, Federal Government already missed its half-year 2021 projected revenue as it raised only N2.31trillion or 69.64% of the expected N3.31 trillion 2021 half-year projection as reflected in FG’s Budget Implementation Report.
“Making unrealistic revenue projections has serious implications on the country’s spiralling debt burden, as more funds would have to be borrowed to meet up with contractual commitments for public projects entered into in anticipation of high revenues.
“The alternative to borrowing more when revenue targets are missed is to have more abandoned projects in 2022 which would be an unwelcome addition to the 11,880 public sector projects that have been abandoned in the past 40years by different administrations at the federal and sub-national levels”, Akeni added.
The organisation commended the government on the progress made regarding the early presentation of the 2022 proposed budget, as this allows citizens to scrutinize the government’s priorities and commitment to effective service delivery.
This is even as it also affirmed that the Federal Government had recorded reasonable progress on transparency especially with initiatives like the Open Treasury portal by the Office of the Accountant General and budget transparency initiatives by the Budget Office of the Federation.
However, BudgIT pointed out that the had a very weak run on accountability of budgeted funds, citing as an example the accountability issues raised by the Auditor-General in FG’s Audit report between 2016 and 2018 which have still not been fully addressed.
In addition, it also noted that the full forensic audit report of the corruption scandals in NDDC was still not in the public domain despite commencement of the probe two years ago in October 2019, stressing that the government’s weak actions on accountability is not the best way to discourage corrupt state actors from mismanaging parts of the proposed N16.39trillion budget.
BudgIT therefore urged the National Assembly to include missing aspects of NDDC’s budget in the 2022 spending plan, revisit 2022 revenue projections, and take immediate action on all audit recommendations on NDDC and other MDAs as recommended in the relevant official government reports.
