Revenue leakages and health budget cuts – National Mirror

Very soon, only the assent by President Muhammadu Buhari would be necessary to transform the 2016 Appropriation Bill into implementable fiscal instrument. However, public concern on the budget would linger for a long time to come. This is against the backdrop of the confounding shortfall in the nation’’s revenues and the attendant sharp cuts in the allocations to some critical sectors of the economy. The allocation to the health sector readily comes to mind. Of the N6.08 trillion budget estimate for 2016, the Ministry of Health gets N257.3 billion, 4.23 per cent of the total. In 2015, the ministry got N259.751 billion (5.78 percent) out of N4.493 trillion.
The 2016 budget proposal for the health sector is a far cry from the 15 per cent of annual budgets agreed by heads of state of African Union countries at their April 2001 Abuja Summit. Records show that whereas 33 per cent of the countries have consistently allocated at least 10 per cent of their national budgets to health with only Tanzania, Rwanda, Swaziland, Ethiopia, Malawi and Central African Republic attaining the 15 per cent benchmark. Nigeria has been oscillating between three and six per cent. Understandably, paucity of funds is responsible for this. However, we believe a more creative public finance management template could improve Nigeria’’s financial profile.
A recent report by Tax Justice and Governance Network (TJ&GN) reveals that revenue leakages arising from corporate tax incentives granted multinational corporations at the end of the initial fiveyear tax break put Nigeria’’s loss at over $20 billion (N6 trillion) between 2010 and 2014. The corporate tax incentives in the analysis of Tax Justice Network Africa include, reduction in corporate income tax, rates and tax ‘‘holidays’’ offered to investors for specified periods to attract new foreign direct investments in special economic zones. Also in a recent comparative report by ActionAid on tax incentives granted over the years by Nigeria, Ghana, Côte d’’Ivoire and Senegal, Nigeria recorded the biggest loss of about $2.9 billion to tax waivers annually – more than the Federal Government’’s annual budget for the health sector.
The report further stated that the tax holiday extension meant the loss of about $2 billion in revenue and another $1.3 billion as rolled over allowances where the same tax was effectively foregone twice. It would be recalled that in 2014, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) raised alarm over the incessant loss of the nation’’s revenue to tax waivers. It was on this observation that the Nigeria Customs Service (NCS) reported that import waivers granted various individuals and groups by the Ministry of Finance between 2011 and 2013 amounted to N1.4 trillion. Many concerned civil society organisations find it worrisome that despite persistent drop in the nation’’s revenue from the oil and gas sector, the Federal Government has not been innovative in searching for alternative sources of funding.
Who wouldn’’t know that plugging the identified massive revenue leakages in the country would be a veritable way to make more money that would become handy for improved public service delivery? This newspaper is particular about the health sector and this is because health is wealth. In this era of dwindling oil revenue, the only road to economic prosperity for Nigeria is for the government to guarantee basic minimum package of healthcare to every citizen for optimal human resource utilisation and manpower developmental output. A Civil Society Legislative Advocacy Centre (CISLAC) 2013 study indicates that in Nigeria, one in 13 women dies during pregnancy or childbirth, and 12 per cent children die before reaching the age of five.
The study also shows that only 39 per cent births take place with assistance of medically trained personnel. Who doesn’’t know poor budgetary allocation to health sector is the cause. Similarly, the Association for the Advancement of Family Planning (AAFP) under the aegis of Partnership for Advocacy in Child and Family Health (PACFaH) has confirmed that child spacing has direct impact on the health of the family and economy of a nation. Yet, budgetary allocation to child spacing in the contexts of Nigeria Family Planning Blueprint and the Costed Implementation Plans is an endemic challenge. We also believe that the periodic budget cuts as they affect the health sector may not reflect the best strategies for the realisation of the high level policy goals in Maternal Newborn and Child Health (MNCH).
Only N19.44 billion is earmarked for MNCH in the 2016 budget. And Nigeria’’s polio free status might also be undermined by inadequate funding for Routine Immunization throughout the country. With over 11 million stunted children, Nigeria has the second highest number of stunted children globally. Civil Society Scaling-up Nutrition (CSSUNN) has reported that malnutrition contributes to nearly half of all child deaths globally. The country continues to face malnutrition challenges as a result of inadequate budgetary allocation to nutrition line items. As at 2012, the World Health Statistics rated Nigeria as the second largest country after India with the highest rate of Under-5 mortality in the world, which meant she lost 124 under-5 children in every 1000 live births. Efforts in tackling the childhood killer diseases have been undermined by lack of specific budget line for the procurement of the recommended commodities at all levels. Certainly, a change is imperative.