Nigerians deserve a more disciplined and more rewarding implementation of the annual budgets by the states and Federal Government than they get now. Through the three-year rolling Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF), the Federation Account beneficiaries have an idea of the maximum revenue derivable from federal allocations when the assumptions underlying the projections come to pass. Crude oil receipts in excess of the set benchmarks flow into the excess crude account, which has the Sovereign Wealth Fund (SWF) as a distributary. Lately, the Domestic Excess Account, the Sure-P Account and the Excess Non-Mineral Revenue Account have been created. These many subdivisions of the Federation Account (FA) are confusing and uncalled for. Provided the FA accruals are equitably shared (and that is currently not the case), the beneficiaries have full entitlement to their share. Thus, contrary to the widely held notion of mendicant second and third tier governments, state governments do not deserve to be belittled for going to Abuja at set intervals in order to determine and collect what amounts are due to them from the revenue proceeds which the states collectively, rather than the Federal Capital Territory, had generated.
For the various tiers of government, projected federal allocations supplemented with estimated independently (or internally) generated revenue, possible grants and refunds give the likely total receipts against which budget expenditure plans may be prudently made. The series of projections are not sacrosanct as actual receipts might meet the set target, experience a shortfall or even record a surplus. Yet, as if they are capable of charming funds from thin air, most governments draw up budget spending proposals that are way beyond expected revenue receipts. To fill the gap, the Federal Government sets its eyes on deficit funding while the state governments look forward to raising loans. For example, the approved 2014 budgets of two particular states were 76 per cent and 117 per cent higher than anticipated revenue receipts.
Nonetheless, the tiers of government are not unaware that repayment of loans used to partly finance past budgets eat into the expected revenue receipts in future years. In fact, the recurrent budgets have streaks of deception. Common to all government is the absence of up-to-date and exhaustive lists of public servants, who account for the bulk of recurrent expenditure. Some pensioners under the old pension scheme which ended in 2007, continue to be owed pension arrears. Regular payment of salaries to sitting public servants is routinely delayed. However, the undisclosed strength of the public service allows the political office holders together with their numerous appointees whose roles constitute a duplication of some aspects of the core public service to appropriate for themselves an unknown and disproportionately high share of the wage bill.
With regard to the capital budgets, governments sell to the public the dummy of executing many new projects all over the place at the same time despite knowing in advance that available funds will not ensure their completion. And as often happens, after collecting substantial amounts as mobilization fees, contractors engaged to execute the projects barely break ground before abandoning the job altogether. The deeply established practice by the political class to embark on new projects while old and uncompleted ones litter everywhere appears increasingly to be a design to facilitate the sharing of the unutilised mobilisation fees in the form of kickback from the non-performing contractors.
Owing to the unwholesome practice, the Presidential Projects Assessment Committee found that federal MDAs alone as at June 2011 either had left at various stages of incompletion or were seemingly executing at least 11,886 projects put at a cost of N7.78 trillion and on which N2.7 trillion had been spent. No goods and no services were derivable from that humongous public expenditure. The states probably had as many abandoned projects. Such intentional waste! The practice, which produces nothing or minimal economic development and impoverishes the people, has continued apace at the federal and state levels ever since. Thus, the siphoning of public funds through both bloated wage bills and jumping from one uncompleted project to another provides the perfect recipe for all tiers of government to be perennially strapped for funds required to implement budgets to fruition thereby making the people to derive next to no benefit from successive government budgets.
Fifteen years into the democratic dispensation, it is long overdue to lay down ground rules for the beneficial implementation of the annual budgets through the National Economic Council. It is necessary to understand that, whatever the initial budget projections, actual revenue receipts could diverge and fluctuate widely. Consequently, there is need to ditch the well-oiled machinery, which has been put in place by the political class for looting the public treasury, in order to stretch available funds at anytime as far as possible for productive budget execution. The ground rule should include, firstly, the necessity for the tiers of government to eschew setting up uniform government institutions as well as the recognition that only a minority of the working population can be absorbed by the public service. And so the staff strength of the public service of each government should be manifestly published regularly. Secondly, government is a continuum. All administrations, whatever the make-up, should adhere to an existing (or draw up a ) priority list of projects and commit to completing all inherited uncompleted projects before embarking on fresh ones. In this regard, one, unscrupulous contractors who make away with mobilization fees should face stiff repercussions. Two, budgets should be executed within available resources. If and when any loans are raised for budget execution, the administration concerned should endeavour to liquidate the facility during its tenure as was mulled a few years ago.
The tiers of government generally do embrace the option of enhanced collection of taxes to supplement federal allocations. But there have been increasing protests in some states against multiple taxation. Tax payers should not be subjected to multiple taxation. Incidentally, despite the negligible benefits which past budgets have brought to the people, there now exists a Finance Commissioners Forum or pressure group which in recent times during the meetings of the Federation Account Allocation Committee espouses its “stand on the removal of fuel subsidy because it will be of such benefit to the state”. Democratic governments should learn to stick to any agreements struck with Labour or the people. Thus, considering that there have been continual accretions to the numerous FA subdivisions noted earlier, the FA beneficiaries had better look into the common kitty and share any accrued funds for budget implementation instead of resorting to domestic and/or external borrowing. The FAAC should also deeply reflect and discover that it pays to respect the exclusive federal responsibility for monetary matters by immediately stopping to aid and abet national economic underperformance. The FAAC is culpable of undermining sound monetary management through its insistence on collecting purported naira equivalent amounts procured from the Central Bank of Nigeria (CBN) in place of FA dollar accruable. In the absence of that wrong headed demand, proper infusion of allocations of FA dollar accruals will enable the CBN to accumulate swelling and investable external reserves, a small part of which may be deployed to operate a wholly Federal Government-owned SWF thereby eliminating the excess crude account in its present form.
Also, the state governments should note that the Nigerian Export Promotion Council and the Federal Ministry of Information will avail them lists of minerals and agricultural products which require only the conducive production conditions that are brought about through sound monetary management to be exploited and cultivated on a commercial scale by private sector investors or public/private partnerships. The accompanying thriving and expanding economy will be counted upon to create jobs and wealth as well as to generate abundant tax revenue to oil government business.
