We are almost at the end of the eighth month of the year and about four months to the end of the financial year which runs from January 1 to December 31 of every year. In accordance with the Financial Year Act, the budget should run for the period of the financial year. The Fiscal Responsibility Act requires the performance of specific acts within timeframes specified within the Act. The demands of the law seek to introduce order, sequence, a logical framework and predictability into the fiscal system. The laws also seek to promote popular participation, accountability, transparency and greater value for money in government’s fiscal operations. However, a number of fiscal activities that should have been done in respect of the 2014 federal budget and preparations for the 2015 budget seem to be in limbo. If anything is happening, it is only known to the Ministry of Finance and the Budget Office of the Federation. Other Nigerians have been kept in the dark while the fiscal laws are violated with impunity.
The FRA requires the Minister of Finance through the Budget Office of the Federation to monitor and evaluate the implementation of the annual budget, assess the attainment of fiscal targets and report thereon on a quarterly basis to the Fiscal Responsibility Commission and the Joint Finance Committees of the National Assembly. The report is expected to be published in the mass media and on the website of the Ministry of Finance not later than 30 days after the end of each quarter. As of today, the reports of the first and second quarters of 2014 have neither been prepared nor published and the Ministry of Finance and Budget Office of the Federation have continued acting as all is normal. Nigerians have been kept in the dark about how much have been realised as revenues and what expenditures have been incurred on their behalf by the Federal Government. What exactly has been released and cash-backed to the Ministries, Departments and Agencies and what have the MDAs been able to utilise? This is not the way to go in a democracy.
The same FRA requires the Medium Term Expenditure Framework which should guide the budget to be ready and endorsed by the Executive Council of the Federation by the end of the second quarter, being the end of June. For the 2015-2017 MTEF, nothing has been heard of it by the end of August. As usual, it would be presented late to the legislature and the approval will be stalemated on the benchmark price of crude oil. The 2015 budget will then be prepared and presented late and of course the legislature will pass the same late. The case for early preparation in an election year is more clearly made by the fact that politics is already trumping governance. It only takes a discerning mind to know that preparations have to start early to avoid unnecessary delays. In all these developments, the welfare of the people is relegated to the background because the minister of finance and the Budget Office of the Federation simply refuse to do their job at the right time.
Even the process of preparing the MTEF has been short-circuited; the background Medium Term Sector Strategies is now in the realm of fantasy and imagination. Nigerians have been informed that the MTSS has been replaced by the Transformation Agenda – a policy document prepared without popular participation and which to a great extent contradicts other high level policy documents such as Vision 20:2020. In the Obasanjo days, there were consultations with stakeholders in the civil society and the private sector during the MTSS. But all these were for yesterday and not the new technocrats of the new order. The MTEF from previous years experience has been reduced to a watery document prepared by ill-equipped technocrats who simply prepare an MTEF to satisfy all righteousness, not to meet the demands and stipulations of fiscal laws and policies.
One would have expected that lessons would have been learnt from previous years’ reports. The reasons leading to failures would have been avoided while best practices would have been replicated and the critical success factors accentuated for the realisation of budget programme goals. No, not in Nigeria; a reading of the budget implementation reports in the last five years only shows the repetition of the same challenges and failures. Even the good points are thrown away; no benchmarking with the best in class and the same fiscal felonies and misdemeanours are repeated year in year put. When it has been proved over the years that late submission of budgets by the executive to the legislature leads to late passage by the legislature and late passage leads to poor capital budget implementation, one would expect a reasonable Ministry of Finance and the Budget Office to start the process early. Seeing that budgets crafted by technocrats without popular inputs have failed, one would have expected a more popular approach to budget preparation. Repeating the same experiment without varying the chemicals and environmental conditions and expecting different results is an apt description of insanity.
The funny aspect of this is that the little progress recorded in previous administrations in terms of new fiscal laws, policies and systemic opening up was under the same leadership. What has suddenly changed that the same person leading the Ministry of Finance is now championing retrogression? Why are we witnessing an attempt to scrap the Fiscal Responsibility Commission right under the nose of the person that was part of the team that championed it in the first place? Did the commission make so many demands for the Ministry of Finance to live up to its responsibilities under the FRA? What exactly went wrong? Why is it very difficult to tell Nigerians what has come in as revenue and the expenditure so far on a quarterly basis. When has that become rocket science? Something is not adding up somewhere and reputations are at stake. Is it that the advice of technocrats for fiscal reform has been shot down by political hawks? Too many questions: If the elbow room in terms of political support that will guarantee a good performance is no longer there for the leadership of the Ministry of Finance, what is the honourable thing to do? History is being made and history is being written.
There is still an opportunity for the Ministry of Finance to run the last lap of this administration’s tenure in a way that remedies some of the observed defaults, it is not too late to get things right and stop the retrogression.