States’ Budget Performance in the face of recession

by Ajadi Daniel

Analysis

Even a lay man knows that this is a peculiar period in the country’s economic sojourn, not only because of the recession, but because there had never been a time since the inception of the Nigerian state that the lopsided and unitary federal nature of the country presents it with greater challenges than now. What I meant here is that the recession is biting hard on us because most of the states in Nigeria are mere political establishment designed to placate interest groups, in the real sense of it they are not economically viable.

Hence in times like this, they hardly can fashion a way out of this economic conundrum.

Most of the states are not making headway; a large number of them survive on a beggarly monthly federal allocation, in the absence of which they cannot effectively carry out their constitutional responsibilities. Except for some few states such as Kano, Lagos, Ogun and those in the Niger-Delta, for the latter, it is safe to say that they are probably surviving because they are oil producing states, not exactly because of any ingenuity credited to them.

Beyond the figures, the budget performance for this year has been very low, not only because the figures are saying so, but because the human condition of the average Nigerian gave credence to that. As a matter of fact it is very difficult to get an unbiased figure on the state of budget performance except official figures which are usually not reliable. But we can attempt an analysis of the details or picture what budget performance would be in some states based on some events that took place in the course of the year.

The country entered recession in the course of the year, which was further complicated by the Niger-Delta struggle which consequently affected oil production in Nigeria, thus reducing revenue. But even before then, most states in the country had gone broke, the concept of bail-out funds found its way into our lexicon towards the end of last year when it was discovered that some states are unable to pay their workers. You would recall last year that there was a report that the Federal government used $2.1bn dividend by the NLNG to bail out some of the states to cope with the problem of unpaid public sector salaries. There was also a special intervention package by CBN, and this year, the Federal government also gave a N90 bn bail out for the states.

Yet, in spite of this, governance in most states is nothing more than the activities in government offices with little impact on the lives of the people. Most of the states have been unable to implement their budget and those that are partly able to do so are heavily indebted. The dearth of figures makes it impossible to assess budget performance in this part of the world, but it is no news that the people are experiencing hardships in those states that are fund trapped and only surviving on federal allocation, thus making matters worse in a time such as this. In some states, there is stagnancy in budget implementation; they are not doing more than maintaining the machinery of government. The leadership newspaper recently did a report on budget performance in most states in the country, and it explained how poor implementation cripples sectorial performance across states.

It would take more than bail-out funds and other special intervention to keep the states on track, they just need to look inward

The states need to be creative in terms of funds generation and prioritize their spending until the cloud of recession lift. There is need for proper accountability beyond the usual shenanigans of fund not being available to finance budget, it is not enough for the governor to say this, but it is important that the people be made to actually see that funds are not coming in, and then made to understand what the ones available are used for. The states need to be creative about diversifying their economies to reduce their reliance on not only federal allocations but also bail-out funds, I have a believe that it is difficult for us to achieve true fiscal federalism because most of the states in the country don’t even want it.

We should begin to think about having town hall meetings on budget performance and implementation. The governors should not only go to their state assemblies for budget presentation, but they should also be there for budget performance and implementation.

Yet, there are questions begging for answers, what exactly is the extent of budget implementation in those states that are unable to generate enough to fuel the oil of government, can each state account for their budget this year?, can we trust the governors to implement the 2017 budget if they are unable to secure a higher budget performance this year, if fund was their problem or the biggest challenge to implementing the budget, it is not wrong to say that they might still be challenged by funds given the present reality of the economy.

Perhaps these questions would be answered when we begin to demand budget accountability and transparency from our governors, until then, we can as well continue to move on.