Subnational Budget Transparency in Nigeria
by Ryan Flynn, International Budget Partnership— Jan 11, 2016
Nigeria has long suffered from a lack of transparency and accountability in its public finances. The latest round of the Open Budget Survey found that, despite gains made between 2012 and 2015, Nigeria’s national budget remains one of the least transparent in sub-Saharan Africa.
Yet under the country’s federal governance system, spending at the national level is only part of the story. State governments not only receive a significant chunk of oil revenues, they also have power to raise funds independently, including through income tax. States share responsibility for delivering a range of basic services such as health, education, and investments in agriculture (see, for example, the portfolios of the state government of Lagos). Indeed around 47 percent of all capital expenditure (investments in infrastructure, property, and equipment) flows through state coffers. All in all, the effectiveness of state governments—and the transparency and accountability of state budgets—are crucial.
So how transparent and participatory are state budgets in Nigeria?
A new report by the Civil Resource Development and Documentation Centre (CIRDDOC) sheds new light on this question. Its findings are based on a subnational survey measuring budget transparency, participation, and the availability of public procurement information in all 36 Nigerian states. As with national budget transparency, the survey found large gaps in the amount of state-level budget information being made available: the average state budget transparency score was just 26 out 100 (the average score for participation was also 26; while the provision of procurement information was 30).
Beyond averages, however, the survey uncovered considerable variation from state to state. Two states (Ekiti and Cross River) score much higher than the rest across all three measures. Lagos, the country’s commercial capital, comes a distant third. Six states (Kaduna, Edo, Kwara, Katsina, and Oyo) languish at the bottom of the composite index, performing poorly across all three measures.
Budget transparency was assessed based on whether states produce and publish seven key budget documents. Unlike the Open Budget Survey, which only scores budgets documents that are published in a timely manner, states were given points for producing the document, scoring higher if the document was actually published. The report found most documents were produced by at least half the states, but far fewer were available to the public. Just one state (Cross River) was found to have published a Citizens Budget.
The report explores whether income level, legislative environment, or degree of oil dependence explain differing scores. Interestingly, none of these factors seem to account for the wide variation in scores. Wealthier states don’t seem to be more transparent or participatory, all states are relatively dependent on oil for revenue, and states with legal provisions on budget transparency in place seem to be failing to implement the letter of the law. Political will, the report concludes, seems to be the decisive factor at play: progress has been largely driven by individual state governments prioritizing reforms and ensuring their implementation.
Earlier this year, a new government led by President Muhammadu Buhari came to power on a platform of cleaning up the government. And the president has since intimated that tackling corruption and addressing the mismanagement of public resources are central to his governance agenda. Indeed newly appointed Minister of Finance, Mrs. Kemi Adeosun, recently announced that a new efficiency unit would be established to tackle wasteful public spending.
Such efforts are timely – the global slump in the price of oil is set to hit public revenues hard. But beefing up oversight from within government will only drive progress so far. Civil society and the media should be recognized as important allies in the drive for greater efficiency and accountability.
As the results of both the Open Budget Survey and the Nigerian States Budget Transparency Survey show, the ability for CSOs and the media to hold the government to account is severely constrained by a lack of budget information and a lack of space to participate in budget decisions. Beyond establishing new units in the finance ministry, the Buhari government should be encouraging scrutiny by CSOs and journalists by the public publishing the information needed to point out poor budgeting and inefficient practices.
While the political will and mandate for change seems exists, the question remains: will the government drive change by opening up or by tightening its grip?