How Open Is Nigeria’s “Open Treasury”?

Samuel Atiku, Senior Project Officer, SPARK, Nigeria, Chloe Cho, Research Analyst, and Jason Lakin, Senior Research Fellow — Mar 12, 2020

At the end of 2019, the Nigerian government took an important step toward greater fiscal transparency by launching the Open Treasury web portal. All ministries, department and agencies of the central government are now required to publish daily reports of payments above N5million ($13,770). The regulation issued by the President creating the portal also called for all monthly budget performance reports, quarterly financial statements and annual financial statements to be published within 14 days after the end of the reporting period.

These steps promise to create opportunities for greater scrutiny of low budget execution in Nigeria, something IBP’s previous research has shown is a major public finance challenge. As recently as 2018, the federal government underspent its overall budget by 37 percent, with even more severe underspending in many ministries and agencies.

In 2017, Nigeria scored just a 17 out of 100 on our Open Budget Index, making it an outlier when compared to peers in Sub-Saharan Africa, such as Ghana (50), Uganda (60) and South Africa (89). Among several reasons for Nigeria’s poor performance was the fact that it did not report extensively on budget implementation during the year, and year-end performance information was also scanty and highly aggregated. In its 2017 audit report, the supreme audit institution reaffirmed the challenges with Nigeria’s budget execution data, complaining that as of June 30, 2019, 265 agencies defaulted in the submission of financial statements for 2017 and 11 agencies have never submitted financial statements since they were created.

To conduct our prior analysis, we used data from individual ministries, departments and agencies (MDAs) that was made available by the Budget Office of the Federation. However, we were not able to go below the MDA level to understand what drove differences in performance. For example, while we found major underspending in the economic sector in 2015, we also found variations in performance across MDAs within this sector. The Ministry of Works and the Ministry of Power, for example, had relatively low underspending compared to the Ministries of Petroleum Resources, Trade and Investment, and Labour and Productivity. Without further disaggregation of the data, we could not say much about why this might be the case.

We were thrilled, therefore, when we learned of the new budget data release on Open Treasury Nigeria, as we believed this would offer an opportunity to further explore these kinds of variances. The new data do allow us to go a bit deeper into such issues. For example, we can see that in 2018, the headquarters of the Ministry of Labour massively underspent its research and development budget, accounting for one third of total underspending by that agency. However, the portal does not contain similar disaggregated information on 9 of the 15 ministries in the economic sector. As a result, although we can see that the Ministry of Power, Works and Housing was underspent more than the Ministry of Labour, we cannot identify the areas of their respective budgets that were most underspent.

In many cases, the information available is also not complete. Under the Ministry of Labour, for example, we have data on the headquarters through December 2018, but we have data on the Industrial Arbitration Panel (IAP) only through September. Thus, we can’t be sure that the underspending on research and development by the IAP continued through the end of 2018 for comparison with the year-end figures from the headquarters. In the economic sector, even under the six ministries with data, 89 agencies (out of 165) and at least 90 sub-agencies (out of 185) have partial or no information.

In addition, the portal is not as user-friendly as it could be, forcing users to look at each agency individually rather than together under a parent ministry. This means that any aggregation or disaggregation is cumbersome. For example, looking again at the Ministry of Labour, we can see the expenditures of the headquarters and independent agencies like the IAP. However, these are separate files so it’s impossible to get a global picture broken down by individual agencies, followed by the sub-agency data. For example, we can see that both headquarters and the IAP underspent on research and development, at least through September. However, to put into perspective how much of total research and development for the overall parent ministry was driven by different agencies requires the user to pull together data from different sources and reorganize it, and there would still be considerable data missing.

The absence of information from state-owned enterprises, independent agencies and other parastatals also creates data and credibility challenges. In our previous analysis of budget credibility in Nigeria, we identified underperformance of customs revenue and “independent revenue,” which in Nigeria mainly refers to fees and service charges collected by independent agencies, as major drivers of Nigeria’s budget credibility challenges. These sources accounted for more than half of under-collection in most years. The new portal does include some additional information on independent revenue, breaking down its sources. However, the budgeted amounts for each source are not provided, rendering an assessment of performance against target impossible.

Overall, while Nigeria’s new portal allows us to understand more about the state of Nigeria’s public finances, it falls short of permitting systematic and rigorous analysis. Much spending remains opaque, and the lack of budgeted revenue for most sources means that this is also true for revenue. We recommend the following to make the portal easier to use and analyze data:

  • Upload missing data at the MDA level and fix broken links to data.
  • Consolidate disaggregated data and provide an option to look at different levels of expenditure within each MDA’s administrative hierarchy.
  • Include budgeted figures for all revenue and spending along with actuals

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