BudgiT CEO urges govt to give infrastructure funding priority

 

• Says foreign debts not good for economy

Federal Government should ensure that a large part of the of the N8.6 trillion budget for 2017 targets infrastructure, Chief Executive Officer, BudgiT, a civic organization promoting transparency in governance,  Seun Onigbinde, has said.

Speaking on Tuesday during the maiden edition of the ‘Meet-The-Executive’ organized by the Finance Correspondents Association of Nigeria (FICAN) in Lagos, he said conversations of budget should involve everyone, because the impact of its full and efficient implementation or otherwise, also falls on the people.

Onigbinde, who spoke on the theme: “Budget Analysis, Monitoring and Implementation: The Role of Financial Journalists”, said there was need to ensure effective budget monitoring and implementation, insisting that government should bring accountability and probity to public finance spending.

“A large part of the budget should go to infrastructure financing. Government has to work very hard since it has limited time to prove its mettle as the 2019 elections approaches,” he said.

He said government needs to diversify its revenue base, and to enable it achieve its developmental objectives. “Many people are looking at this budget to see if there will be actual tangible achievement in it. The budget has to be quickly passed because  we have a short period of governance next year. We have a lot of time for politicking. But before the politicking, let’s have the budget quickly passed and implemented,” he said.

He explained that most of the assumptions for the revenue in the budget is bloated and said there is need to build and develop new strategies to attract more revenues. How are going to build other streams of income opportunities. There are huge assumptions on revenue. How are going to expand revenues from taxes. How are we going to raise Value Added Tax (VAT). Projections today shows that oil prices will continue to rise,” he said.

He also said that all hands must be on the deck when it comes to budget discussion, adding that how public finances are spent should concern everyone, and urged Nigerians to intelligent input into such expenditures.

Onigbinde also insisted that budget should focus on quality service delivery, implementation, and audit of whatever projects that have been executed using public finances. “After the projects in the budget has been effectively executed, there is need to audit the projects to ensure that transparency and quality value delivery,” he said.

According to him, only projects listed in the budget can be financed through it, and urged the people to ensure that present projects that have community benefits  for funding through public finances.

He said many state budgets are wishful lists, because the budgets are far higher than the state’s revenue bases. He said the performance of the budget and demand accountability on the part of the government.

“If government says the law demands that I pay my taxes, then they should also know that I have the right to know how the money is spent. We need to ensure that the resources of government are well spent. Public interest has to be a priority in spending public finances,” he said.

On the award of contract, he said everyone has the right to bid and execute government contracts. “Contracts should be made available for everyone to decide if he or she can win and implement it. It should not be given to people based on familiarity,” he said

He equally urged states in to desist from acquiring more foreign debts saying the burden of paying back in foreign currency will impact their revenues.

Onigbinde also called for a review of the constitution to allow for transparency on the parts of state governments to make public the details of their budget and the implementation.

Speaking yesterday at the maiden edition of the ‘Meet The Executive’ organised by the Finance Correspondents Association of Nigeria (FICAN) in Lagos, he said this will enable citizens to hold the government accountable.

BudgiT had recently challenged some state governments for not making available their budget for 2017.  Onigbinde however, said the state governments are not bound by law to make public their spending books. “There is no law that says the state government has to give out its budget. So, what we need is continuous advocacy. At the next constitutional review, we should put forward the issue of transparency, and why state governments should publish their budgets. We need to build up a moral issue around it,” he stated.

On foreign debts of states, he said states do not have the luxury of earning foreign exchange to pay off their foreign borrowings and they remain at the mercy of the exchange rate variations. Citing the Lagos- Badagry expressway project as an example Onigbinde said:  “When you assume something was packaged by private people and World Bank was involved, you would assume that standard ethics would have followed”.

BudgIT welcomes the relatively early presentation of the 2018 Budget and accepts that the economy requires significant fiscal injections to sustain and accelerate economic growth. Significant investment in Infrastructure, education, agriculture among others are also important if Nigeria’s hope to diversify government revenue and export base is to be sustained.

Improvement in tax administration which the government hope to push ahead within 2018 as highlighted in Mr President’s budget presentation speech is also welcome.  Equally important is the need to end the cycle of poverty through some form of social intervention.

In all, the 2018 proposed budget of N8.6tn and its guiding framework captures a majority of the objectives and philosophy which scholars, researchers and economist are inclined to think about when the need for fiscal injections arises. The philosophy of the current government to spend big due to the relatively slow economic activities is welcome and clearly understood.

As such, the capital expenditure allocation of N2.42tn is huge in nominal terms when compared to previous budgets. Given that almost all capital expenditure allocation will be financed primarily by debts, we hope that the line items in the budget will reflect such.

Nigeria cannot continue to borrow to buy cars, computers, retrofit office buildings at the detriment of the critical mass needed to end the cycle of poverty and improve the economy. We hope the biggest proportion of capital allocation will go into improving infrastructure, expanding access to education, health among others.

Also, We believe the revenue projection of N6.6tn is very optimistic considering the total retained revenue of the federal government including non-oil and oil-related revenue in 2015 and 2016 was N2.8tn and N2.6tn respectively.

Federal government non-revenue in the first six months of 2017 stood at N587bn and no significant facts suggesting the figure would double or triple in approaching the new fiscal year. Oil revenue for the 2018 fiscal year is projected at N2.332tn while the biggest bracket of government expected revenue is projected to come from the non-oil sector at N4.16tn.

We accept that the budget benchmark is of $45 per barrel is within the band but there has to be excessive caution in keeping the peace of the Niger Delta which is a crucial element in ensuring optimal production.

Overall, the budget proposal will need proper interrogation from all stakeholders and analysis will be better when the line items are released to the public in a timely manner in line with the fiscal responsibility act which the president swore to uphold.

Also, given that the biggest proportion of government projected revenue will come from the non-oil sector, Government will need to be more transparent about government finances including releasing more information on actual recoveries from loot purported returned by former public officials.