BudgIT highlights corruption loopholes in the budget process, calls for urgent budget reforms

BudgIT, a civic-tech non-profit organization leading the advocacy for transparency and accountability in public finance in Nigeria, has called on the government to audit security spending and close loopholes for corruption in the budget process.

While speaking on BudgIT’s recent publication, “Demanding Budget Reforms for Resource Optimization”, Mr Gabriel Okeowo, BudgIT’s CEO, said, “2021 has been a horrifying year for Nigerians concerning security as the country combats mutating forms of crime and terror across all its 36 states; this is despite allocating over N10.02 trillion to security between 2015 and 2021. In the 2021 budget, the entire security sector’s allocation was N1.97 trillion, representing a 14 per cent increase from the N1.78 trillion allocated in 2020.”

Increased resources allocated to the security sector means that less money is available to develop other sectors; thus, there is a need for more scrutiny of how these allocations are budgeted and spent. Likewise, BudgIT’s publication noted that various non-security related government agencies now request and receive allocations for “Security Votes”, an opaque feature of the Nigerian security ecosystem devoid of accountability. In the 2021 budget, a total of 117 federal agencies received allocations for “Security Votes” worth N24.3 billion, despite many of these agencies already having allocations for “Security Charges” to cover each agency’s security needs.

Furthermore, BudgIT observed that the little budgetary allocation provided to other sectors are plagued with various loopholes for leakages and theft of public funds.

“Our investigations into the 2021 budget revealed at least 316 duplicated capital projects worth N39.5 billion, with 115 of those duplicate projects occurring in the Ministry of Health. This is very disturbing especially considering the health infrastructure deficit and the raging COVID-19 pandemic affecting Nigeria.”

Even worse, agencies now receive allocations for capital projects they cannot execute. For example, the National Agriculture Seed Council has an allocation for N400 million to construct solar street lights across all six geopolitical zones, while the Federal College of Forestry in Ibadan in Oyo State got N50m for the construction of street lights in Edo State.” These are aberrations that need to be corrected.

Okeowo enjoined the federal government to urgently block all loopholes in the budget creation and implementation process, some of which are highlighted in the recently released publication.

“Nigeria is already haunted by a staggering N3.31 trillion debt servicing burden which will wipe out nearly 41.63 per cent of the projected N7.99 trillion 2021 revenue. The federal government can maximise the little public funds left by blocking the leakages BudgIT has identified.” Okeowo added.

Nigeria’s budget can be an excellent tool to accelerate economic recovery, but if the budget is left with the current loopholes, it can cover corruption and grand theft. The Nigerian government already plans to borrow N4.69 trillion to meet its expenditure needs in 2021; thus, it cannot afford to allow these borrowed funds to be stolen by a few corrupt elites through loopholes in the budget. Virement provided in the Fiscal Responsibility Act 2007, or the opportunity for Corrigenda recently provided in Section 16 of the 2021 Appropriation Act Implementation Guidelines published by the Federal Ministry of Finance, Budget and Planning in March 2021 are handy starting tools the government can immediately use in plugging loopholes.