Planning and budgeting in fantasically corrupt countries

By Obadiah Mailafia

FORMER British Prime Minister David Cameron infamously described ours as “a fantastically corrupt country”. This is what you get when England is ruled by immature Eton boys. But we have to concede that when it comes to budgeting, our parliament has often let us down.

One of the most influential works in social science in the seventies and eighties was the book by Naomi Caiden and Aaron Wildavsky, Planning and Budgeting in Poor Countries (Wiley & Sons 1974). Their message was that rational planning and budgeting in low-income countries is technically impossible due to unrelenting popular demands and pressures, in a global business environment of commodity price volatility and unpredictable public finances. They argued therefore that long-term planning should be jettisoned in favour of what they termed “continuous budgeting”.

In the context of the Cold War, developing countries swallowed their message hook, line and sinker. Through the structural adjustment programmes that we were coerced into implementing by the Bretton Woods institutions, we in Nigeria threw away the baby with the bathwater. Few know that economic planning in Nigeria was quite successful. Anyone in doubt should read the works of the doyen of Nigerian economics Pius Okigbo.

Paradoxically, the countries that bought the new heresy sank deeper and deeper into the mire while those who ignored them — South Korea, Singapore and Malaysia — prospered. The eminent American economist Wolfgang Stolper was one of the architects of our first National Development Plan 1962-1968. Stolper, who kept a meticulous diary, noted that our country had far better prospects than Singapore, Malaysia and India. He was apparently incredibly impressed by first-generation public servants such as Simeon Adebo, Ali Akilu, Pius Okigbo and Ojetunji Aboyade (“what Aboyade did not know in industrial economics was not worth knowing”).

Like many Nigerian intellectuals of my generation, I became irritable whenever foreigners criticised us or tried to force their ill-thought economic nostrums down our throat. I now believe that your enemy can be your greatest helper. Your duty is to listen politely. Whenever the IMF visitation were in Beijing, I’m told the mandarins would entertain them lavishly. And whenever it was time for them to peddle their heresies the Chinese would feign perplexity. They have had statehood for more than two millenniums and they know that the best way to defeat an enemy is without firing a single shot – by mind and soul-force. Obafemi Awolowo termed it “mental magnitude”.  Today, China has overtaken America in GDP, although it’s in everybody’s interest to pretend that this is not the case. Wise leaders would do well to imbibe the royal counsels of ancient Africa: “Talk softly and carry a big stick”.

We should go back to the traditions of rigorous economic planning, taking on board the lessons of world economics and the imperatives of global national competitiveness. Planning will help us to better allocate resources on a more rational, long-term basis while imposing discipline on the budgetary process, fostering nation building and mass mobilisation.  The youths of this country, with their incredible energy and creativity, are a nuclear force waiting to be unleashed for national transformation.

Although we celebrated the recent finalisation of the 2017 Appropriation Bill, it is regrettable that we could only manage to do so in mid-June. From November last year when the estimates were submitted to parliament to May this year, the entire process was overtaken by unseemly drama akin to a seedy downmarket Nollywood film.  Year-in-year out, we are faced with the same intrigues and loud howls about ‘budget padding’.  Over breakfast last week, I engaged in a lively conversation with my old friend Bright Okogu, former Director-General of the Budget and currently Executive Director at the African Development Bank. He painted a rather sorry picture of the greed and grand larceny that underpins the appropriation process.

The National Assembly is expected to be the spring and fountain of our democracy. I fear that they have exhausted their moral capital in the eyes of the Nigerian people. When the executive submitted a proposal of N7.3 trillion, they upped it to N7.4 trillion. In assenting to the final figures, Acting President Yemi Osinbajo was astonished that several line items were smuggled into the final document. He has promised that they will be revisited.

Some would have noted the little matter of the kerfuffle between the National Assembly and the executive, where the former reaffirmed their constitutional right to maim the budget anyhow they like, quoting Section 81 and other relevant chapters of the 1999 constitution. That kind of spat is, in itself, a recipe for confusion. It certainly will not promote good public financial administration. These problems will continue to dog our budgeting system unless prudence and wisdom are made to prevail.

We need to understand that there is the letter of the law on the one hand, and the spirit of the law, on the other. Where they don’t agree, or application of the literal rule may have perverse effects, most civilised nations would be inclined to err on the side of the spirit of the laws.

There is also the imperative of good form. Most civilised democracies follow the general principle that the executive does the estimates and executes the budget while the legislature focuses on appropriation and oversight. Although parliament has powers to decrease the budget, it would be considered rather odd in most democracies for them to increase the quantum. To ensure balance, parliaments in the mature democracies give the Chairmanship of the Appropriation Committee to the opposition. It is also considered rather bad form for legislators to determine their own budget and emoluments in the blatantly self-interested game-theoretic manner that obtains in Nigeria. Not to mention the judicial point that it  is patently criminal to engage in budget padding for the purpose of appropriating funds that will go into private pockets or to contractors to whom they have undeclared business interests.

Going forward, we may need the Supreme Court to undertake judicial review of the entire budgetary process in order to demarcate clear lines of responsibility between the executive and parliament to ensure administrative order and timely appropriation for the common good, welfare and happiness of all Nigerians.

 

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