Budget Credibility at National and Sub-National Levels in Nigeria

John Olla – Executive Director, Acthub

Nigeria, one of Africa’s largest economies, has been facing challenges in ensuring budget credibility at both the national and sub-national levels. The country has a history of poor budget implementation, with a significant gap between budgeted and actual spending. This has led to a lack of trust in the government’s budget process and has made it difficult for the government to secure funding from international institutions and investors.

Factors Contributing to the Lack of Budget Credibility in Nigeria

Several factors contribute to the lack of budget credibility in Nigeria. One major issue is the budget process’s lack of transparency and accountability. This can include using unrealistic budget assumptions, lack of oversight, and insufficient monitoring and reporting of budget execution. Additionally, Nigeria’s high corruption level can lead to the embezzlement of funds and misallocation of resources.

Another significant challenge is the lack of coordination and collaboration between the national government and sub-national entities, such as states and local governments. This can result in conflicting policies and a lack of alignment between national and sub-national budgets, making it difficult to achieve budget credibility at both levels.

Efforts to Improve Budget Credibility in Nigeria

The Nigerian government has recently improved budget credibility by implementing fiscal transparency and accountability measures. For example, the Government of Nigeria has implemented the Fiscal Responsibility Act (FRA) 2007 and the Public Procurement Act 2007. The FRA aims to ensure that the government’s financial management is transparent, accountable and sustainable. In contrast, the procurement act aims to ensure that public contracts are awarded fairly, transparently, and non-discriminatory manner.

Additionally, the government has taken steps to combat corruption, such as establishing the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and other related offences Commission (ICPC) to investigate and prosecute corruption cases.

However, these efforts have yet to address the underlying issues fully, and significant improvements are yet to be seen. Improving budget credibility requires government efforts and the active involvement of citizens and other stakeholders in the budget process, including civil society organizations, the private sector, and international partners.

Conclusion

Budget credibility is essential for ensuring the effective and efficient use of public resources and is key to improving the well-being of citizens. While the Nigerian government has made efforts to improve budget credibility, more needs to be done to address the underlying issues and to involve citizens and other stakeholders in the budget process. Achieving budget credibility at national and sub-national levels will require a coordinated and collaborative effort from all stakeholders.