Tuesday, 27 June 2017

Why budgeting must factor critical features to be effective?

 Image result for pictures of National assembly

By Gabriel Alonta

The importance of budgeting at the national and sub-national levels cannot be over-emphasised. In Nigeria for instance, the budget and the budgeting process has continued to generate a lot of controversies and criticisms owing to the nature of its planning and execution by the different arms of government responsible for budgeting in the country. The budget process in Nigeria has often been criticised on the ground of total negligence of people’s needs in the planning stages.
A budget is a system of rules guiding decision-making that lead to a budget. It goes through budget formulation and approval by the legislative. The budget process is rooted in the constitutional provisions, the House and Senate standing rule, orders and practices, as well as, administrative guidelines. The budget process can detect both the degree to which a policy debate can actually occur as well as the policy outcomes.
It is also imperative to note that the essence of budgeting is to gage the level of resources for carrying out government programmes and projects. Another important task of budgeting is to identify and assess alternative ways that resources could be used more effectively to accomplish the objectives of government.
Recently, there was an organised budget discussion by the UNIZIK Business School (UBS), titled “Dr. Emmanuel Egbogam budget roundtable” held at the Nnamdi Azikiwe University, Awka, which attracted prominent personalities who shared their views on the budgeting process in Nigeria.
One of the participants, Prof. Pat Utomi, a renowned economist and founder of Lagos Business School, blamed the current economic recession in the country on lack of plan and foresight which a good national budget could have taken care of easily. He contented: “Our major problem is that we lack planning; and if there is no discipline then budgeting is a waste of time. In beginning the budgeting process, it must be matched with where the people are going. But beyond revenue and expenditure, budget has to do with discipline and execution”.

The notable economists said that we Utomi noted that we should rely less on revenues flowing in an area that is less than 12 per cent of our GDP. The government has to encourage the private sector investment because they could raise future taxes from them, adding that government depends so much on crude oil.
“To say that the recession was caused by fall in oil prices is to say that you are a bad manager. The fall in oil prices should have been seen coming and the nature of the budget process would begin to respond almost automatically and if you have a saving which the budget should have taken care, then, it will give you cushion when challenges emanates”.
Another participant, the Deputy Chairman, Committee on Appropriations, House of Representatives, National Assembly, Hon. Chris Azubuogu, listed factors that hinder the actualisation of national budget as: poor funding of budget, lopsided budgeting, deficit budget and high domestic debt profile which he said is currently in trillions of Naira, absence of budget education among others. 

Azubuogu said that the challenges especially in the area of citizenship participation which are part of what we are doing already by the committee constituted by the Speaker of House of Assemly, Yakubu Dogara, will look at the total process of the budget and reform them to make it more institutionalised. Proper budget has to engender growth because budget is both product of short and long term. “The budget process is the way an organization goes about building its budget.  A good budgeting process engages those who are responsible for adhering to the budget and implementing the organization's objectives in creating the budget”, he said.
The Vice Chancellor of Nnamdi Azikiwe University, Awka, Prof. Joseph Ahaneku noted that the maiden event would help to articulate from the basis, the community, home, identify the needs and critical stake issues endowed in the various community and process them in order to plan for the entire wellbeing of such community and when we aggregate everything, it will become plan for our state and the nation at large.
“The presentations and decisions reached by the erudite contributors must be put into practice to fix the budget process in the country that has been in jeopardy with negligence of her citizenry. We need to have a convocation of both the traditional, religious and other stakeholders in various community for us to understand that knowledge is power; and that the moment we stop thinking, then, we are dead.
“We must recognise excellence, celebrate excellence, celebrate good ideas because we are to rule the world with ideas; and by ideas, all these will help us to really advance from bursary nation/society to productive society”, he stated.
The Director of UNIZIK Business School, Prof. Nkemdili Nnonyelu stated that budgeting must be done with a sense of seriousness, hence, the need for an innovative approach to always make the process efficient and result oriented.

“The targets and strategies of a budget must be based not just on national development goals, needs and aspirations of the people, but also on a realistic assessment of the financial resources, executive capacity, institutional framework as well as the application of appropriate budgeting system for social change and economic development”.

In his contribution, the former Minister for National Planning, Dr. Osita Ogbu pointed out that lack of national consciousness was responsible for the poor implementation of national budget in the country. The idea is to tell the state what is wrong with our budgeting process and how to fix it because policy governs economics, we must get the policy right, otherwise we won’t get the economics right.

“Budget is an economic instrument but most importantly it is also a political instrument. Politicians should be conscious of the fact that development can only occur when they act to the best interest of the society and not to their own benefit. It is only in this case that we begin to have national plan that will lead to national development since the priority that is already agreed by a nation is paramount”.
Ogbu also added that the discussion is pivotal for the development of the nation or state, as it gives important information to policy makers to know what they must do if we are to advance as a country.

On his part, Dr. Okey Ikechukwu said that budgeting process in Nigeria should be based on the National Development Plan. Agencies of government should do proper budget monitoring so that each budget section is preceded by an evaluation of performance of previous budget not in terms of just expenditure or disbursement but in the achievement of goals intended by the budget. “If I budgeted N30 for your dress, and I showed that I spent N30 on your dress, people need to see the dress on your body and that will be proof that I spent on your dress”.

It is evident in Nigeria that the preparation of the Federal budget is a shared responsibility between the executive and the legislative arms of the government.
Ikechukwu said: “Therefore, there is no gainsay that in Nigeria, timeliness in the budget process will promote the systematic and overall achievement of several government policies, including the much needed move out of the current recession. Meanwhile, no capital budget in Nigeria ever performs near the 100 per cent mark. When we lack enough wisdom to do, wisdom consists in not doing at all”.
In the face of plummeting resources plus the fact that budget implementation is a race against time, the time has come to stop the implementation of the nebulous constituency projects, lest these legislators, in their total indiscretion, might someday have us begin to pay for their village and family projects under some disdainful guise. 

In his closing remarks, the Vice Chancellor contended that most of us are not patriotic that is why we have continued to fail. “If we all are genuinely patriotic the way we love ourselves and our family, a lot of the things will change in this country, that is the signal and the real orientation we have to change.


“Budget process must begin to be seen beyond the mere annual ritual that all sectors appear to perceive it, if we must make good progress as a nation. All areas of challenges highlighted earlier must therefore, be taken up as points of attention”, he concluded. 

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