Of Budget Seminars, Ringworms, and Leprosy, By Uddin Ifeanyi

If, however, last year’s instalment of these budget seminars serves as a useful point of departure, their focus will not be on the design of fixes for our leaky public expenditure management framework… In other words, as with the real economy, these seminars would be focussed on treating a bad case of ringworm on a leprous patient.

This time, you don’t have to flip through the pages of the newspapers. A brief look through the inbox would do just as well. The profusion of links on the topic clearly indicates that we are, once again, at that season of the year, when the financial services sector is abuzz with consultants claiming to be able to make sense of the 2018 Appropriations Bill. Budget-themed seminars, workshops, and talkathons are all the rage. No consultant is worth the description who cannot point to a perspective on the budget. Few banks can keep from sending their top personnel to these events. And no bank CEO is worth his salt, who doesn’t get a chance to pontificate at one of such occasions. All of which make the question “What is there to know about the federal government’s 2018 budget? Or put differently, can anything be known about the budget?”, a surprising one.

This amazement lasts only for as long as it takes to contemplate the fact that every bill must go through the National Assembly before the president’s eventual assent turns it into an act of parliament. Given then that the budget bill is but a proposal, it is even harder to make sense of the many budget sessions that have been organised around it. In explanation, I have often heard it argued that over the years, the tinkering by the National Assembly with the appropriation acts are often of a marginal nature. According to this perspective, it is then possible within the confines of the bill, as is, to try to discern government’s tax and spend intentions for the year. It is this Nostradamic need that the army of consultants that serve the financial services sector purports to be able to meet.

Yet, across the three tiers of government, annual budgets have failed, primarily, as statements of intent. The federal budget, here we take but the most glaring example, pretends to apply to the fiscal year that runs from January 1 every year to end-December of the same year. However, since we transitioned to civil rule in 1999, we have not managed to pass federal budgets in time. A cop-out prevents government from shutting down by allowing it to continue spending a portion of the last budget into the first quarter of the new year. Invariably, therefore, we get to convert the appropriation bill into an act by April of every year.

The very circumstances which make early passage impossible make efficient execution a daydream. Impediments in the path of both of these processes include the fact that we are still navigating the path through a very young democracy, an inability of major players in the system to look beyond narrow concerns…

The chain that leads from the not-so-salubrious consequences of the late passage of the budget to its poor implementation is, accordingly, not much of a surprise, either. The very circumstances which make early passage impossible make efficient execution a daydream. Impediments in the path of both of these processes include the fact that we are still navigating the path through a very young democracy, an inability of major players in the system to look beyond narrow concerns and see the bigger picture, and structural difficulties, including that presented by the Presidency’s “due process” office.

Much of these difficulties show up in the execution of the capital expenditure component of the budget. And this matters. Our poor infrastructure is complicit in our continuing underdevelopment. By one recent account, if light from the mains were steady, we should see an annual bump in domestic output growth of around 200 basis points. Who knows how much good roads, railways, and ports could add to that? Of course, good schools and healthcare facilities do not just bump up domestic output growth, they push the production possibility frontier that much further out. Social investment of this type creates, in other words, multipliers and accelerators that bump up the economy’s trend growth rate.

…the thrust of these consultant-driven talkfests focussed on fixing these shortcomings in the budgeting process, they would obviate much of the concern about their utility. But the difficulty with our governments and their budgets goes beyond process and procedural hurdles.

In this sense, were the thrust of these consultant-driven talkfests focussed on fixing these shortcomings in the budgeting process, they would obviate much of the concern about their utility. But the difficulty with our governments and their budgets goes beyond process and procedural hurdles. For if nothing at all, successive governments since 1999 have had no problems implementing the recurrent portion of the budget. None of the advertised impediments (both structural and conceptual) appear to matter in this regard. Does it matter that several years after committing to pruning the size of the state, more than two-thirds of the annual federal spend is taking up with paying salaries, procuring diesel for generating sets, and purchasing office stationery?

If, however, last year’s instalment of these budget seminars serves as a useful point of departure, their focus will not be on the design of fixes for our leaky public expenditure management framework. Instead, speaker after speaker would strive to demonstrate a familiarity with the details of the 2018 Appropriation Bill, and how these details affect the respective sectors of the economy. In other words, as with the real economy, these seminars would be focussed on treating a bad case of ringworm on a leprous patient.

Uddin Ifeanyi, journalist manqué and retired civil servant, can be reached @IfeanyiUddin.

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