Yar’Adua, unspent funds and Vision 2020
By Joel Nwokeoma
Arguably, what seems to be an unsung ‘achievement’ of the President Umaru Yar’Adua administration since inception in 2007 is the introduction of the concept of “unspent funds” into Nigeria’s political and administrative lexicon. Incidentally, it’s the consequences, rather than the meaning, of this concept that have agitated the mind of a wide spectrum of commentators and observers of events in Nigeria for awhile now. Same way, it’s on the basis of the consequences of this atrocious reality that posterity would be obliged to judge this administration, especially against the backdrop of its oft repeated determination to make the country one of the Top Twenty economies by 2020 through the instrumentality of Vision 20/2020.
“Unspent funds”, for the purposes of conceptual clarification, explains the unwholesome incidence of inability of a government ministry, department or agency (MDA) to expend the funds statutorily appropriated for it in the budget. What this translates to is that, owing to the extant lack of capacity and institutional inability of the recipient MDA to expend the funds so appropriated on projects and programmes in the budget, which should impact directly on the citizenry within the financial year, it is thus compelled by a subsisting directive to return the funds to the treasury within a stipulated period, usually before the beginning of another fiscal year. It needs not be mentioned that this has some dire implications for the economy in particular. And, as Senator Bukar Abba Ibrahim reportedly opined recently, “the returning of unspent funds does not make economic sense because it is not that the treasury needs the funds so returned but because the MDAs were unable to spend the money due to certain technicalities”.
Suffice it to point out that the incidence of unspent funds in Nigeria, as unhelpful and ungainful as it is to national economic development, predated the President Yar’Adua administration. It was, in fact, one of the defining features of the Olusegun Obasanjo administration as ministries rarely spent their funds within the stipulated timeframe on approved capital projects leading to phenomenal non-performance of the national budgets. Instead, they competed among themselves in organizing every manner of events at the twilight of each year to ensure that all monies appropriated to them were spent before the new budget was passed. The seeming difference now is that the present administration looks to have criminalized the spending of “unspent funds” in any new financial year through a Presidential Order on MDAs to return unspent funds to the treasury. It was in compliance to this presidential directive that a former Minister and Minister of State as well as top officials of the Ministry of Health were in 2008 prosecuted for allegedly sharing among themselves unspent funds of the ministry by the Economic and Financial Crimes Commission (EFCC).
Obviously, it is the fear of prosecution which made that the various MDAs scamper to return the unspent funds in the 2008 budget in recent months. At the last count, the National Assembly estimated that the sum of N450 billion has been returned to the treasury from the 2008 budget. Intriguingly, this seems to tickle the President who celebrates this bizarre ‘achievement’, without taking cognizance of the consequences and economic costs attendant thereto to the nation.
According to media reports, more than 60 per cent of the over 20,000 capital projects listed for execution under the 2008 budget, including about 1000 power projects across the country, may have been scuttled and their votes returned as unspent funds. And, for an administration that is pursuing, at least so it said, the goal, or is it fantasy, of making Nigeria one of the 20 most developed economies in the world, this evident poor performance in budget implementation is one failure that is as inexplicable as it is indefensible. Curiously, while funds meant for capital projects across the country were being returned by MDAs, efforts were made by the selfsame MDAs to spend their recurrent budget. There is no better name for national economic sabotage than this!
As the Vanguard Newspapers lamented in its editorial of Monday, February 2, (it is disturbing enough that) “while all recurrent expenditure, which included mostly disbursements in favour of civil servants, were almost totally exhausted and in some cases exceeded, the capital expenditures which benefit the general public were returned to the treasury, not because there was no need for them, as anyone visiting schools, hospitals and traveling on our roads would testify, but because most of the projects were hostage to lethargic leadership”.
What beggars the belief of many is that this administration seems helpless to the recurrence of unspent funds, after all it claimed to have appropriated the funds ab initio in pursuit of its self-imposed 7- Point Agenda, given that, as a recent investigation showed, most of the projects slated to boost power supply, as well as those in the health, educational and transport sectors were not executed, and appropriated funds returned. The Ministry of Works, for instance, reportedly returned N56 billion at a time it is owing contractors N100 billion, with thousands of kilometers of roads across the length and breadth of the nation deteriorated, claiming lives and properties, impeding economic growth and progress and making life brutish and hellish on earth for millions of Nigerians. The Chairman, Senate Committee on Works, Senator Julius Ucha was reported to have even described as “sad and unfortunate” the eagerness of the ministry to return funds appropriated to it in the midst of mounting indebtedness to contractors who had completed their contracts.
If the scenario at the Ministry of Works is heart-rending, that in the Ministry of Health is simply depressing. In 2008, N29.129 billion was appropriated in the budget for over 700 capital projects including rehabilitation and equipping of University of Abuja Teaching Hospital; establishment of the National Tertiary Hospital Commission; procurement and distribution of 25 life support ambulances to health facilities at two for each teaching hospital as well as procurement of boat ambulance and other emergency equipment for the Niger Delta among others. Interestingly, the ministry has so far returned N11.344 billion unspent capital votes to the treasury at a time a recent report noted that “WHO is not comfortable with Nigeria in its health performance”, ranking it 187 out of 191 member countries in terms of poor health record, in which some less endowed countries with both human and natural resources performed better than Nigeria. The maternal mortality and child morbidity situation in the country is said to be one of the worst in the world while Nigeria’s polio incidence is the worst in Africa with the country even becoming, most embarrassingly, an exporter of the disease in the world, ranking with countries like Afghanistan, India and Pakistan. (According to the latest edition of PolioNews, over the past months, polio from northern Nigeria has spread west to Benin, north to Niger and east to Chad, and the possibility of further spread is magnified). Yet, the Ministry of Health returned unspent funds to the treasury, whatever that means.
Against the foregoing backdrop, the President needs be reminded that the incidence of returning unspent funds, a euphemism for institutional incapacity to utilize appropriated funds for public good, which, unfortunately, his government has turned into an art of sorts, is one big challenge facing the realization of his lofty, but largely uncharted, Vision 2020 and 7 –Point Agenda. This realisation should necessarily nudge him into taking actions that would mitigate its recurrence.
Amongst these actions and measures should be the setting of timeframes for the implementation of project items listed in the budget for which funds have been duly appropriated. There is no use appropriating funds MDAs lack the capacity to utilize at a stipulated timeframe. It is in this light that the recent directive for MDAs to prepare implementation plans for the execution of projects in the 2009 budget becomes instructive. But this could be more effective if MDAs are required to submit these plans as they defend their budget proposals at the parliamentary hearings. Besides, appropriate sanctions should be stipulated and meted out to MDAs that return unspent funds to the treasury when their projects are largely unexecuted. Another measure government should consider is the categorization of returning unspent funds as an act of economic sabotage moreso when the consequences and economic costs attendant thereto to the nation and its citizens outweigh the amount eventually returned. Or, can anybody consider the value of lives lost on roads not rehabilitated from unspent funds thus returned?
The leadership of a country that totters on the brink of near economic collapse, accentuated by the current global financial meltdown, like ours, on account of decayed or non-existent infrastructure, should be outraged by the incidence of unspent funds from poorly executed budgets. This is so because the lack of capacity to spend appropriated funds in the budget is one of the Twin Towers obstructing the attainment of set goals, however well designed in any economy. The other one is corruption, which unfortunately, already has a strong foothold in the country.
Nwokeoma, a 2008 Fellow of the Media Advocates Program (MAP) on Budget of the ActionAid International, Nigeria, lives in Lagos.