Date Published: 12/30/09

Bayelsa: Strategic Imperatives of the 2010 ‘Budget of Impact’ By Idumange John

Budgeting has become a ritual carried out by government towards the end of every year. In Nigeria budgeting passes for a hollow ritual because most often budgetary provisions are not translated into concrete programmes and projects. But even amidst this sense of anomie, the budget is an important tool in governance since it is the translation in financial terms of government policies; a fiscal estimation of what government plans to spend and how to source for funds. The Budget also shows government priorities hence it constitutes the basis for measuring government commitments and how best to consummate such commitments in furtherance of the ‘social contract’.

In any democratic State, the budget is the second most important document after the constitution. This may just be because the constitution gives birth to it, provide for it and lays down procedure for its passage and implementation. In a working Society, the budget still enlivens the constitution since it is identified as a key instrument for the provision of all the requisite structure needed for the guarantee of the fundamental human rights. How accurately the budget is implemented to meet the economic and welfare rights of the people depends on the political will of government.

At the national level, the purpose of the 2010 Budget, "is to accelerate economic recovery through targeted fiscal interventions intended to further stimulate the economy and support private sector growth. Capital expenditure has been rationalised and prioritised to avoid spreading resources too thinly across too many initiatives." The aim was to create impact on five key priority sectors, namely: Critical Infrastructure; Human Capital Development; Land Reform and Food Security; Physical Security, Law and Order; and the Niger Delta. The Federal Government claims that these projects would benefit the masses of the country and are in conformity with existing bilateral agreements. The goals constitute part of the conditions for debt relief package negotiated between Nigeria and the Breton Wood Institutions.

Also, priority is given to key initiatives that would further bridge critical infrastructural gaps to reduce the cost of doing business in Nigeria. Besides providing alternative routes for the transportation of goods and services across the nation, investment in upgrading our railway networks and dredging marine waterways – notably the dredging of the Lower River Niger - will create gainful employment and increase disposable income.

Economic diversification will be emphasised by the development of our agro-allied processing, manufacturing, telecommunications and other non-oil sectors to achieve a broader base for employment generation and wealth creation. The Nigerian people remain the focus of our efforts, hence our commitment to sustaining investments in health and education to develop our human capital base. The capacity of our law-enforcement and security agencies will continue to be upgraded and we shall take all necessary steps to preserve our national security and sovereignty.

Critical to the accomplishment of set targets is to  address the situation in the Niger Delta to : ensure security and focus on developing infrastructure, grass-roots empowerment, and the preservation and restoration of the environment. This is imperative because of enormous contributions of the Niger Delta Region to the economic viability of the nation. 

The World Bank says Nigeria suffers limited budget credibility as reflected in large gaps between approved budgets and outturns. Other challenges according to the bank are limited and opaque budget reporting, with significant extra-budgetary operations, poor alignment of resource allocation with state development priorities, ineffective budget execution, on account of poor revenue forecasts and monitoring, and weak cash management. Sadly, since May 29, 2007, the Federal Government has not implemented any balanced, realistic budget.

In Bayelsa State, there is no doubt that the implementation of the 2009 budget met with several obstacles – the most buffeting was the dwindling revenues from crude oil occasioned by intense militant activities (No thanks to the militants and the hostage-ransom syndrome). The implication was that revenues from the Federation Account fell far too short of  projections. With the cash crunch and reforms of the Apex Bank exacerbated by the global economic recession, planned targets were either not met or met with some unavoidable deficits. It was the experience acquired in the implementation of 2009 that provided a basis for the philosophy of the 2010 budget.

The 2010 budget of Bayelsa  State is christened “Budget of Impact”. Accordingly, the philosophy of the budget seeks to entrench budget discipline and fiscal responsibility within the confines of subsisting laws. The philosophy is anchored on the desire of  government to deliver the dividends of democracy in the real sectors of the economy including the development of physical infrastructure. The Ministry of Finance and Budget seems to have realized that the dearth of critical infrastructure is holding back industrialization and its spill-over benefits from the State.

The budget therefore aims to direct government resources at existing viable ongoing projects that are targeted at achieving the developmental priorities of the State Government. This would be realized by aggressively pursuing the participation of the private sector in the infrastructural development of the State. This in line with the neoliberal economic paradigm that Public-Private Partnership is a panacea to most of the ills of economic development in transitional societies.

Recognizing that the development of the real sectors would confer dual advantage of job creation and revenue generation, the budget focuses on the sustainable development of Agriculture and the Central Business District, which would constitute the hub of industrialization. When this goal is pursued with vigour, there are great potentials for employment generation that would improve the general well being of Bayelsa people.

Government has also expressed its determination to enhance efficiency in public expenditure management by strengthening the capacity of government institutions responsible for driving efficient and effective public expenditure management. However, this writer believes that for Bayelsa State to fully and successfully entrench efficiency criteria in governance, the House of Assembly must not bring unnecessary pressure to bear on the executive in respect of the so called ‘constituency projects” which do not see the light of day. Another pre-condition is the dissolution of the Technical Committee headed by Mr. Atei Beredugo. The Technical Committee has inoculated a lethal vaccine o bureaucratic confusion, policy inconsistency and implementation flip-flop.

There is also a critical need for boosting Foreign Direct Investment (FDI), which would attract foreign partners to develop the economy. By encouraging FDI, the administration would have garnered enormous goodwill from major global financial institutions to catalyze the local economy and increase her competitive edge in capital investments. This is feasible because, already, government has concluded arrangements with the World Bank to provide support in planning critical sectors of the economy as well as educate principal officers on financial management based on well tested participatory, all-inclusive principles.

The budget of impact has set an aggressive agenda State is set to pursue investment in safe and highly rated instruments for reasonable economic returns. Perform periodic budget monitoring exercises to assess the efficiency and effectiveness of the State’s MDAs in the implementation of their appropriated budget; Optimise the State’s internally generated revenue. Further improve the State’s access to donor funds. Follow up and determine the issue of actual quantity of crude oil produced in Bayelsa State.

For now, Bayelsa State can leverage on ICT because a sizeable number of youths have acquired marketable skills in that area. But what is more important is to engage the available stock of intermediate manpower in productive activities to create wealth. As part of the Federal Government should complement the State Government’s efforts by establishing cottage industries through public-private partnership to mop up the middle-level manpower existing in the State. Specifically, the Federal Government can build an ICT Park in Bayelsa State as part of strategies for engaging the youths in productive activities. The nation’s aspirations to achieve the Millennium Development Goals in 2015 and Vision 2020 cannot be realized without giving the ICT Sub-sector a boost. Because of the capital intensive nature of ICT Parks , Nigeria cannot boast of one ICT Park but India has 35 ICT Parks, and India with its 1.2 billion population appears to have “colonized” the whole of the Sub-Saharan Africa and part of Western Europe in ICT.

From the above analysis, three strategic initiatives of the Budget of Impact of 2010, stand out. First is the urgent need to stimulate the State’s economy and increase employment opportunities. This can be achieved by adopting a neoliberal paradigm of facilitating the transition of government parastatals to commercially viable and financially autonomous entities to become self-funding and revenue generating. Already, the State Government has earmarked some of parastatals such as Bayelsa Palm Limited, Bayelsa State Transport Company, Bayelsa State Housing and Property Development Authority, amongst others for privatization.

The second strategic initiative is to pursue direct private sector involvement in some of its existing commercial entities and social projects. Examples of such entities include aquaculture, rice and shrimp projects, the Central Business District, the Nembe-Brass Road, the 350 Bed Melford Okilo Hospital, the Bayelsa Oil Company, Hotel and the Gas Turbine project. These initiatives are designed to complement government’s efforts to ensure the effective delivering social services  for accelerated economic development and wealth creation.

The third strategic initiative is to facilitate the concession of certain public services to competent private sector participants with proven track-records for delivering of quality service. The overarching aim is to boost the State’s internally generated revenue and allow the Government to focus its resources on the delivery of social services to Bayelsa people. However, it is only when the capital component of the budget is exceeds the recurrent component that development can be accelerated in all its ramification. If there is room for supplementary budget, the capital component should be increased to create the desired impact.

However, for the Budget of Impact to be a pragmatic reality, the Ministry of Finance and Budget should put in place an internal mechanism to oversee the full implementation of the budget unencumbered by the distractions from any Committee/Agency. In Akwa Ibom, Bauchi Edo and Kwara States, the unnecessary interference of other agencies in the activities of the Ministry of Finance resulted in arm-twisting, supremacy contest and all these undermined the implementation of a balanced budget. The Bayelsa State Ministry of Finance and Budget should also use its internal mechanisms to reduce extra-budgetary expenses. In addition, the Ministry should intensify efforts at Monitoring and Supervision of the budget and reduce the recurrent component of the budget . In the last analysis, the administration should renew its article of faith to complete the projects budgeted for in the 2010 fiscal year. This could better be achieved through periodic monitoring and evaluation to reinforce all existing mechanisms of transparency to ensure budgetary discipline in Bayelsa State. 

Idumange John (Mnim, CBA), Is a University Lecturer and Activist