The “envelope system” and budget performance, by Olusegun Adeniyi

Posted by News Express | 28 November 2013 | 3,688 times

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It was just about three weeks after I assumed office as Spokesman to the late President Umaru Musa Yar’Adua in 2007 when I received a memo from the office of the Permanent Secretary, State House, seeking the input of my department for the 2008 budget that was under preparation. Because both the Deputy Director and the Assistant Director for Information in my office were people I knew way back from my days as a State House Correspondent, I always deferred to their experience and wise counsel. For that reason, it was easy for me to learn very fast about how government works. The explanation for the memo was that I had the power to initiate project(s) that would be accommodated in the national budget.

At that period, I really had no idea on what my budgetary input should be and it took two other reminders for me to come up with one. Having been in Katsina with the president about three times by then, the idea I had was to build a presidential media centre in the state capital that would also include broadcasting facilities so that in the event that we were there and the president needed to address the nation, we would not have to rush back to Abuja. I left the details concerning the project and subsequent follow up with the State House budget office to my staff and I forgot about it. But several months later in May 2008, I received a visitor in my office who turned out to be a contractor. His mission was simple: he came to see how he could handle the building of the presidential media centre in Katsina that was already in the 2008 Appropriation Act under my department!

My discussion with the contractor was as interesting as it was sad for it revealed a lot, not only about the (mis)management of public expenditure, but also about what we call budget in our country. However, by then, it had dawned on me that for some inexplicable reasons, the late president preferred returning back to Abuja same day whenever we went to Katsina. Only on rare occasions did we spend more than a day. Besides, I was dealing with a principal who actually hated making any broadcast because, as he would say rather cynically, “this is not America”. So I had decided not to build what would amount to a wasteful monument in Katsina even though there was monetary provision for it in the budget.

Perhaps because of that experience, I paid more attention to the “envelope system” on which our annual national budget revolves and I learned several lessons about the culture of waste that we have institutionalized. That is the kernel of my coming book (though the budget is just one of several issues highlighted) which should be ready hopefully by mid next year. That experience also made me to realize that all this talk about percentages of budget performance (or implementation) is utterly meaningless. For instance, that I didn’t undertake to build a media centre in Katsina quite naturally necessitated returning the money to the treasury by December 2008 but that could only have reflected negatively on “budget performance” that is predicated essentially on the amount of money spent from the entire sum appropriated for the fiscal year.

But what is even more interesting is that with the way our budget works, I could easily have proposed hosting “the first annual conference of African presidential spokesmen” (you find many of such conferences in the budget) so I could spend hundreds of millions of Naira buying vehicles. Or I could have located the presidential media centre in my village in Kwara State and say it would be for the training of journalists who cover State House! In Nigeria, you can rationalise anything and that explains how public officials locate projects in their villages even when such decisions make no real sense.

I have recounted the foregoing because we are back to the season of budget and its acrimonious politics. Of course, the current debate is about the oil benchmark. The National Assembly will want a higher figure than the one proposed by the executive and with no agreement on the issue, we are three days away from December yet there is no certainty about when the president will lay the 2014 appropriation bill before the lawmakers. That means in effect that we are going to have another delayed budget next year with all the attendant implications.

Interestingly, in the coming days, we are going to hear stories about differing percentages of implementation for the 2013 budget depending on who is making the claim. Yet pertinent questions will remain as to what exactly we mean by “budget implementation”. If, for instance, a government agency is given N15 billion to buy a property for office accommodation and the money was indeed duly spent as appropriated, how does such a “hundred percent budget implementation” impact on the welfare of the people?

I have said it before and I will say it again, the current regime of “envelope system” which essentially means that we simply determine spending categories, i.e. Presidency, Education, Agriculture etc., rather than spending priorities, cannot serve our nation. Putting an amount of money into each “envelope” (for every ministry and agency) and throwing it at them to do as they please, not only promotes waste but also undermines rigour and strategic thinking.

Notwithstanding my misgivings, I must still commend the Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala, for the discipline she has tried to instill in the system by sheer force of personality and for her uncommon commitment and work ethic. I say that as someone familiar with her office and the tremendous efforts she puts in almost on a daily basis to reposition our economy, against all odds. But the challenge goes beyond her because with a constitution that prescribes that a minister must come from each of the 36 states, resource allocation has already been made to resemble a distribution of spoils rather than a collective plan for an integrated whole. But we cannot continue like this and expect to develop as a nation.

•This piece by Adeniyi (shown in photo) originally appeared in his column “The Verdict” in today’s edition of ThisDay under the heading “The Illusion of Budget Performance”. Adeniyi can be reached via

Source: News Express

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