- Jigawa, Ondo, others rank top in fiscal transparency, effective public finance management
- Abia, Taraba, Benue poorest-performing states
JIGAWA, Ondo, Kano, Adamawa, Osun, Gombe, Kwara, Oyo and Kogi States have emerged the top nine states with the highest fiscal transparency and facilitated accountability in public resource management.
The states were ranked the top nine states in the States Fiscal Transparency League (SFTL), an initiative by BudgIT aimed to sustain the gains of the recently concluded World Bank’s State Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme.
BudgIT is a leading civic organisation that uses creative technology to simplify public information, stimulating a community of active citizens and enabling their right to demand accountability, institutional reforms, and efficient service delivery to facilitate societal change. It makes use of data to improve governance by bridging the information gap between the government and citizens
According to BudgIT, the top nine states’ Medium-Term Expenditure Framework (MTEF) documents, as well as its citizens’ budget, were adjudged comprehensively and timely. The respective state’s website and e-procurement portal had all the required information and were easily navigated.
BudgIT in its report of the league averred that it is important for all state governments to have functional and up-to-date websites, as this is imperative to enable the extraction of the required information to aid the process.
To ascertain the states’ standing, BudgIT deployed some background indicators which include: Medium-Term Expenditure Framework (MTEF), Proposed Budget, Approved Budget, Citizens’ Budget, Budget Implementation Reports (BIR); Audited Report, Accountant General’s Report/Financial Statement, e-Procurement Portal or Contract Award Information, States Website with Fiscal Repository.
Also, it made use of some scoring methodology like timeliness, availability, and comprehensiveness to ascertain the performance on each of the background indicators with a number of criteria and accompanying grade points respectively. The grade points attached to each background indicator was put at 20, while the total score was 100.
Jigawa led the states with 90 points. It was followed by Ondo (78), Kano (77), Adamawa (76), Osun (76), Gombe (74), Kwara (73), Oyo (72) and Kogi (71); while Abia, Taraba, and Benue are the three states with woeful performances, scoring 39, 38 and 28 respectively.
BudgIT in its report observed that though the approved budget met all the criteria for comprehensiveness, it was not published on time. The proposed budget document was also different from the standard methodology that was set for appraisal, and hence, did not meet the set criteria. The citizens’ budget was timely but not fully comprehensive.
State-by-state performance standing
According to the performance index, Benue State in the period under review was the poorest performing state with 28 points and occupied the 36th position on the SFTL table. It had a comprehensive but not timely approved Budget. Its quarterly BIR was available, though not timely and neither comprehensive.
The e-procurement portal was not fully comprehensive, but accessible. There was no available information on its MTEF, proposed budget, citizens’ budget; neither did it have a functional website.
Taraba State, occupying 35th position on the table, was ranked the second lowest state with 38 points. It had a comprehensive but not timely approved budget. The state website was down during the period under review; it had no published MTEF, proposed budget and citizens’ budget. Although the state had a functional e-procurement portal, the BIR was available but not comprehensive.
Notwithstanding its 39 points and being the third lowest performing state, Abia, occupying the 34th position on the table had a satisfactory e-Procurement portal with no published information on its MTEF; citizen’s budget or proposed budget was available online.
Although the previous quarter’s BIR was available on time, it was not fully comprehensive. The state’s website was down when it was checked. The approved budget was published three months late and did not meet the set minimum requirements.
Jigawa ranked the highest-performing state in the period under review. Its MTEF (annual three-year-expenditure planning) document was comprehensive and timely, as well as its citizens’ budget. Its website and e-procurement portal had all the required information and were easily navigated.
Although the approved budget met all the criteria for comprehensiveness, it was not published on time. The proposed budget document was also different from the standard methodology that was set for appraisal, and hence, did not meet the set criteria. The citizens’ budget was timely but not fully comprehensive.
As the second highest performing state with 78 points, Ondo State had a fully comprehensive and timely published MTEF document. Its approved budget was comprehensive but not timely, but the reverse was the case for its citizens’ budget and BIR, which were timely, but not comprehensive. The state’s e-procurement portal was navigable, comprehensive and accessible, as well as the website. It, however, had no information on its proposed budget.
Kano State was one of the progressive states during the period in review. It occupied the third position in the league with 77 points. Its MTEF and e-procurement portal passed the set criteria on comprehensiveness, availability and timeliness.
It also passed the set criteria for the approved budget, except for timeliness. Its state website with a fiscal data repository is almost comprehensive. However, it failed to provide access to its proposed budget. The BIR for the reviewed quarter was almost comprehensive and timely.
Despite the insurgency and security challenges in the North East region, Adamawa, one of the states in the region, occupied the fourth position with 76 points. The state published its comprehensive MTEF document within a reasonable timeframe.
Its approved budget was made available online a month after the required date, but still within considerable time. The e-procurement portal met most of the minimum criteria and the States’ Functional Website/Fiscal Repository was mostly well accessible.
Its citizens’ budget was available and comprehensive, although not published in a timely manner. The BIR was published within a considerable time, but not fully comprehensive. However, the state fell short of having the proposed budget online during the review period.
Lagos as Nigeria’s economic hub ranked 19th on the league table with 59 points scored. Although the state had the best and most comprehensive e-procurement portal in the period under review; its website was not fully comprehensive, nor was its approved budget.
The state had no published record on its MTEF and proposed budget. The citizens’ budget and BIR were not published in good time, nor were they fully comprehensive.
As the gateway state to the nation’s industrial hub, Ogun State in the period under review had a good e-procurement portal. However, its MTEF document, citizens’ budget, BIR and the approved budget were not fully comprehensive. It had no published information on its proposed budget. Although its website is currently functional, it does not contain all required information.
In the oil-rich Niger Delta region, Bayelsa State led with 68 points and occupied the 10th position on the SFTL even though there was no information on its MTEF and proposed budget online.
Although its approved budget was published online a few months after the required time, it met the required criteria of components.
Its citizens’ budget was also available and comprehensive, just as its e-procurement portal and website were accessible and navigable, but not completely comprehensive. The quarterly BIR was not very comprehensive but timely.
Cross River followed with 61 points and occupied 16th position on the league table. Although it barely met the set criteria on the proposed budget, it was one of the few states that have theirs available online in the period under review.
It has a detailed approved budget but was not published on time, same as its citizens’ budget. Its e-procurement portal is accessible and comprehensive. The quarterly BIR was available on time, but not fully comprehensive. The state currently has no functional website.
Delta State was third in the region and sits in the 18th position with 60 points. Its approved budget was comprehensive but was not published on time. Also, its e-procurement portal is fully comprehensive, accessible and navigable.
It has a functional but not up-to-date website. Its citizens’ budget was available online but not on time, which is fairly comprehensive. As of the time of review, there was no published MTEF, or proposed budget, while the available quarterly BIR was incomprehensive.
Edo State followed with 55 points and occupied the 23rd position on the SFTL table. Its approved budget was comprehensive but was not published on time. The e-procurement portal is comprehensive, accessible and navigable.
It has a functional website, but as of the time of review, there is no published MTEF, proposed budget and citizens’ budget available. The quarterly BIR was timely published but not fully comprehensive.
Akwa Ibom State was one of the average rating states with 54 points and occupied the 24th position. Its MTEF document, although not published on time, met some of the set criteria. As at the time of review, the state did not have its proposed budget available online.
The approved budget was available and detailed, but not timely published. The citizens’ budget on the other hand was not very comprehensive, but considerably timely. The quarterly BIR was not fully comprehensive and timely, but available. The e-Procurement portal barely met the set criteria and the state’s website was down as at the time of this rating.
Notwithstanding the noise by the immediate past administration of the oil rich Rivers State, particularly on projects, the state narrowly escaped the red zone on the SFTL table as it occupied 32nd position with 43 points.
The state had no published information on its MTEF, proposed budget and citizens’ budget during the period under review. Its website was down at the time of review and report compilation. However, the state provided a comprehensive (but not timely) approved budget, just as the BIR was not fully comprehensive. The e-procurement portal was navigable and accessible.
Anambra State as the gateway to the South East and economic hub of the region occupied the 22nd position on the table with 55 points. The state neither had its proposed budget, citizens’ budget nor MTEF document published in the period under review.
However, the state has a detailed approved budget, quarterly BIR (but not timely), comprehensive e-procurement portal and a functional website with a fiscal data repository.
Notwithstanding the political crisis and insecurity in Imo State, it shored up its character with its 66 points score and 11th position standing on the SFTL table. The State approved budget is fully comprehensive and was published on time. Its e-procurement portal is comprehensive, accessible and navigable. It has a functional but not up-to-date website.
As of the time of review, there was no published information on the state’s MTEF and proposed budget. The citizens’ budget and BIR were published in good time, but not fully comprehensive.
SFTAS, MTEF and 2022 budget
To support the federal government in its objective to encourage a common set of fiscal behaviour aimed at fiscal transparency, accountability, and sustainability among the states of the federation, the World Bank developed a four-year (2018 – 2022) programme for Performance for Results (PforR) facility worth $750 million called States Fiscal Transparency, Accountability and Sustainability (SFTAS).
The programme combines selected actions from the Fiscal Sustainability Plan (FSP) and the Open Government Partnership (OGP) agenda to form its disbursement linked results which States are to meet before they can access funds.
The Federal Ministry of Finance Budget and National Planning (FMFBNP) decided to ‘on grant’ the PforR financing to states. This significantly increased the incentives that the programme provides to the states. Prior to this, the financial assistance packages from the federal government to the states were loans.
The $750 million financing of the programme was spread to cover $700 million in annual performance grants and $50 million in technical assistance support to states. For the annual performance grants component, states are assessed on the level of their achievement of the Eligibility Criteria and set of Disbursement Linked Results (DLRs) by the Independent Verification Agent (IVA) – the Office of the Auditor General of the Federation (OAuGF) – for each of the four years.
The amount accessible by states each year under the PforR is dependent on the states’ ability to meet the annual eligibility criteria and nine Disbursement Linked Indicators (DLIs) across four Key Result Areas (KRA) namely: Increase fiscal transparency and accountability; Strengthen domestic revenue mobilization; Increase efficiency in public expenditure, and Strengthen debt management.
The World Bank Board on December 14, 2020, approved an additional financing of $750 million to the SFTAS PforR to assist states to cope with the fiscal constraints to adequately contain the COVID-19 Pandemic. This was premised on the addition of 10 new DLIs with some being incorporated as sub-DLIs bringing the total number of DLIs to 13.
The Technical Assistance (TA) component for SFTAS (also referred to as the TA Component) uses the Investment Project Financing (IPF) instrument, which is managed in accordance with the Bank’s policy and directive for Investment Project Financing (IPF).
The TA component is being delivered by implementing agencies – Public Service Institute of Nigeria (PSIN), Debt Management Office (DMO), Open Government Partnership (OGP) and an Implementing Partner which is the Nigeria Governors’ Forum.
The Medium-Term Expenditure Framework (MTEF) is a structured approach to integrating fiscal policy and budgeting over a multi-year horizon (three-year-expenditure planning).
It sets out the medium-term expenditure priorities and hard budget constraints against which sector plans can be developed and refined.
Its components include a top-down estimate of aggregate resources available for public spending; bottom-up coasted sector programmes; reconciliation of needs with resource constraints for sectoral resource allocation, and ensuring that budget execution reflects agreed plans.
As a budget and planning tool, it has helped the government to manage the tension between competing policy priorities and budget realities, and by extension, influenced budget effectiveness by overcoming short-sighted planning, irresponsible resource allocation, coordinating the linkage between policy, planning and budgeting which has led to improved service delivery in the public sector.
The Federal Government in its Second Quarter and Half Year 2022 Budget Implementation Report (BIR) with the theme ‘Budget of Economic Growth and Sustainability’ took into consideration the policies/strategies contained in the 2022–2024 Medium Term Expenditure Framework and Fiscal Sustainability Plan (MTEF/FSP).
The then Minister of Finance, Budget and National Planning, Dr Zainab Shamsuna Ahmed stated that allocations to Ministries, Departments and Agencies (MDAs) were guided by the core objectives of the National Development Plan (NDP) 2021 – 2025.
According to the Director-General, Budget Office of the Federation, Ben Akabueze, the implementation of the 2022 Budget has been very challenging. “The economy was adversely affected by the global economic effects of the Russia – Ukraine war and the lingering effects of the Coronavirus Disease (COVID-19). These together with supply chain disruptions and high energy and food costs resulted in a decline in most economic activities and crude oil demand volatility in the world market.
Consequently, aggregate revenue for the second quarter and half year 2022 fell significantly to prorate budget estimates, further worsening the fiscal position of the federal government,” he said.
2022 Budget Performance Summary
According to the executive summary of the half-year Budget Implantation Report (BIR) published by the Federal of Finance, Budget and National Planning with inputs from the Budget Office of the Federation (BOF), Nigeria’s real Gross Domestic Product (GDP) grew by 3.54 percent (year-on-year) in the second quarter of 2022, marking seventh consecutive quarters of growth. This follows the negative growth rates recorded in the second and third quarters of 2020.
“The second quarter 2022 growth rate was 0.43 percentage points higher than the 3.11 percent reported in the first quarter of 2022. It was, however, 1.47 percentage points lower than the 5.01 percent recorded in the second quarter of 2021. This is an indication of improvement in economic activities after the different phases of COVID-19 restrictions.
“Headline inflation, though still very high, moderated from 18.17 percent in March to 18.12 percent, 17.93 percent and 17.75 percent in April, May and June 2022 respectively. The slight decrease in headline inflation rate was largely driven by the moderation in food inflation. Food inflation decreased from 22.95 percent in March to 22.72 percent, 22.28 percent and 21.83 percent in April, May and June 2022 respectively.
“The moderation in food inflation was due to the good harvest in the period. On the other hand, core inflation rose slightly from 12.67 percent in March to 12.74 percent, 13.15 percent and 13.09 percent in April, May and June 2022 respectively.
“Monetary aggregates increased in the review period relative to the first quarter of 2022. Broad Money Supply (M2) increased by ₦3,133.96 billion (6.86 percent) from ₦45,663.91 billion in March to ₦48,797.87 billion in June 2022.
“The growth in M2 was mainly driven by the expansions in the Net Domestic Assets (NDA) by 8.64 percent (₦3,293.18 billion) from ₦38,101.01 billion in March to ₦41,394.19 billion in June 2022. The development in NDA was due to the expansions in Net Domestic Credit (NDC) during the period.
“Net Domestic Credit increased by 8.49 percent (₦4,480.12 billion) from ₦52,787.06 billion in March to ₦57,267.18 billion in June 2022. Similarly, the expansion in Net Domestic Credit (NDC) was due to the increases in both Net Credit to Government and Credit to Private Sector during the period under review,” the summary read.
It added, “Nigeria’s foreign trade, driven by significant improvement in imports, fell in the second quarter of 2022. Total trade fell marginally by ₦0.16 trillion or 1.23 percent to ₦12.84 trillion in the second quarter of 2022, from ₦13.00 trillion in the first quarter of 2022. This represents a significant trade decline compared with the rebound of 11.05 percent growth recorded in the first quarter of 2022.
“The development in total trade was driven by significant contraction in imports even as exports continued to revamp in the review period. Imports fell by ₦0.47 trillion or 7.89 percent from ₦5.90 trillion in the first quarter of 2022, to ₦5.44 trillion in the review period. Exports however rose by ₦0.31 trillion or 4.31 percent to ₦7.41 trillion in the second quarter of 2022, from ₦7.10 trillion recorded in the first quarter of 2022.
“The Investors and Exporters segment of the foreign exchange market appreciated slightly from ₦415.72/US$ in March 2022 to ₦415.53/US$ in April before depreciating further to ₦415.95/US$ and ₦415.61/US$ in May and June 2022 respectively.”
The executive summary further noted that there was no data for the Official/Inter-Bank segment and Bureau-de-Change (BDC) segments of the foreign exchange market following the suspension of the operations of the Bureau-de-Change segment by the Central Bank of Nigeria.
“There was a marginal decrease in the level of Nigeria’s official gross (external) reserves to $39.22 billion as at the end of June 2022 as against $39.28 billion recorded at end of March 2022.
“The total public debt stock as at 30th June, 2022 stood at ₦42,845.88 billion (US$103,312.80 million). This represents an increase of ₦1,241.82 billion (2.98 percent) when compared to the ₦41,604.06 billion reported at the end of March 2022.
“The breakdown consisted of $63,248.02 million (₦26,230.22 billion) or 61.22 percent for domestic debt while the balance of $40,064.78 million (₦16,615.66 billion) or 38.78 percent was for external debt stock.”
According to the report, the total public Debt/GDP remained sustainable at a ratio of 23.24 percent as at the end of June 2022. This was below the country specific threshold of 25 percent and also significantly below the international budget implementation in the second quarter of the period under review.
“The price of crude oil at the international market averaged $113.78 per barrel, indicating an increase of $16.66 per barrel (17.15 percent) and $44.95 per barrel (65.31 percent) above $97.12 per barrel and $68.83 per barrel reported in the first quarter of 2022 and second quarter of 2021 respectively.
“It also represents an increase of $40.78 per barrel (55.86 percent) above the $73.0 per barrel oil price benchmark for the 2022 Budget. Average oil production in the second quarter of 2022 however decreased to 1.43 million barrels per day (mbpd) representing a 0.17mbpd (10.63 percent) fall from the 1.60mbpd benchmark for the 2022 Budget.
“The volume of oil production in the period was also 0.06mbpd (4.03 percent) and 0.18mbpd (11.18 percent) below 1.49mbpd and 1.61mbpd reported in the first quarter of 2022 and second quarter of 2021 respectively.
“Gross Oil Revenue of ₦2,172.35 billion collected in the first half of 2022 therefore fell short of the ₦4,684.98 billion prorate budget projection for the period. This denotes a decrease of ₦2,512.63 billion (53.63 percent) against the 2022 half year budget estimate but an increase of ₦272.56 billion (14.35 percent) above the half year actual gross oil revenue recorded in 2021.
“The gross non-oil revenue in the first half of the year amounted to ₦3,236.60 billion; a decrease of ₦93.07 billion (2.80 percent) below the half year’s estimate of ₦3,329.67 billion. This results from the underperformance of some of the non-oil revenue items. The net distributable revenue however stood at ₦3,277.27 billion in the first half of 2022, representing a shortfall of ₦2,091.31 billion (38.95 percent),” the report stated.
It continued, “The sum of ₦2,412.76 billion was received to fund the FGN budget in the first half of 2022. This comprises ₦653.52 billion (27.09 percent) oil revenue, and ₦1,759.24 billion (72.91 per cent) non-oil revenue. Revenue receipts increased from ₦970.10 billion in the first quarter to ₦1,442.66 billion in the second quarter.
“However, total inflow for the first half of the year was ₦1,707.63 billion (41.44 percent) lower than the 2022 half year projection of ₦4,120.39 billion but ₦101.40 billion (4.39 percent) higher than the ₦2,311.36 billion reported during the first half of 2021.
“Total expenditure of the Federal Government stood at ₦7,913.98 billion in the first half of 2022 representing a ₦690.10 billion (9.55 percent) increase above the ₦7,223.88 billion prorate budget projection for the review period. It was however ₦2,106.99 billion (36.28 percent) higher than the actual expenditure of ₦5,806.99 billion recorded in the first half of 2021.
“A total of ₦2,450.47 billion was spent on non-debt recurrent expenditure in the first half of 2022 representing a decrease of ₦561.31 billion (18.64 percent) below the budget estimate of ₦3,011.79 billion for the period. It was however above the non-debt recurrent expenditure of ₦2,234.05 billion spent during the half year of 2021 by ₦216.42 billion (9.69 percent).
“Statutory Transfers amounted to ₦419.98 billion during the review period. Total Debt Service in the first half of 2022 stood at ₦2,597.85 billion, higher than the prorated sum of ₦1,978.04 billion by ₦619.81 billion (31.33 percent). Interest on Ways and Means amounted to ₦714.74 billion. The sum of ₦1,333.41 billion was used for domestic debt servicing, a difference of ₦52.34 billion (4.09 percent) from the prorated half year projection, while ₦549.70 billion was spent on external debt servicing during the period under review.”
The executive summary explained that a total of ₦1,283.84 billion was released for the implementation of capital projects in the 2022 budget during the period. This comprises ₦1,080.99 billion for MDAs’ capital and ₦202.85 billion for Capital Supplementation. This indicates a shortfall of ₦548.41 billion or 29.93 percent from the prorate budget estimate for the half year.
The revenue and expenditure out-turn of the Federal Government resulted in a fiscal deficit of ₦5,499.29 billion (5.97 percent of prorate GDP) in the first half of 2022. This was ₦2,395.80 billion (77.2 percent) above the projected half year deficit of ₦3,103.49 billion.
It was also above the ₦3,484.41 billion deficit that was recorded in the first half of 2021. The deficit was financed through foreign borrowing of ₦510.21 billion and domestic borrowing of ₦2.3 trillion.
Overall, the nation’s economy grew by 3.54 percent in the second quarter of 2022, a sign that the Nigerian economy has continued to recover from the second recession in five years after posting seven consecutive positive quarterly GDP growth.
The positive growth performance in the quarter under review was due to the effect of some measures put in place to curtail the negative impact of the Russia – Ukraine war, the resurgence of the Covid-19 Pandemic in some countries, rising inflation and crude oil theft.
Specifically, the recent rise in global economic activities, the associated rise in international crude oil demand and price, as well as the various stimulus packages being executed by the Federal Government significantly impacted developments during the review period. The positive trend is also expected to continue in subsequent quarters of 2022 and beyond.
Comments are closed.