Fiscal Transparency - Nigeria Continues to Slide in Open Budget Index
Overview
The International Budget Partnership (IBP), on January 23, 2013, released the results of the Open Budget Index (OBI) for 2012 in which about 100 countries were surveyed. The OBI measures the state of budget transparency, participation, and oversight in the budget process. In the outcome of the survey, Nigeria’s overall score was only 16 out of a maximum 100, a lower score when compared with the previous years. Specifically, and as shown in Figure 1, Nigeria’s score has been consistently on the decline from 20 in 2006 to 19 in 2008 and then to 18 in 2010 while dropping further to 16 in 2012. This implies that there are still challenges with respect to fiscal transparency and consolidation in Nigeria despite the passage of the Fiscal Responsibility Act (FRA). Therefore, the inability of Nigeria to improve its performance in the OBI means that the government is seen to be providing the public with little information on the budget.Figure 1: Nigeria’s Open Budget Index Scores 2006 – 2012
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Description of Document |
Status |
Pre-Budget Statement: Provides information that links government policies and budgets and typically sets forth the broad parameters that will define the budget proposal that is presented to the legislature. |
Published |
Executive’s Budget Proposal: Presents the government plans to raise revenues through taxes and other sources and spend these monies to support its priorities, thus transforming policy goals into action. |
Published |
Enacted Budget: The legal instrument authorizing the executive to raise revenues, make expenditures, and incur debt. |
Published |
Citizens Budget: A nontechnical presentation to enable broad public understanding of a government’s plans for raising revenues and spending public funds in order to achieve policy goals. |
Not Produced |
In-Year Reports: Periodic (monthly or quarterly) measures of the trends in actual revenues, expenditures, and debt, which allow for comparisons with the budget figures and adjustments. |
Published |
Mid-Year Review: An overview of the budget’s effects at the midpoint of a budget year and discusses any changes in economic assumptions that affect approved budget policies. |
Produced for internal use |
Year-End Report: Information comparing the actual budget execution relative to the Enacted Budget |
Published |
Audit Report: Independent evaluation of the government’s accounts by the country’s supreme audit institution. It typically assesses whether the executive has raised revenues and spent monies in line with the authorized budget, and whether the government’s accounts of its revenues and expenses are accurate and provide a reliable picture of the fiscal situation. |
Produced for internal use |
Figure 2: Nigeria’s OBI Vs Selected Countries
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Policy Implications and limitations of the Index
The OBI has thrown light on the need for the Nigerian government to do more in terms of improving the transparency of the budget process. In other words, the continuous decline in Nigeria’s score since 2006 shows that there are still ambiguities in the process even though progress is being recorded in some areas. The oversight activities of the legislature are a case in point. However, the OBI survey has some limitations. First, it is observed from the report that the Nigerian government does not produce or publish a ‘nontechnical’ report called the ‘Citizens Budget’. Second, the report also notes that the mid-year budget review is only produced for internal use (see highlighted sections in Table 1). Conversely however, the Budget Office of the Federation has a publication on its website called ‘A Citizens Guide to the Federal Budget’Download File" name="_ftnref1">[2] while it also produces for public consumption detailed quarterly reviews of the budget.Download File" name="_ftnref1">[3] For these reasons, better scores in these two areas should increase Nigeria’s overall score though not significant in relative terms. In conclusion, apart from the website/internet channel, the Nigerian fiscal authorities may want to devise other means by which budget documents are made public (for example through town hall meetings) given that the number of internet users in the country is estimated at only 46.2million or 28.8% of the total population.
Download File" name="_ftn1">[1] The BRICS according to Goldman Sachs