Executive Order on Budget Management in Nigeria

Budget Management

The Problem Statement

It is not uncommon to notice budget mismanagement in several government agencies and ministries.

Budget is the most pivotal apparatus for economic management because it is an annual, financial and economic plan for resource mobilization and allocation, and the vehicle for achieving government’s public policy goals.

Irregularities in the budget calendar, wrong analysis of figures, delay in the schedule of revenue and expenditure estimates, weak framework, deficiency in information-sharing and lack of transparency and accountability has been exhibited in several government ministries, departments and agencies (MDAs).

These issues have reinforced budget mismanagement and wrong allocation of resources in the MDAs.

The birth of an Executive Order started on the 19th of May, 2017.  The Vice-President of Nigeria, Prof Yemi Osinbajo, SAN, who stood in for President Muhamadu Buhari signed three executive orders that remarkably transformed some of the modus operandi government business and operations.

The Vice-President of Nigeria, Prof Yemi Osinbajo, SAN.
The Vice-President of Nigeria, Prof Yemi Osinbajo, SAN.

One of such directives was the Budget Management process, also known as (EXECUTIVE ORDER NO. 002 OF 2017) which is the expedient submission of annual budgetary estimates by all statutory and non-statutory agencies, including companies owned by the Federal Government.

The Policy Solution

These are the provisions of the executive order below:

1. All Agencies, whether or not listed in the Fiscal Responsibility Act, shall, on or before the end May every year, cause to be prepared and submitted to the Minister of Finance and the Minister of Budget and National Planning their schedule of revenue and expenditure estimates for the next three financial years.

2. All Agencies shall, on or before the end of July every year, cause to be prepared and submitted to the Minister of Finance and the Minister of Budget and National Planning their annual budget estimates, which shall be derived from the estimates of revenue and expenditure as projected in their three-year schedule.

3. A joint committee of the Ministries of Finance, and the Budget and National Planning shall review such estimates and ensure their conformity with the national plan and the financial and budgetary regulations before processing them for approval and early transmission to the National Assembly.

4. Supervising Ministers and Heads of Agencies as well as the Chief Executive Officers of Government-owned companies shall verify that the process of preparation, harmonization and collation of budget estimates are as stipulated in relevant laws and guidelines as well as ensure strict compliance with this Executive Order.

5. Except with the express consent of the President, no payment shall be made in respect of any capital or recurrent liability of an Agency, other than payment of due salaries and allowances, unless the Agency has an approved budget and the payment is in conformity with the approval.

6. Heads of Agencies and Chief Executive Officers of Government-owned companies shall take personal responsibility and be subject to appropriate sanctions for any failure to comply with this Order.

7. Any revenue or other funds of an Agency in excess of the amounts budgeted and duly expended shall accrue to the consolidated revenue fund of the Federal Government.

8. This Executive Order shall take effect immediately.

From the above, the following can be deduced from the order:

  1. Answerability: Officials of Government agencies and corporations will have the responsibility to account for the figures and failure to carry out their duties
  2. Prompt Timing: There will be quick planning and earnest desire to see that government bureau succeed.
  3. Infrastructural Development: Enhancement of fundamental services will boost economic growth and increase the confidence of government.
  4. Information Control: All financial computations and details will be displayed and published.
  5. Ethicality: Transaction and approval of projects will go through proper due process.
    That also means that there will be thorough surveillance of the activities of federal government agencies.

NIGAC Constructive Take/Position

Enforcement is a major issue for most Nigerians. These proclamations are entirely laudable but the implementation and outcome of this Order is the key in achieving the goals of Budget Management.

Furthermore, the forecasting, transparency and equal allocation of resources through this order have to be guided with the right officials.

In conclusion, the Executive arm of government has to be plain and factual in displaying its duties as the head of the country.


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