Tuesday, 30 January 2018

“2018 Akwa Ibom State Budget Proposal is over-ambitious” - Civil Society Group

The proposed “2018 Budget of Consolidation on Industrialization” for Akwa Ibom State which stands at N651.5billion has been described as “the most bloated budget in the history of the state”. 

In a statement released today by a leading Civil Society Organization, Policy Alert, and signed by its Acting Executive Director, Tijah Bolton Akpan, the group asked the Akwa Ibom State House of Assembly to “cut down on the budget size because the performance of the capital budget in the past few years has been unimpressive”.

The statement noted: “Among the important indices that should inform growth in budget size are improved year on year capital budget performance, population growth and the general growth of the economy. It is clear from any cursory examination that Akwa Ibom State’s capital budget performance has been unimpressive in recent years at between 30 to 40 percent. 
Coming out of recession we cannot also say that the state’s economy has fared any better. Analyzing it using the state’s population growth rate, this proposal almost triples Lagos State’s N1.04 trillion proposal on a per capita basis, even without factoring in the fact that Lagos State by far outpaces Akwa Ibom in revenue generation and economic growth. To say the least, this budget is over-ambitious and needs significant haircuts.

“Akwa Ibom State’s internally generated revenue (IGR) as a percentage of the overall receipts has been diving South for the past three years. Going by available data as of September of 2017, the state’s actual IGR takings by the end of 2017 will be 53 percent shy of projected levels. Yet looking at this appropriation bill, government has more than doubled its IGR projections for 2018 without commensurate strategies for strengthening revenue generation. This is worrisome because even though the budget is an estimate, it is also a law that has implications on the rights and livelihoods of citizens, and it is irresponsible to make laws that we have no intention of respecting.”

The statement also called for significant increases in the allocations to science and technology, health, education and agriculture, noting that the proposed budget appears to seriously de-prioritize these sectors in favour of road infrastructure. Education and Health received just 2.4 percent and 1.8 percent respectively of the total proposed capital budget compared to 48 percent allocated to roads, works and transport.

Bolton-Akpan stated: “While physical infrastructure is important being the hardware of development, we must seriously rethink our investment in the software of development which is human capacity. We must also think in terms of diversifying the economy away from its current dependence on federal oil receipts. Also, there is a risk of making physical infrastructure a budgetary conduit for abusing the procurement process, which is why we have been calling for the enactment of a procurement law and the application of open procurement data standards in the construction sector. For example, how do we explain a sudden jump of 257 percent in approved road construction costs in 2017, leading to an augmentation to the tune of N54billion naira in the 2017 supplementary budget?”

Earlier at a public hearing on the budget at the Akwa Ibom State House of Assembly, Tuesday, Policy Alert had lauded the state government for its early presentation of the appropriation bill this year and called on the House to give the budget bill an expeditious hearing as late passage of the budget in the past had negative implications on annual budget performance. The group called on the state government to make public the quarterly Budget Implementation reports (BIRs), the state’s year-end financial results and the Auditor General’s report for each year. 

It also urged the state government to sign on to the subnational initiative of Nigeria’s Open Government Partnership (OGP), a multi-stakeholder peer review initiative which it noted “will place the state in an elite club of open government reformers, with huge potential for attracting millions of dollars in alternative development funding to the state from international institutions.”

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