“Don’t tell me what you value, show me your budget, and I’ll tell you what you value”. -Joe Biden
From the 2016 Budget of Sacrifice, Restoration and Change to the 2020 Budget of Progressive Renewal, Nasir El- Rufai, Governor of Kaduna state, has been unambiguously consistent as to their critical developmental objectives. These, as captured in the Kaduna State Development Plan (SDP) 2016-2020, include orderly, planned and coherent development of Kaduna state. And the vehicle for the achievement of these ambitious goals – enhanced service delivery to the good people of the state and infrastructural development -has been the annual budget. Without doubt, the goals and objectives of the SDP would have amounted to nothing without a realistic and clearly communicated budget that is also timely prepared and implemented.
The bane of budgets of most states, especially at the federal level which have made the realidation of the “lofty” objectives of good roads, modern healthcare facilities, good schools, reduction in the unacceptable high level of unemployment and the poor standard of living unrealidable year in, year out , is the late preparation and lackadaisical implementation of budgets, which is the actual expenditure or application of public funds in carrying out the activities of government as captured in the budget. While budget preparation in Nigeria is an elaborate process – budget implementation is treated with utter contempt and it’s always scandalously in favour of recurrent expenditure,because the public service has no shame taking care of itself, to the detriment of the larger population. The audited accounts of the federal government, the 36 states, and the Federal Capital Territory bear testimony to the fact that the budgets of most states are self serving.
The situation has unfortunately remained unchallenged, clearly due to the absence of political will by the political leadership. On assumption of office, El-Rufai, like most other governors, met a budget that was consistently skewed in favour of recurrent expenditure – 30%:70% recurrent to capital ratio, but unlike them he took the bull by the horn and tackled the issue headlong, because that’s the only way he would deliver to the people,who are dear to him. So while states like Bayelsa and Delta in 2019 for instance, had a staggering recurrent expenditure of N200 billion and N137 billion respectively, Kaduna state which is more populated than both states,since 2016 has had a much lower recurrent expenditure.
In 2016, Kaduna state had a recurrent expenditure of N62 billion and a whopping N171.7 billion capital expenditure a 36%: 64% recurrent to capital ratio. Encouraging is that progressively the state has continued on the path of implementing budgets that focuses on socio-economic development of its people. In 2017 the N214billion had a N131.45 billion capital expenditure as against N83.46 billion recurrent expenditure, a 61:39% capital to recurrent expenditure ratio. And in 2020 it intends to spend N190 billion on capital and N67.87 billion on recurrent expenditure, an unprecedented capital to recurrent ratio of 73.7% :26.3%. Thus El-Rufai has consistently over the past five years ensured that the people are at the center of his budget implementation with the increase in allocation and implementation.
The pertinent question is what did El-Rufai do to achieve the feat,that the others haven’t done? First, is his commitment to help the citizens of his state achieve their full potentials and much more critical is the political will to embark on the reforms of the public service and the budgeting process,that freed the resources for capital development . Kaduna state is one of the few states that has implemented IPSAS in the preparation and implementation of its budget and that has fully subscribed to the Open Government Partnership (OGP), which demands transparency and accountability in the entire budgeting process. Also key is the realization by the El-Rufai administration that governments are not risk free and that failure of fiscal management will have serious impact on the economy of the state , especially as it relates to efficient service delivery,which is another thing the other states haven’t focused on.
The BusinessDay Governance and Competitiveness Award for ease of doing business, and the Institute of Chartered Accountants(ICAN) Award that were freely conferred on the state are in recognition of the tremendous reforms that the governor and his team,most especially the Budget & Planning Commission and the Finance Ministry have put in and are continuing to put in to ensure that the budget works for the vast majority of the people rather than the public servants. The various awards which are definitely not whimsical,has rather than decrease, increased the appetite of the Team El-Rufai to further deepen the reforms.
Though Kaduna state is currently ahead of oil states like Delta and Akwa Ibom in Internal Revenue Generation (IGR) from figures released by the National Bureau of Statistics (NBS),it has nevertheless maintained a lean administrative structure in a bid to control expenditure, while poorer states without the financial power of Kaduna state are ballooning theirs to accommodate all manners of interests. El-Rufai has also introduced measures to ensure the integrity of the public service payroll by instituting a continuous biometric verification system designed to weed out “ghost workers” and workers with altered biographic records. Because he interrogates the system, he is aware of the actual half-year spending in 2019, which has further convinced him that overheads can be further limited in 2020 and the money diverted to capital expenditure.
Kaduna state government has confirmed that budgets can work and that it is a tool for change,if the needful are done. Because Kaduna state considers budget implementation critical, it ensured that issues revolving around it,that would help it achieve performance are frontally addressed. For the fifth straight year, the new financial year for the Kaduna state government will begin on the first day of January, which has placed the state in a unique position in achieving full alignment of the calendar and fiscal years over fifth consecutive budget cycles,a feat the federal government is struggling to achieve.In 2020 it has fixed its sights on aligning the budget of the 23 local government councils to that of the state, which will greatly benefit the two tiers in terms of planning.
So what Kaduna state has going for it, is a reformed public financial management system,adoption of the zero-based budget, a transparent and disciplined budget implementation that is predicated on realizable revenues,unlike Cross River State
which in 2019 had a budget estimate of N1.04 trillion,but ended up spending less than N93 billion. So while Kaduna state with strategic budget objectives that emphasizes fiscal realism, achieves its key objectives of funding to conclusion priority ongoing projects and reduction in backlog of inherited liabilities; maintaining a favourable proportion of capital to recurrent expenditure; and expanding the revenue generation capacity of the state, states like Cross River would continue to drift.
Postscript: The other states should, like El-Rufai, declare: “We should cover recurrent expenses from our own internal revenues. This would leave us better placed to devote to urgent capital investments resources we attract from other sources.”
Ado writes from Kaduna.
