IDEAS Radio 31 October 2019

BudgIT’s “State of the States” report

Aghogho Oboh: Alright, this is what happens when you have to put on six microphones at the same time.  Welcome back on Public Square. And … the IDEAS segment is about to begin with Ayo Obe. I’m going to run through the list of our resource persons very quickly on Public Square.  Today we have Ojuogo Oji who is the head … 

Ojugo Uche: Ojugo Uche.

AgO: Ojugo, sorry.  Ojugo Oji who’s the Head of Research …

OU: Uche, Uche is the last name.

AgO: Ojugo Uche who is the Head of Research at BudgIT.  Thank you very much. Ojugo Uche has been here before, but she’s also joining the conversation.  Gbolahan Olojede is an economist as well as public affairs analyst, thank you very much, as well as …

Gbolahan Olojede: Good to be here.

AgO: … and Oluwaseun Akinfolarin

Rotimi Sankore: And an economist.

AgO: … Oluwaseun Akinfolarin is the Executive Director of Civic Media Hub.  And the host of IDEAS segment is Ayo Obe.

Ayo Obe: Oh.  Thank you. And so welcome everybody.  I mean … We just have 15 minutes, so I’m going to get straight into it …  BudgIT has produced this report “State of the States” and it’s been very interesting for many issues which will come up, probably, in the discussion in the wider Public Square.  But for me, I’m always, I always seem to be finding myself landing on the square of Accountability, because I noticed from the Report and the accompanying World Bank comments on the … on the “State of the States” report, that the … it was noted that there is very low tax morale in Nigeria, that Nigerians don’t … we … we are not very keen on paying tax.  And it does seem to me that part of that is to do with the fact that there’s not the degree of transparency that we need with regard to spending our money, and on the other hand, we can see the lavish lifestyles, the luxuries that our elected representatives … are voting for themselves, whether it’s pensions, extra cars … the suspicion of padded contracts and so on.  So I thought that I would first of all ask you … you talked about, some States have their budget, the State’s Budget, and then you talked about the Citizen’s Budget. What is a Citizen’s Budget?

OU: So a Citizen’s Budget is a broken down, simplified version of the regular Budget, right?  Which typically, is maybe in a more graphical format, highlighting key areas, key sectors. And why is this necessary?  This is necessary because typically you have a budget which is … if you look for example at the Nigerian national Budget, this year’s proposal, about 1,900 words, that is not something easily accessible to citizens, that is not something that people would … look through …

AO: They would understand whether or not the money is in fact being spent, whether they want that money spent, and so on.

OU: Precisely.  Now it’s not as if it can’t be analysed by regular citizens, but in terms of the time, the commitment.  So, a Citizen’s Budget basically, both at the national and the sub-national level, is something basically takes the information, breaks it down, right?  In sectoral view, in high graphical format so that people can access it. And I think also, if we look at … there are some countries, I know for example Ghana, which goes a step forward, a step further and even makes it accessible in different languages, right?  And why is this important? Because you know we are an extremely very multilingual … multicultural country. Yes, a Citizen’s Budget is more accessible, simplified.

AO: So actually the issue of a Citizen’s Budget is a key factor when we’re talking about Accountability.  Because I notice that another issue that was discussed was the fact of low citizen engagement in the budget processes, and … I wonder what does that mean?  Is it that the citizens just opt out of the budget process, or is it that there is no opportunity provided for citizens to participate in the budget processes?  Any of you …

OU: I mean, let me start off.  It’s a mixed issue depending of course, on the State, on the particular constituency, but typically you see one of several things. Either one: there is … very high level engagement.

AO: Now what does “high level engagement” look like, how does it manifest?

OU: So high level engagement where you call together, you know, for example CSOs or citizens, key citizens, and you do like a one hour, one hour thirty minutes session, and then …

AO: Is this before the budget, or after the budget?

OU: Before the budget.  So in collating information, right, that go … in collating projects, ideas, as well as … key issues, take on a state level, right?  And I know certain states have their Community Development Associations at which level they do this. But you even have in some …

Rotimi Sankore: Sorry, issues that can help identify priorities?

OU: Precisely, that can help identify priorities and projects that need to be done in certain circumstances.  So this is kind of the middle level where you have something high level, where it’s … you’re almost ticking a box, and you take these several notes from several places and they’re filed and don’t really contribute to the process, but even a step like worse, is where you don’t have even have a needs assessment, sometimes you see that on projects that end up in the budget.  You can see a community that has three boreholes and their need is actually for … say, a health centre, but what is in the budget is yet another borehole, right, and you begin to ask: was a needs assessment really done in this case?

GO: Well, I think that one of the things that makes a budget more robust, is the bottom-up feedback into the budget in itself.  But in the case of both national and sub-national budgets in Nigeria, there are no structures to deliver anything from the citizens.  No open sessions no … so … there’s no engagement …

AO: Can you tell me a country where we see this type of thing happen?  I mean, are there any countries where this kind of thing …

GO: I may not be able to give specifics, but I can tell you about some communities, say in the US for example, who have a visioning document.  A county with a ten year visioning document. Now that visioning document has milestones per year of what that community seeks to achieve as it goes along the pathway of that visioning Document.  So that, what it seeks to achieve will automatically be an input into the budget process … so that you will be sure that you are actually helping that community to achieve what it said it seeks to achieve. 

AO: In fact I … if I can refer to myself as a one-time member of the Steering Committee of the State Peer Review Mechanism of the Nigerian Governors’ Forum, where the  … each … the States that were ready to go in for the process, they had a, they had to come up with their plan, and it was, it really … they really had to go into all the areas, they had to go around their communities …

GO: Aha!

AO: … they had to consult, and then they had to come up with this plan, then the technical experts of the State Peer Review Mechanism would come in and assess the plan, and eventually the State would now say: “This is our plan,” and then “this is what we intend to do.”  So they would then now be, there would be something that everybody would feel that they had participated in …

GO: That’s a much better process.

AO: But that, unfortunately, we had done just Ekiti State and Anambra State, and then the Nigeria Governor’s Forum went into a kind of meltdown, and after that, they just felt: No, this is a bit onerous and rigorous, let’s just pick out our star projects.

OU: So you make a good point about it being onerous, being rather, rigorous, tedious, it’s extremely tedious, and also, there’s a need for technical personnel.  Because I think ultimately people have such disparate, such wide-ranging needs, that if you’re getting input from the grass roots, ultimately you will have at least at the starting point, a wish-list, and you just can’t fulfil everything, So it’s then that process of  prioritising … in a way that still takes into account what people have said and in a way that is transparent to everyone that is the difficult and rigorous thing. And actually I have one example that I read about recently. And I know participatory budgeting has been historically big in Brazil, but I also found out recently, so in Boston right, in the US, where – it’s not the whole budget that is decided in a participatory format, but a small fund is say … is carted out, and youth in Boston decide what to do with that particular fund, in a way that is transparent, in a way that shows: Okay, we, can’t have it all, but these are the … this is the give and take, if we’re going to fund this, this can’t be funded.  And I mean, it’s just a small city and one particular fund for a particular group, because if we’re …

AO: Well, it’s a major city!

OU: …  because if we’re going to do it for, on the whole board, as you say, it’s onerous, and it’s very rigorous, or rather … rigorous.

AO: I mean, let me put it like this, because you see, there’s the … there’s the … because after all, if BudgIT is able to make some of these things simple for those who are not economists and mathematical experts and accountants to be able to at least have an idea, because it does seem to me that the Accountability part of it requires not just that people have an output, but that we also have an idea of what the money is spent on.  Because looking at the “State of the States” report, I mean you’ve talked about the states which are able to sustain their public spending, even without their allocation from the … Federal Accounts Allocation … whatever it is … (FAAC, I’ve forgotten what the “AAC” stands for, Gbenga will know) but … so there are those states that can fund everything they need to do, even without that money, and then there are more states, about 19 of them, that are able to, provided they get their allocation from the Committee.  But what’s noticeable is that it’s not … even some of the states which participate I mean, we call them “oil-producing states” many of them, their oil is produced so far out to sea that it’s really a bit of a stretch of imagination, but they participate in the division of the 13% that is set aside as derivation from oil, and yet some of them are still spending more than they are getting in income, and my question is … I mean, in your State of the States report, you focused on the … on just one aspect of delivery which was Health, and you were able to show how very far below even our own national targets the States are falling, not to talk of the international targets, or the Millennium … the Sustainable Development Goals and so on.  But I mean, we could go to education – we’re also below it. And even when we look at things like roads and so on, so I’m left to wonder, what exactly are the States spending this money on, and they still don’t have enough?

GO: Recurrent expenditure.

Oluwaseun Akinfolarin: Recurrent expenditure, basically …

AO: Yeah, but recurrent on what? I mean, even recurrent expenditure, for example, if the recurrent expenditure is that you are spending money on teacher’s salaries, then I would say yes, I understand.  I mean, yeah, we would like to see them also building better schools and so on, but definitely the situation where the States are always having to look for loans to be able to pay salaries …

OA: So there is a mystery …

RS: There is a gap we’re not paying attention to, which is the security vote gap.

OA: Yes!

RS: Because in theory … and all the experts say it all the time, and I’ve had long discussions with my old school colleagues that are in many of these state governments, and I say: “Look, what exactly happens here, where a State Government can decide that they can take 25% or 30% of everything they have and just put it into security votes? 

OA: And they don’t have to account.

RS: Yes, and it just goes like that.  And what happens?

AO: Well some states do, and some states don’t, but it’s not, but I think that … rather … I think even before … even though I appreciate that we should … there are the things that … there are the unknown unknowns and the known unknowns, but I think that even the known unknowns are alarming enough, and so I’m still asking: What is it that they are spending the money that they have on, that so many of them owe salaries?

GO: Let me give you an instance.  See, I think earlier this week, maybe on Monday, in the newspapers, there was a state that recently migrated onto – I think an equivalent of IPPIS.  They have about 101,000 … thereabouts, civil servants: over 40,000 were ghosts!  

AO: Yes!

GO: So if you are paying 40% of your payroll to ghosts …

AO: It’s fraudulent!

GO: … it’s fraudulent.  And what is more worrisome about payments to ghosts, is that we’ve never really bothered to ask who are the ghosts?  Who collected the salaries for those ghosts last month? If I had ten names on my payroll last month, and this month I discover that four of them were ghosts, so I got rid of the four, who collected the salaries of those ghosts last month?  Nobody bothered to ask!

AO: But doesn’t that require some level of smart  investigation, because the money is paid into banks …

GO: It’s paid in, so it doesn’t require anything!

AO: And the banks are not …

OA: So we’re getting to the point, it’s corruption.  Let’s also ask ourselves this question. The Nigerian budget has been growing over time in size.  The workforce that we pay the recurrent expenditure hasn’t grown as much, right? So our recurrent expenditure manages to grow … because of what you said, which is ghost workers and all the mechanisms that have been created to ensure that …

RS: Including in the police, by the way.

OA: Yes.  So that, I think this discussion actually is a source of concern and a need for investigation, to check who are the ghost workers?  What are the mechanisms that we use to bloat the recurrent expenditure? Because it’s this mechanism that has stifled the opportunity for us to grow the capital expenditure substantially so that we can do new projects that actually will lead to development. 

AO: Well, it’s also one of the things that came out of the report, that Nigeria has a relatively small government.  So … at every level, we have a small government, the amount that we pay for this our small government, compared to what our equivalent states like us (even though we are the giant of Africa) … that states that would like …  to be near us … 

AgO:  Those small small ones …

AO: … those small small ones, that they’re getting more bang for their buck than we as Nigerians are getting for our bigness and our size.

RS: For instance, when people say things like “ordinary Ghana there” …

AO: Yes, “ordinary Ghana there” is being very extraordinary by our own standards.  So we’re not … we have a small government, we are not seeing any … the result that we should see from it.  What is happening?

OU: And in terms of, I mean, this is not necessarily answering all the specifics of your question, but I think, just to highlight as you’ve said already, that recurrent expenditure is not necessarily bad.  In fact, we should be spending more because it’s … recurrent wise, because teachers, employing more teachers, training them, that will come from your recurrent side. Same also with doctors, which we have a scarcity of … enormous scarcity of, that will also come from your recurrent side …

AO: And nurses and everybody, other health workers.

OU: … exactly, yes, health care personnel, that will come from the recurrent side,  Now in terms of … and so it’s about not only the spending, but the quality of the spending as you’ve said, right?  How do we get the bang for our buck? How do we use what we have, yes, it’s not necessarily sufficient, because we all know we have revenue issues both at the national and sub-national sides, how do we use what we have to improve our indices.  And so the question of what are the States then spending on? Right, I think that is where, right now, we, in the State of States, we looked at a pretty aggregated current expenditure, and when we’re looking at certain states where you have say, economic sector, administrative sector there were some states where administrative sector, broadly speaking, broadly categorised, was getting more money than the economic sector (where we have that level of information).  But this I think, I mean I feel ties back to IDEAS, to the idea of IDEAS and the fact that transparency, greater transparency and Accountability allows for such questions to then be answered. And I don’t think we’ve said it yet, but it is worthy to note that States have been improving on the transparency angle, and that is …

AO: But it’s coming from a very low base.

OU:  It is coming from a low base, but still, where we … in 2018, around this time 2018, 20 Budgets were … available from States, and three Citizen Budgets too.  This time, in 2019, we have 32 State Budgets and 21 Citizen Budgets. And that means that (a) they are paying attention to advocates, and advocacy work and two, also, part of it too is because of incentives, right, there’s a  World Bank and CITAS programme which incentivises transparency and Accountability, that incentivises that with performance-based financing, however …

AO: I think it’s a case of …

RS: Is it a case of the more you show, the more you can chop?

AO: No, no!  The more you show actually, the more …

GO: … can ask questions.

AO: … the more people expect from you …

OU: Exactly!

AO: … when you actually get into this issue of understanding the need for Accountability and you approach it with Integrity, you will find that you actually don’t get a lot of kudos for it, you actually get people expecting more and criticising you more, but at the end, when we look at the indices of your State, whether it’s the number of doctors, whether it’s the maternal mortality rates and so on, you should see an improvement, because you as a performing Governor, an action Governor, would have realised that actually, you have been able to impact the lives of the people whose welfare is supposed to be your primary concern.  And that when you do that actually, the money that you thought you needed to be able to bribe your way to here or there, or to … not to be able to … to surround yourself with guards so that they don’t kill you after you’ve gone out of office, that actually, the people … I mean people are … we demand a lot, we’re not necessarily to be reasonable and understanding with you …

GO: Do we?

AO: … but really, we are satisfied with so little.

GO: We’re satisfied with so little!

AO: When we see the smallest bit of performance, we all start shouting people’s name and praising them!

GO: We even publish the fact that a Governor paid salaries! 

AO: Yes, … I mean that’s why I say we are satisfied with so little!

RS: Which is really the most basic …

GO: I mean, people work, and you pay them their wages.  What is to celebrate about that?

AO: So I want to say that I need to bring the IDEAS segment to a close (we’ve kind of overrun a little bit), so I want to thank you all very much for being on the IDEAS segment, for helping to highlight some of these issues, because Accountability at the end of the day is about delivering a better standard of living to the people who have been elected … who elected various public officers.  And we … you’re going to be discussing how some Governors don’t like to be asked questions, that when they’re asked questions, they start to talk treason and all this type of rubbish that they’ve been talking. But actually, the reward should be that you have done your best and you have improved the lives of the people, and that if they ask you questions, then you …

GO: You should be able to answer!

AO: … jolly well answer them.  It’s not, it’s not the … you are not a king or a God who cannot be questioned and even people com … Job complained to  God, so I don’t think we can say that gods cannot receive our complaints. But this is the issue: in the long run, if we want to go out and be proud as Nigerians, we need our people in office to accept the idea of being questioned, and we want to thank you, BudgIT, and all of you who are in Civic Hub, and accountants and economists who shed light on some of this darkness, because the more we shed the light, the more we will see Integrity being forced out of the corners where it’s hiding at the moment.  Thank you very much.

OU, GO & OA: Thank you.

RS: Thank you.

AO: You’re welcome.

AgO: Alright, so we’ll take a quick break, and when we come back and then we can delve into all of the other issues on Public Square.  So please keep listening!