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An open letter addressed to President Tinubu and the leadership of the National Assembly raises serious concerns about the concurrent operation of three appropriation laws in Nigeria without constitutional alteration.
Our reporters received a copy of the letter signed by Dr. Tonye Clinton Jaja and Dr. Omorogbe Asemota, a Canada-based macro-economist with a Ph.D. in Public Finance, which argues that this practice is both illegal and unconstitutional, with significant negative economic implications.
Dr. Jaja, a lawyer, states his conclusion plainly: “it is illegal and unconstitutional violation of Sections 82, 83 and 121 of the Constitution of the Federal Republic of Nigeria, 1999.” He emphasises that the Constitution clearly mandates a fixed life-span of one calendar year (12 months) for any Appropriation Law, a position also confirmed by the Supreme Court in the landmark case of Attorney-General of Bendel State v Attorney-General of the Federation & 22 Others (SC. 17/1981). According to Dr. Jaja, the only way for the Nigerian government to legally run three concurrent appropriation laws would be “to first of all apply the method for alteration of Section 9 of the Nigerian Constitution to alter Sections 82,83, and 121.”
Dr. Omorogbe Asemota, whose expertise in Public Finance and experience at the National Institute for Legislative and Democratic Studies (NILDS) are highlighted, provides an economic perspective on this unusual practice. He outlines both the perceived advantages and significant risks.
Dr. Asemota notes that “Nigeria’s practice of running three budgets at the same time—main, supplementary, and future (new) budgets—is legally supported and not considered an anomaly by the Budget Office. This approach intends to offer fiscal flexibility and ensure smooth transitions in public financial management.” He lists several “Advantages Supporting the Practice”:
- “Legal and Institutional Backing: Nigerian financial regulations expressly permit the concurrent operation of budgets, providing a structured legal framework.”
- “Enhanced Flexibility: This system allows the government to quickly respond to unforeseen events (e.g., security or humanitarian emergencies) through supplementary budgets, while continuing ongoing projects from previous fiscal years.”
- “Continuity for Multi-Year Projects: Many large projects and donor-funded initiatives naturally span several years. The ability to concurrently manage budgets ensures these projects are not hampered by rigid annual cycles.”
- “Global Alignment: Other countries (e.g., India, Indonesia, Kenya) adopt similar practices for managing fiscal overlap, especially for capital-intensive or delayed projects, which validates its practicality in certain contexts.”
- “Performance-Driven Budgeting: The structure aligns spending with actual project life cycles rather than arbitrary calendar endpoints, supporting better project delivery and fiscal planning.”
However, Dr. Asemota then details critical “Risks and Concerns”:
- “Coordination Complexity: Overlapping budgets require high coordination among ministries and agencies. Poor alignment can cause confusion over which budget line supports which activity.”
- “Transparency and Oversight Challenges: Simultaneous management of several budgets can impede clear tracking, complicate audit trails, and potentially increase the risk of misallocation or misuse of funds.”
- “Procurement and Disbursement Issues: It may slow down allocation, as agencies must navigate multiple accounting streams, sometimes leading to project delays.”
- “Risk of Fiscal Indiscipline: If not carefully managed, agencies could perpetuate old commitments, undermining accountability and leading to possible fiscal slippage.”
- “Public Perception: The perception of running multiple budgets at once could fuel concerns about governmental efficiency and clarity in financial management.”
Asemota’s analysis concludes that “Operating multiple national budgets concurrently is not a recommended long-term practice for Nigeria. While it may offer short-term flexibility to address pressing and unforeseen challenges, the drawbacks heavily outweigh the benefits in the Nigerian context.” He points to “Operational Complexity and Risk,” “Fiscal Indiscipline and Reduced Accountability,” “Transparency Issues,” and “Inflated Costs” as major problems. He stresses that this practice reflects “Legacy Problems, Not Reform,” emphasising that “experts emphasise that the concurrent budget practice largely reflects legacy issues—a sign of historical slippages in planning and execution—not a deliberate, desirable policy choice. Ideally, each fiscal year should have its own clearly defined budget, with older budgets expiring as intended.”
Furthermore, he states that this approach is not aligned with “Global Standards,” noting that “most countries (including India, Indonesia, and Kenya in recent years) avoid running full-scale multiple national budgets concurrently, except when necessary for specific, temporary circumstances like transition years or special emergencies.”
In conclusion, the letter asserts that “The multi-budget approach should only be a temporary measure used in rare, unavoidable circumstances. Long-term reliance signals deeper planning or governance weaknesses that must be addressed. For Nigeria to achieve fiscal stability, transparency, and strong economic management, it should transition to a disciplined, single-budget system with strict timelines, robust implementation oversight, and effective closure of each budget cycle.”
