The task of strengthening public investment will come easy with commitment, loyalty and collaborations between the National Assembly and the Ministry of Finance, Budget and National Planning, according to Mrs. Zainab Ahmed, Honourable Minister of Finance, Budget and National Planning.
She said this in her Opening Remarks at a two-day retreat held last week by Budget Office of the Federation (BOF)/National Assembly Appropriation Committee on the Budget Process with focus on Strengthening Public Investment Management (PIM).
On conceptual context to public investment management and the reason that the government has had to increase its borrowing, Mrs. Ahmed noted that President Muhammadu Buhari, recognising the importance of infrastructure from his first day in office, prioritised infrastructure provision and upgrade by ensuring that resources are adequately mobilised for infrastructure provision.
“In a developing economy such as ours, the provision of infrastructure is usually a cardinal objective. This is mainly due to the multiplier effect of provision of roads, rails, schools, hospitals, etc. on the growth and development of the economy.
According to Mrs. Ahmed, engaging in such huge public investment in infrastructure therefore requires a management system and structure that will ensure that government gets value for money spent. Hence, the need to setup Public Investment Management Units.
In her words: “This is even very compelling given that government has had to increase its borrowing to fund these public investments in infrastructure owing to revenue challenges. Thus, because public investment refers to government’s spending on infrastructure, its management literally means the process of handling expenditures to ensure that government gets value for its investments.”
On the benefits of strengthening our public investment management system, she said that the following are the key specific gains that Nigeria stands to achieve: Strengthen PIM processes and integrate them in the legal framework – This will reduce infrastructure deficit that has impaired the growth and development of our nation; increase transparency in the project appraisal and selection stage; develop practical tools and information technology (IT) systems for managing public investment, such as project concept and pre-screening templates, and instituting independent reviews to appraise large projects; and strengthen the core functions and capacity of PIM units, strengthen coordination between these units and key stakeholders such as finance and planning, and continue to develop the units’ skills to undertake or evaluate project appraisals.
Concerning the relationship between the legislature and the executive in the course of ensuring adequate PIM system, Mrs. Ahmed said: “For us to have a strong public investment management system that will help us reduce our infrastructure deficit, deepen our PFM reforms and assist in achieving the goals of our medium to long-term development plans, the executive and the legislature must perform their separate roles effectively while also collaborating to ensure overall success.”
“The role of both the executive and legislative cannot be over emphasised. As we all know; the budget is the main fiscal policy instrument through which public investment on infrastructure is carried out by the government. Besides, ensuring adequate provisions of resources for public investment in infrastructure in key sectors of the economy is one of the key points of our medium-term expenditure framework which forms the basis for preparing the annual budget in line with provisions of the Fiscal Responsibility Act 2007.
“Since the coming on board of this administration, the BOF has taken several steps aimed at ensuring allocative efficiency of resources as well as transparency in budget implementation and reporting. For example, government’s commitment to achieving transparency in public expenditure is reflected in the progress that we have made since the country signed up to the open government partnership (OGP) in May 2016 as the 70th member country.
The Honourable Minister also noted that the oversight role of the legislative arm of government is particularly important for strengthening the public investment management system. “Irrespective of the budgetary allocations, the lack of quality spending will erode the objectives of such high allocations. As such, the legislature, using its instrumentality of the oversight function, can help improve the quality of government’s spending on infrastructure. This usually complements the monitoring efforts of the Ministry of Finance, Budget and National Planning,” she noted further.
Mrs. Ahmed disclosed that PIM Units have now been established across the Sub-Saharan Africa (SSA) region. “These units are usually located in a country’s Ministry of Finance or the Ministry of Planning or Economic Development. Their purpose is to strengthen the appraisal, selection and implementation of infrastructure projects that many countries are (or will be) using to boost the economic recovery from the COVID-19 pandemic.