NIGERIA: CONGRESSIONALLY MANDATED REPORT ON FISCAL

UNCLAS ABUJA 000481

SIPDIS

SIPDIS

DEPARTMENT FOR EEB/IFD/OMA (SNOW AND FIGUEROA)

E.O. 12958
TAGS: EAID EFIN ECON PREL NI
SUBJECT: NIGERIA: CONGRESSIONALLY MANDATED REPORT ON FISCAL
TRANSPARENCY IN COUNTRIES RECEIVING USG ASSISTANCE

REF: STATE 16737


1. (U) Mission provides the following information per reftel
request: President Umaru Yar'Adua's administration assumed office in
May 2007, and has committed itself verbally to upholding the
principles of openness, transparency and full accountability in the
management of public funds, and has not approved the operation of
any "special accounts" or the withholding of details of such
accounts from the National Assembly and the public.

2. (U) In the 2008 budget presented to the National Assembly on
November 8, 2007, there were provisions for 20% of the total to be
spent on security in the Niger Delta; 13% on education, and 7% on
the agricultural sector. The administration also plans to focus on
power and energy, supporting projects in partnership with the
private sector. The administration is attempting to follow
international best practices in discussing and executing the budget.


3. (U) Some progress on fiscal transparency has been made from 2003
to date.
-- The government since 2004 has adopted the Medium-Term Expenditure
Framework (MTEF),forecasting revenue and expenditure for a three
year period.
-- The National Assembly has stepped up its monitoring and
oversight.
-- The GON functions under the auspices of the 1999 Constitution.
The federal budget is published with minimum delay in a government
publication. Budget reports are available in print and electronic
form soon after approval by the National Assembly and President. The
Minister of Finance made detailed public presentations about the
budget in the run up to its presentation to the National Assembly.
Budget data can be found in selected government websites, notably
www.budgetoffice.gov.ng, and www.fmf.gov.ng.


4. (U) In May 2007, the National Assembly passed into law the Fiscal
Responsibility Act (FSA 2007) to ensure transparency and
accountability of public expenditures. The 36 state governments
agreed to pass fiscal responsibility legislation at the state level
by December 2007. The Minister of State for Finance, Aderemi
Babalola, said 13 states had passed the legislation by late January
2008 and the others will be encouraged to follow. The Public
Procurement Act (Act) was passed by the Assembly and signed into law
on June 4, 2007. According to the Act, all budget expenditures on
major government-funded contracts are screened to ensure that
expenditures are in line with prevailing international rates.


5. (U) Consultations among different segments of society take place
more than in the past, increasing participation in the budget
process at all levels, particularly civil society. In addition, a
two-day summit on the 2008 budget organized for civil society groups
and funded by the USG in November 2007 recommended that budget
allocations be separated to make for better monitoring and
evaluation. Participants suggested the government should make
budgetary allocations for capacity building in ministerial
departments and agencies (MDAs); increase budget utilization and
appropriation; support capacity building efforts for civil society
organizations (CSOs); and make financial allocations for budget
tracking and evaluation at all levels to strengthen fiscal
transparency.


6. (U) In 2007, USG-supported advocacy efforts contributed to the
passage of fiscal responsibility and public procurement legislation.
The USG also supported passage of the Freedom of Information Bill
but it has not yet been signed into law. Since 2004 various USG
funded activities provided technical support to the Budget Office of
the Federation, Central Bank of Nigeria, the Office Accountant
General of the Federation, the Debt Management Office, and the
National Assembly Budget Office, as well as civil society
organizations to enhance their capacity to develop sound policies
that support transparency and good governance in Nigeria.


7. (U) Comment: Corruption, transparency and accountability remain
key problems for this government and this country. Even though
progress has been noted in the cable, the GON has not yet turned
around the real problem of corruption.

SANDERS