MONTHLY BROWN BAG PRESENTATION

Topic: Budgeting and Economic Planning for Sustainable Democratic Governance (SDG)- THE DUE PROCESS

By Dr Emma Ogueri(Development Consultant)

Presentation outline

• Painting the Picture• Definition of concepts• Sustainable Democratic Governance (SDG)

Vision• SDG Stakeholders• Due process in governance, its meaning• Due process steps• Consequences of lack of due process• Causes of cost escalations & refinancing• Effects of price escalation• Way forward

Painting the Picture• Sustainable Democratic Governance (SDG) as

advocated by the presidency will stimulate development at the grassroot as Mr President had declare himself a servant leader.

• The Legislative arm and Judiciary are threading along same path

• The 2nd tier of government ought to champion and cascade same to the 3rd tier (the LGAs)

• Economic Planning and Budgeting occupy strategic position in any democratic governance

• The teeming Nigerian population and development agencies clamour for Structured (planned) Development in all sectors

Painting the Picture contd.

• No Budgetary planning Process in place• Budget justification, allocation, monitoring and evaluation of

sectoral expenditure are lacking in most government organs especially the LGAs

• Policies and Procedures are not in place• Incumbent individualistic ideas govern most administrative

set up in Nigeria• SMART targets are not set towards achieving sustainable

development• Reactive approach is taking to address issues instead of

tackling the real causes• Statistical information are not available • THE BIG ONE “Misappropriation of fund is a common

occurrence”

Definition of Concepts

• Budgeting is the process of allocating estimated funds to specific activities.

• Economic planning is a process of arranging array of activities that are time bound in order to achieve certain socio-economic objectives

• Due process is an act of establishing an auditable procedure and process of a system with a view to ensuring compliance

• Sustainable Democratic Governance is a system of ruling that is transparent, people- oriented and possesses qualities of CONTINUITY.

SDG VISION

• The vision of every Sustainable Democratic Governance is to evolve a system of relevance with appropriate stakeholders in decisions that affect entire populace in order to deliver their mandate and thereby institutionalise democratic principles towards ensuring continuity even in the absence of the incumbent.

SDG STAKEHOLDERS

• Main Stakeholders- Federal Government (The Presidency, Ministers,

Senators, House of Rep members, etc)- State government, Hon members,

Commissioners,- Local government, Councilors

Others- The Media- NUT-Multinationals- Students- Labour- Professional bodies- The masses

DUE PROCESS IN GOVERNANCE

• This is the application of policies and procedures relevant to various establishments and organisations within and outside governmental framework.

• Policies will need to be established towards realising certain objectives after thorough consultations with stakeholders.

• Procedures will be put in place to ensure proper execution of all policy framework. The procedure will spell out Responsibilities, Accountabilities, Consultations and Information (RACI)

DUE PROCESS STEPS IN GOVERNANCE

• Step -1: Create public awareness through enlightenment / workshops. The benefits of due process will need to be identified and used to market the principle. Encourage innovators /early adopters of the process

• Step-2: Pilot-test or pre-test the idea. Use social research process to find out about non-compliance and reasons for non compliance

• Step 3: Address reasons advanced by research respondents. For instance, put in place policies that will checkmate visible corruptions like the “legalized” collection of bribe by the law enforcement agents at check points, littering of garbage along the streets, use of motor bikes without helmet, etc

DUE PROCESS STEPS contd

• Step-4: Re-plough identified findings to finalise policies and decisions on due process

• Step 5: Launch the process

• Step 6: Monitor compliance

• Step 7: Apply consequence management (Carrot & Stick principle)

Consequences of lack of due process 1. Cost Escalation - a situation where originally estimated and

approved project budget is said not to be sufficient to deliver the project.

• It also could mean a situation where projects are over estimated and awarded for execution

• Whichever, cost escalation is a budgetary item that irritates auditors during project reviews.

2. PROJECT REFINANACING - a situation of re-injecting or re-allocating budget to already awarded development projects either deliberately or otherwise

• It is a financial mismanagement (Misfeasance) tool

• Auditors deliberately look out for possible project refinancing in the case of probes for irregularities

CAUSES OF COST ESCALATIONS AND REFINANCING

• Low bid in order to win the development contract

• Market forces and Inflationary trend

• Kick back or up-front payments

• Award of development contracts to settle party loyalists or relations

• Lack of knowledge of project scope before bidding or better still unrealistic submission of bids

• Fund mismanagement and lack of Monitoring

• Etc, Etc, Etc

EFFECT OF PRICE ESCALATION • Results into legacy projects

• Makes development planning and Management irregular and uncoordinated

• Increased instability and threat to corporate existence and national peace

• Increased propensity for fraud and mismanagement

• Etc, Etc, Etc

WAY FORWARD ON DUE PROCESS• Aggressive marketing of policies and procedures on “DUE

PROCESS”.• Develop Socio-Economic Baseline for all LGAs based on

identified SD indicators • Government Organs to develop its procedure guide and

budgetary framework; especially, the LGAs.• Policies should be based on empirical research• Independent organisations should monitor and evaluate

due process compliance and performance of the following; (a)Government functionaries especially the LGAs,(b)Multinational oil corporations(c) Public domain in the area of behavioural / attitudinal eg in

environmental Mgt, etc(d)Research and Development Agencies• Periodic seminars and workshops with relevant sectors and

stakeholders on the process and gains including setting short, medium and long term targets for subsequent reviews.