Zainab Ahmed, Minister of Finance, Budget and National Planning, has stated that it will require commitment, loyalty collaborations between the Federal Government and the National Assembly in strengthening public investment management in the country.
The minister made this known in her opening remarks during a two-day retreat held last week by the Budget Office of the Federation (BOF)/National Assembly Appropriation Committee on the Budget Process, with focus on Strengthening Public Investment Management (PIM).
According to the minister, while the government has found it necessary in providing infrastructure for the people, which it is currently doing, there is the need for it to set up a management system that would effectively ensure that funds going into any project are judiciously used.
She said: “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.
“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 set up Public Investment Management Units.
“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.”
With the setting up of the PIM, according to the minister, there will be a reduction of infrastructure deficit which has stunted growth and development in the country over the years, also the system promises to bring transparency in project appraisal and selection.
“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,” she stated.
In seeking more collaborative effort between the two arms of government, the minister 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.”
Ahmed, however, 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.
Nigeria will be joining the league of nations across the Sub-Saharan Africa (SSA) region that have adopted the PIM units in their respective countries.
“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,” the minister noted.