Analyzing the ICT Expenditure from Nigeria’s 2016 Budget

Living in Nigeria, you will no doubt be aware by now that the country presented its 2017 budget not too long ago. Amid whispers of concern, President Muhammadu Buhari unfolded the 7.2 trillion Naira/$23 billion budget before the National Assembly. For a quick glance at the financial distributions, you can find a convenient breakdown from BudgIT .

Our focus today, however, is to delve into the previous year’s spending, specifically in the realm of Information and Communications Technology (ICT). To understand this better, we must recall that Nigeria’s 2016 budget, despite its failure to deter the inevitable recession, was valued at 6.07 trillion Naira. At the time, the initial proposal was predicated on oil prices resting at $38 per barrel. Given that oil is Nigeria’s primary source of foreign exchange and prices remained low throughout 2016, the government had to pivot and rely on alternative sources of revenue, such as taxes and the development of other sectors, to bridge the budget deficit.

One of the strategies adopted to increase revenue from these other sectors involved the heavy investment in ICT services. A notable example was the Federal government’s investment in software that enabled the operation of a unified account, known as the Treasury Single Account (TSA). Before the introduction of TSA, government agencies were permitted to operate numerous accounts in commercial banks, taking their pick from the revenue pile. However, President Buhari has since mandated the transfer of funds to the TSA in a bid to fight corruption.

To gain insight into the individual spending habits of government agencies on ICT, BudgIT supplied a breakdown detailing the fiscal expenditure of various organizations in 2016 . In some instances, budgets were as modest as 200 million Naira/$630,000. To explore this further, we examined the 2016 appropriation bill with particular interest in the capital expenditure of ministries [link to 2016 appropriation bill]. For instance, the Federal Ministry of Science and Technology received a budget allocation of 25 billion Naira/$79.3 million, but the portion of this that was dedicated to ICT spending during the same period was 660 million Naira/$2 million.

The ICT spending record in these ministries and agencies is, unfortunately, somewhat underwhelming. The Ministry of Defense, for example, was allocated 294 billion Naira/$933 million for capital expenditure. Out of this amount, a meager 1.4 billion Naira/$4.4 million was channeled towards ICT related services. Albeit national security reasons may limit the divulgence of specifics, it is clear that the ICT spending is merely a drop in the vast defense ocean. ICT expenditure typically encompasses a range of costs, including telephone bills, software/hardware acquisition, ICT consultancy, IT-based stationary, and general IT maintenance.

Nigeria has made impressive strides in the ICT sector since its return to democratic rule in 1999, particularly with the substantial deregulation allowing for increased private sector participation. Today, Nigeria boasts a tele-density of over 100 percent, and projections indicate 30 percent of the population will be connected to broadband services by 2018. Much of this progress can be attributed to private sector funding, yet the pace of public sector development seems to be lagging. A prominent challenge has been a reluctance or slow pace by many government institutions to adopt electronic processes such as archiving and document management systems. Critics argue this could be due to a largely non-tech savvy civil service or potentially due to the ease of destroying paper trails over digital ones in corrupt practices.

Despite the gloomy outlook, it is important to note the efforts made particularly by President Buhari’s administration to upscale the use and adoption of ICT in government agencies. Nevertheless, issues persist, such as the dismal number of agencies complying with the directive to transfer management of their websites and emails to Galaxy Backbone [link to Galaxy Backbone], a company tasked with handling governmental ICT activities.

While we are speculative about the level of ICT spending that will be featured in the 2017 budget, it is clear that significant advancements in ICT could greatly enhance the efficiency and transparency of Nigerian governmental agencies. But are the necessary changes to accommodate advances in ICT ready to be implemented within these agencies? Only time will tell. And the current administration’s emphasis on ICT spending will undoubtedly impact this evolution.

Take a closer look at the ICT spending of Federal agencies [insert detailed spreadsheet of ICT expenditure here] and feel free to download the file for a more detailed analysis. For more insights into government budgeting, we recommend visiting BudgIT [link to BudgIT], who have made it their mission to make governmental budgets more understandable and accessible to average citizens.