Keynote Address at the Subnational Audit Efficacy (SAE) Index 2023 Report Launch
Delivered on Thursday 14th March 2024 by
Professor Antonia Taiye Simbine
(Director-General, Nigerian Institute of Social & Economic Research (NISER)
Protocols
Ladies and gentlemen, esteemed guests, and distinguished participants.
I stand before you today with immense pleasure and a sense of shared purpose as we gather for the public presentation of the Subnational Audit Efficacy (SAE) Index 2023. It is truly an honor to be invited to address this distinguished audience on a matter of great significance as espoused in the theme of today’s event – “Expanding Accountability Frontier for Equitable and Inclusive Subnational Development in Nigeria.”
In our quest for a prosperous and inclusive Nigeria, the sub-national level plays a pivotal role in shaping the trajectory of our development. Today’s event marks the unveiling of the flagship research report, a culmination of rigorous efforts, insightful analyses, and a commitment to fostering transparency and accountability across all 36 states of our great nation.
Context
The theme for this year’s SAE Index, “Expanding Accountability Frontier for Equitable and Inclusive Subnational Development in Nigeria,” underscores the pressing need to ensure that governance at the subnational level becomes a catalyst for equitable and inclusive development. As we navigate the complexities of governance, we must strengthen accountability mechanisms to address disparities and create opportunities for every citizen. Let me say upfront that the need for improved accountability and transparency in public funds management and policy implementation is by no means limited to subnational governments. At the federal level, the government is equally on its toes, introducing accountability mechanisms and policy audit vehicles. Programs and policies at the sub-national level however impact more directly on the quality of life of citizens, thus, by beaming a searchlight on these lower tiers of government, Nigeria can better address disparities, promote transparency, and create an environment that engenders inclusive development.
Understanding the Accountability Frontier
If one is to put a definition to it, the accountability frontier refers to the boundaries within which governments are held responsible for their actions and decisions. In the context of subnational development in Nigeria, expanding this frontier entails widening the scope and effectiveness of mechanisms that ensure transparency, responsibility, and responsiveness to the needs of the diverse population.
Design of the SAE Assessment
The objectives of the SAE Assessment in my opinion are quite laudable. It seeks to examine the levels of transparency and accountability that are operational in the management of public funds and implementation of public policies at the state level. The Public Financial Management (PFM) cycle as shown by authors in the past often starts with the ‘Policy’ node. More recent work in PFM however shows that ‘Evidence’ from research is the first node before policy design. Hence, we have a cycle from Evidence to policy design, then to detailed program design, next is resource allocation to programs (budgets), then cash backing, after which we have budget execution (by implementing agencies), and then performance evaluation of budgets. The findings from performance evaluation form new evidence that feeds back into policy design and the cycle continues. For each node of the PFM cycle, one can in fact embark on a distinct analysis where the node is expanded to a loop.
The SAE Index captures mostly the budget execution and performance evaluation nodes of the PFM cycle. By way of value addition to the SAE Index methodology, I suggest that subsequent research interrogates issues around the policy design process and use of evidence in such design. These issues go a long way in determining public policy implementation and budget execution, which are in turn foundational to the audit process. The additional information proposed on the SAE can be gotten via interviews with relevant officials, using a complementary research instrument. The new information need not form part of the scoring parameters on the SAE index, but I believe they will provide insights into the performance of states on the eight scoring parameters. Many times, the ineptitude observed at the budget execution and performance evaluation nodes can be traced to poorly designed policies and programs which come about as a result of non-usage of evidence in the policy formulation and program design stages.
Findings from SAE Index 2023
I must say I like the line on the PLSI web page which says Transparency and Accountability Breeds Responsibility. Truly, actors have a heightened sense of responsibility when transparency and accountability mechanisms are in place. Let me commend PLSI for the longitudinal research instituted on the SAE index. The advantage of such research is that it enables progress tracking. I was additionally enthused when I discovered that PLSI is a grantee on the MacArthur On Nigeria Program, of which NISER is also one, researching Research Support for Corruption Control through Behaviour Change.
The findings from the research reported in the SAE index 2023 are by no means surprising. The fact that reforms implemented via the World Bank-assisted SFTAS[1] program are not being upheld is a story that is told ever so often about reforms. Whether reforms relate to anti-corruption, public financial management, or direct engagements with smallholder farmers, the sustainability of reforms is almost always an issue in Nigeria’s public sector. One reason for this is the use of Special Purpose Vehicles (SPVs) to drive reforms. We must be clear about one thing, Reform success stories that endure, must have institutionalization as a critical element.
During an experience-sharing session at one of the NISER-MacArthur project meetings, we listened to the CEO on the Convention for Business Integrity (CBI), share the story of reform at the Nigerian ports. The critical success factors were identified to include
- High-level leadership support- from the office of the Vice- President
- Domiciliation of the reform secretariat within an agency at the port- the Nigeria Shippers Council
- Co-creation of solutions but the handover of implementation to identified Reform Champions within the agency
These critical success factors speak largely to institutionalization.
With respect to transparency and accountability mechanisms, the key Challenges at subnational levels relate to:
- Fiscal Accountability: Financial mismanagement at the subnational level has been a persistent challenge in Nigeria. Ensuring transparent budgeting, effective revenue collection, and judicious spending are essential components of expanding fiscal accountability.
- Service Delivery: Disparities in access to basic services such as education, healthcare, and infrastructure across different regions contribute to inequality. Enhancing accountability involves monitoring and improving the efficiency of service delivery mechanisms at the subnational level.
- Decentralization and Local Governance: Strengthening local governance structures is vital for inclusive development. However, challenges such as lack of access or mismanagement of funds and inadequate capacity often impede effective decentralization. Expanding the accountability frontier requires addressing these obstacles to ensure local leaders are responsible and responsive to their communities.
There are several strategies which can be deployed for expanding the frontiers of accountability:
- Technology and Data-driven Governance: Implementing technology-driven solutions can enhance transparency and accountability. Digital platforms for financial transactions, public service delivery, and monitoring can facilitate real-time data collection and analysis, enabling better governance. One key takeaway from NISER’s MacArthur Foundation Project engagement at the JAMB HQ was that digital technology reduces the human-human interface and enhances performance monitoring. These technologies reduce opportunities for corrupt behavior and naturally improve transparency and accountability.
- Citizen Engagement: Actively involving citizens in decision-making processes empowers communities and ensures their needs are considered. Participatory budgeting, town hall meetings, and feedback mechanisms can bridge the gap between government officials and the people, fostering a sense of shared responsibility.
- Strengthening Anti-corruption Measures: Implementing and reinforcing anti-corruption measures is crucial for expanding the accountability frontier. Independent anti-corruption agencies, transparent procurement processes, and stringent penalties for corruption can contribute to a more accountable subnational governance structure.
There are equally several countries from which we can draw useful lessons with respect to accountability and transparency mechanisms at subnational levels of government
- Brazil: Participatory Budgeting in Porto Alegre
Brazil’s experience with participatory budgeting in Porto Alegre is a noteworthy example of expanding accountability at the subnational level. Porto Alegre pioneered a model where citizens directly participated in the budgeting process, allowing them to influence resource allocation decisions. Lessons learned include the importance of citizen engagement, transparency in financial processes, and the need for a robust communication strategy. Nigeria could adopt a similar approach, introducing participatory budgeting mechanisms to involve local communities in decision-making regarding resource allocation and public projects.
- India: Decentralization in Kerala
Kerala, India, has successfully implemented a decentralized governance model. The state devolved powers to local bodies, ensuring that decisions and resources were managed at the grassroots level. This empowered local leaders and communities to address specific development needs. The lesson for Nigeria lies in the effective decentralization of powers, coupled with capacity-building initiatives for local leaders. Nigeria could benefit from studying how Kerala implemented this approach to foster accountability and inclusivity.
- Colombia: Anti-Corruption Measures in Bogotá
Bogotá, Colombia, provides insights into successful anti-corruption measures at the subnational level. The city implemented strong oversight mechanisms, including an independent anti-corruption agency, transparent procurement processes, and citizen engagement initiatives. The lessons for Nigeria involve establishing and empowering anti-corruption agencies at the subnational level, reinforcing transparent procurement practices, and actively involving citizens in monitoring and reporting corrupt practices.
- South Africa: Digital Governance in Cape Town
Cape Town in South Africa has embraced digital governance to enhance transparency and accountability. The city implemented digital platforms for citizen engagement, service delivery monitoring, and financial transactions. Lessons for Nigeria include investing in technology-driven solutions to improve governance, enhance financial transparency, and engage citizens in decision-making processes. Implementing digital platforms can provide real-time data, ensuring effective monitoring of subnational development initiatives.
- Philippines: Local Governance in Naga City
Naga City in the Philippines is recognized for its effective local governance, focusing on citizen-centric policies and service delivery. The city established mechanisms for regular public consultations, feedback channels, and streamlined administrative processes. Nigeria could benefit from adopting a citizen-centric approach, fostering local governance structures that actively involve citizens in decision-making and provide efficient channels for feedback.
Nigeria can leverage the successes and lessons learned from these global examples to shape policies and practices that effectively expand the accountability frontier in subnational spaces.
There are also some good lessons to learn from the federal level in Nigeria.
Federal level MDAs in Nigeria for example have Anticorruption and Transparency Units (ACTU), these would be useful at subnational MDAs if they do not exist yet. There are also performance audit mechanisms domiciled in the Ministry of Budget & Economic Planning (MBEP), with specific KPIs for MDAs. There are also mechanisms entrenched in the offices of the Accountant General and Auditor General. The fact that MDAs have to report on specific deliverables in respect of their various programs to the FMBEP fosters a sense of healthy competition and drives performance and accountability, at least to some degree in these MDAs.
Conclusion:
Expanding the accountability frontier for equitable and inclusive subnational development in Nigeria is a multifaceted challenge that requires commitment from multiple stakeholders including state and non-state actors, citizens, and the international community. By addressing fiscal mismanagement, improving service delivery, promoting decentralization, and embracing innovative strategies, Nigeria can build a more accountable and responsive subnational governance structure that lays the foundation for sustainable and inclusive development and ultimately reduces some of the day-to-day stresses currently being faced.
As I conclude, I want to extend my heartfelt appreciation and commendation to the management and research team of Paradigm Leadership Support Initiative (PLSI) for your outstanding efforts in planning, executing, and working on the Subnational Audit Efficacy (SAE) Index 2023. As an organization with research as a core mandate, I appreciate the challenges of data and information access, not minding the Freedom of Information (FoI) Bill. I believe the results from the research should inspire state governments to improve their performance on all eight scoring parameters. It may also be useful to design an incentive structure to spur the performance of states on these eight criteria.
The Subnational Audit Efficacy Index serves as a crucial tool for identifying areas where government institutions at the subnational level can optimize their practices, improve existing structures, and accelerate development. Your contribution in this endeavor is a significant step towards creating a more equitable and inclusive Nigeria.
Ladies and Gentlemen, thank you very much for your attention.
[1] States Fiscal Transparency, Accountability and Sustainability
