Buhari’s economic management challenges (2)

Continued from yesterday
THIS means that in the U.S. democracy, policy conception, budgeting and coordination are directly undertaken by suitably advised elected persons (President and Parliament), while their appointees merely implement, under the sharp scrutiny of the elected persons.

The PMB regime needs to urgently address the democratic deficit that has emerged in Nigeria in the past 16 years, where elected officials, Presidents and legislators alike, had not only stood aloof of policy conception, design and coordination, but flagrantly pass the buck to unelected appointees over which they exercised no effective scrutiny, having not been a part of the policy conception and design in the first place.

The regime inherited a situation of growing divergence between conferment of powers through elections and the exercise of such powers between elections. Nigeria needs to learn from the U.S. example and replicate them to ensure democratic effectiveness in delivering better economic outcomes.

Economic Intelligence: It should also be said that Nigeria did have a National Economic Intelligence Committee (NEIC) from 1994 to 2012 when the last regime scrapped the agency in line with the recommendations of an ad-hoc Orosanye Committee who reasoned that ‘the NEIC was established by a Decree, which granted it similar mandates with the National Planning Commission, Revenue Mobilization, Allocation and Fiscal Commission (RMAFC) and the Fiscal Responsibility Commission (FRC) with regard to performance monitoring and evaluation in the public sector.’ And that ‘the functions that NEIC performs are replication of those of NPC, RMAFC and FRC.’1 The Committee also recommended that NEIC enabling law also be repealed, but it does not seem that the NEIC Act has been repealed by the National Assembly.

It would appear that the Orosanye committee could not tell the differences between NEIC and NPC, RMAFC, or FRC, because none of the seven members of the committee was an economist. As such the committee could not tell the difference between economic planning and economic intelligence. They could also not tell the differences between economic intelligence and fiscal activities like revenue mobilization, revenue allocation, and fiscal responsibility issues.

At different points in time, Nigeria had merged the budget and economic planning functions within the same agencies, demonstrating the ancillary nature of the two policy design and coordination activities. Both must always reflect the President’s priorities and preferences.

Economic intelligence on the other hand involves evaluation of the activities of all agencies of government, including the Presidency, to make them accountable. This function must be independent of the President, and could not have been replicated in NPC, RMAFC and FRC.

The U.S. GAO provides the best example of economic intelligence mandate. The GAO was created by the Budget and Accounting Act of 1921 that also established the BOB that was to eventually become the OMB, to ‘investigate, at the seat of government or elsewhere, all matters relating to the receipt, disbursement, and application of public funds, and shall make to the President … and to Congress … reports [and] recommendations looking to greater economy or efficiency in public expenditures’2. GAO provides government with oversight of federal programmes, insight into ways to improve government, and foresight into long-term trends. Recent GAO work has addressed the use of Recovery Act and TARP funds, problems in mortgage financing, the conflicts in Iraq and Afghanistan, food safety, climate change, postal reform, border security, and the financial pressures facing state and local governments.

The GAO is headed by the Comptroller General of the United States, appointed by the President, by and with the advice and consent of the Senate, for a 15-year, non-renewable term. The President selects a nominee from a list of at least three individuals recommended by an eight member bipartisan, bicameral commission of congressional leaders. The Comptroller General may not be removed by the President, but only by Congress through impeachment or joint resolution for specific reasons. Since the establishment of the GAO in 1921, there have been only seven Comptrollers-General, and no formal attempt has ever been made to remove any.

• These quotes are from the Main Report of the Orosanye Committee, page 130.
• Historical facts about CEA, JEC, OMB, and GAO are gleaned from Wikipedia Encyclopedia and the websites of the various agencies.
• Concluded
• Teriba is the CEO of Economic Associates (EA).