Revista Romana de Economie (Jun 2012)
PROJECT ABANDONMENT, CORRUPTION AND RECOVERY OF UNSPENT BUDGETED PUBLIC FUNDS IN NIGERIA
Abstract
Large amounts of unspent funds budgeted for implementing development projects have been recovered from Nigeria’s public officials since President Yar Adua directed in 2007 that responsible Nigerian Ministries, Departments and Agencies (MDAs) must refund such funds at the end of every fiscal year. While unspent funds recovery represents some progress in the “war on corruption” entrenched by previous governments in the 1980s, the current policy limited by concentrating narrowly on recovery of financial resources thereby excluding accounting for other project resources (human skills application, time management or optimization among others) that are usually applied to project implementation but lost through public officers’ failure and/or delays to implement planned projects. This article examines the magnitude of unspent funds recently recovered by the government from its various ministries, departments and agencies (MDAs). The general objective of this article is to contribute towards improving the development project management culture in Nigeria. The specific objectives are: To highlight the magnitude of unspent funds in Nigeria’s MDAs; and to show some adverse consequences of failing (or delaying) to spend funds allocated in the budget forimplementing projects in economic sectors and on the pursuit of development objectives. Survey and description methods were used. Data on the refund of unspent funds was obtained from secondary sources (records of MDAs) and analysed using qualitative and simple quantitative techniques. Results show that a high rate of projects delay and /or abandonment was discovered shortly after the inauguration of President Yar’ Adua and his administration in May 2007. Although some project funds have been recovered, other project resources (time wasted, human skills/hours) and development benefits that would have accrued from completion of the planned and financed projects have not been recovered but lost. The fact that most of the abandoned and/or delayed projects were to be implemented in key sectors such as electricity (power) supply, construction of roads and other works, petroleum, oil and natural gas development (which forms the major sources of revenue for the Nigerian economy, education, health and so forth), represents huge opportunity losses arising from losses of development benefits and spin-offs that would have accrued from the various economic sectors of Nigeria’s economy. The implication of these findings for policy includes the need to include all project resources in the list of the recovery and resource accounting effort of the government’s anti-corruption programme.
