Inclusivity In Policy Formulation And Budgeting


Otive Igbuzor, PhD


Executive Director,

African Centre for Leadership, Strategy & Development (Centre LSD)






Public policy has a central role to play in national development. Public policy provides signals and sets the regulatory and institutional frameworks that influence the actions of all actors, including private investors and consumers. [1] Public Policy helps to set agenda; formulate strategies; improve enabling environment and mobilise resources. The way resources are mobilised and spent encompasses the budget process.

The policy and budget process affects the content and implementation and ultimately whether it delivers services to citizens. This is why development scholars are in agreement that inclusivity in the policy and budget process can lead to better implementation and service delivery.

In this paper, we examine inclusivity in policy formulation and budgeting. But first, we explicate the concept of open and inclusive policy formulation.


Open and inclusive policy making is transparent, evidence-driven, accessible and responsive to as wide a range of citizens as possible. It strives to include a diverse number of voices and views in the policy-making process, including traditional cultures.[2] To be successful, these elements must be applied at all stages of the design and delivery of public policies and services. It has been shown that inclusive policy making enhances transparency, accountability and public participation and builds civic capacity. It also offers a way for governments to improve their policy performance by working with citizens, civil society organizations (CSOs), businesses and other stakeholders to deliver concrete improvements in policy outcomes and the quality of public services.


Studies have shown that the quality of public services is declining in Nigeria.[3] Our study shows that there are several factors responsible for the declining public service quality in Nigeria. The factors include poor planning; policy discontinuities, reversals and somersault; lack of participatory, open, transparent and inclusive budgeting; diversion of public funds; poor human resource management and poor performance management.

In Nigeria, it has been documented that right from the colonial period, development planning was viewed as a major strategy for achieving economic development and social progress, particularly, in the spheres of socio-economic infrastructures, industralisation, modernization, high rates of economic growth, poverty reduction, and significant improvements in living standards. Three plans featured in the pre-independence era for the periods 1946-1956, 1951-1955 and 1955-1962. Over the 1962-1995 period, three major phases in the planning experience emerged, namely, the fixed medium-term planning phase (1962-1985), policy oriented planning (1986-1988), and three year rolling plan phase (1990 till date). Scholars have pointed out that the golden period of planning on the African continent, 1960s and 1970s, could not be sustained from the 1980s because of two major factors: failure of development planning to meet the high expectations of rapid growth and development; and the resurgence of neo-liberalism and the implementation of short-term stabilization and structural adjustment programmes which are predicated on liberalization and deregulation. Meanwhile, these programmes that substituted for national development plans are counter plans which have failed to solve Africa’s myriad of economic problems. This is why some scholars have referred to the 1980s and 1990s as the “lost development decades” for Africa.

The challenge is that since return to civil rule in 1999, there has been a lot of sporadic and adhoc planning without adherence to long term planning. The National Economic Empowerment and National Development Strategy (NEEDS) and the Seven Point Agenda was abandoned after a few years. It is worse at the sub-national levels. Between 2004 and 2007, all the states developed the State Economic Empowerment and Development Strategies (SEEDS). But since 2007, most state governments do not have overarching development strategies.

In recent history, Nigeria has reverted back to development planning. The National Economic Empowerment and Development Strategy (NEEDS) was produced in 2004 during the Olusegun Obasanjo administration after consultations on the earlier drafts produced by the Presidential Economic Team. The NEEDS describes the strategy for poverty reduction, employment generation, wealth creation and value re-orientation in Nigeria. NEEDS was anchored on three pillars: empowering people, promoting private enterprise and changing the way the government does its work.

The Vision 20:2020 Economic Transformation Blueprint was launched by the Yar’Adua administration in November 2009. The Nigeria Vision 2020 economic transformation blueprint is a ten-year plan for stimulating Nigeria’s economic growth and launching the country onto a path of sustained and rapid economic growth to become one of the top twenty economies by 2020. The vision is anchored on the Nigerian Economic Empowerment and Development Strategy (NEEDS II) and the seven-point agenda of President Umar Yar’Aduda.

The vision had a social dimension of a peaceful, equitable, harmonious and just society; an economic dimension of a resilient, diversified and industrialised economy; an institutional dimension of a stable and functional democracy in a market friendly and globally competitive business environment and an environment dimension of environmental consciousness and sustainable management. The realisation of the vision is hinged on creating the platform for success by urgently and immediately addressing the most debilitating constraints to Nigeria’s growth and competitiveness; forging ahead with diligence and focus in developing the fabric of the envisioned economy and developing and deepening the capability of government to consistently translate national strategic intent into action and results by instituting evidence based decision making in Nigeria’s policy space.

The Economic Recovery and Growth Plan (ERGP) is Nigeria’s medium-term plan for 2017 -2020 developed by the Muhammadu Buhari administration to restore economic growth and pursue a sustained inclusive growth. It is envisaged that the plan will drive a structural economic transformation with an emphasis on improving both public and private sector efficiency to increase national productivity, diversification and achieve maximum welfare for the citizens, beginning with food and energy.

The plan was produced against the background that Nigeria recorded a high growth rate from 2011-2015 which averaged 4.8 percent per annum largely driven by high oil prices. The growth was non-inclusive and there was high levels of poverty, inequality and unemployment. As a result of a sharp decline in crude oil prices from mid-2014, Nigeria slipped into recession in the second quarter of 2016. The ERGP was therefore developed to restore economic growth and leverage on the ingenuity and resilience of the Nigerian people.

The approach of the plan includes focused implementation; initiatives to ramp up oil production to 2.5 mbpd by 2020; build on existing sectoral strategies and plans such as the National Industrial Revolution Plan and the Nigeria Integrated Infrastructure Master Plan; partnership between private and public sector; stronger linkage between plans and budget and effective collaboration and co-ordination with states. The principles of ERGP include focus on tackling constraints to growth; leverage the power of the private sector; promote national cohesion and social inclusion; allow markets to function and uphold the core values enshrined in the Nigerian Constitution notably discipline, integrity, dignity of labour, social justice, religious tolerance, self-reliance and patriotism. The ERGP has three broad objectives that will help to achieve the vision of inclusive growth namely restoring growth; investing in our people and building a globally competitive economy. To restore growth, the plan focuses on achieving macroeconomic stability and economic diversification. Investing in our people will focus on creating opportunities and providing support to the vulnerable by increasing social inclusion, creating jobs and improving the human capital base of the economy. Building a globally competitive economy will involve restoring Nigeria’s economic growth and laying the foundation for long term development through investment in infrastructure, improvement in business environment and promotion of digital led-growth.

Despite the return to development planning, there is no systematic planning framework for the country that ensures that adequate data and research, good information system, monitoring and evaluation and tracking of results. The end result is abandonment of projects, poor plan implementation and poor service delivery.

Scholars are in agreement that strategies and policies are fundamental to progress and development of countries. But many Ministries, Departments and Agencies in Nigeria are without strategic plans. For many of them, policies have not been reviewed for over a decade. Even the implementation of the policies have been characterized by discontinuity, reversals and somersaults. Meanwhile, there is no process or criteria or mechanism for filtering policy ideas in the country. Policy proposals are often not evidence based because ideas that enter into the policy agenda are based on the private interest behind them. The result is that the policy ideas are not strategic and implementation do not give the desired result leading to wastage of resources due to duplication and failed programmes and projects.

In any case, there is some level of improvement in the budgetary process since the return to civil rule with increasing citizen participation. But there are still huge challenges including late passage, limited citizen participation, fiscal indiscipline and poor oversight by the legislature. In particular, the Buhari administration has joined the Open Government Partnership which gives a great opportunity for citizen participation in the policy process. The Budget Office is opening up the budget process with the establishment of Budget Help Desk for Ministries, Department and Agencies and Citizens Budget Portal for engagement of citizens including tracking of projects. The Bureau for Public Service Reform is a shining example of access to information through implementation of the Freedom of Information Act. The Bureau  of Public Procurement is opening up the procurement system and using technology to promote openness and transparency. The National Orientation Agency is opening up engagement with citizens and developing principles for permanent dialogue mechanism. The Ministry of Justice is leading the review of laws to promote openness and transparency.

Another huge challenge is diversion of funds. Nigeria was ranked 142 out of 144 countries on the index of diversion of public funds on the World Economic Forum Index of official corruption. Finally, there is the challenge of human resource management and performance management. Human resource management in the public sector is characterized by weak incentive structure. There is a great difference between the real wages between the topmost level of public servants and the middle level/junior workers. In addition, there is a lot of favouritism. The World Economic Forum Global Competitive Report ranks Nigeria 125th out of 134 countries in the extent to which connected individuals and firms influence government policies and the award of contracts.

Performance management is the process of assessing and managing individual performance of workers. It requires supervisors to plan, explain, clarify, test for agreement, monitor and provide feedback. Performance management in the public sector is poor and ineffective.

From the above, it is clear that the provision of public service directly by government institutions or through creating enabling environment for private service providers involves processes and activities. Poor service delivery is primarily caused by problems in the service delivery process. This is why arresting the declining public service quality requires dealing with the problems in the service delivery process.


The problem of inequality is one of the greatest challenges facing mankind today. The past five decades have witnessed monumental changes in the world. Global economic wealth has increased sevenfold and average incomes have tripled.[4] Yet, poverty has increased to record high levels. The major problem is that wealth is concentrated in the hands of a few people while majority of the people live in abject poverty. The United Nations Development Programme (UNDP) in its 1998 report documented that the three richest people in the world have assets that exceed the combined Gross Domestic Product (GDP) of the 48 least developed countries. In 2015, the sixty-two richest people in the world had the same wealth as the poorest 50 percent (3.5 billion people). In the Organisation for Economic Co-operation and Development (OECD) countries, income inequality is at its highest level in the last fifty years. The average income of the richest 10 percent of the population is about nine times that of the poorest 10 percent.[5]  It has been documented that the drivers of inequalities across the world include globalization, skilled biased technological change and changes in countries policy approaches (ascendancy of neo-liberalism). As the recent Oxfam report on Inequality in Nigeria clearly stated, the scale of inequality in Nigeria is extreme.[6] The report indicates that poverty in Nigeria is very high and that the country is among the 30 most unequal countries in the world (page 9). As at 2010, more than 112 million people were living in poverty. According to the 2015 Human Development report, Nigeria had the highest number of people living in multi-dimensional poverty (88.4 million) in the world, followed by Pakistan (83 million) and Ethiopia (78.9 million) (Page 16).  The report shows that the gap between the rich and the poor in Nigeria is very wide. According to World Bank data, in 2009, the poorest half of the population held only 22 percent of national income (page 9). Meanwhile, the richest Nigerian man will take 42 years to spend all his wealth at one million per day (page 4). The report notes that the amount of money that the richest Nigerian man can earn annually from his wealth is sufficient to lift 2 million people out of poverty for one year. Similarly, Nigerian lawmakers are one of the best paid in the world: the average annual salary is $118,000 equivalent to 63 times the country’s per capita (in 2013)(page 5).  So, we have “the world’s highest paid lawmakers preside over some of its poorest people.” (page 9). The report points out that the annual economic growth averaged over 7 % in the 2000s. (page 13). But the paradox is that as the country gets richer, only a few benefit and majority continues to suffer from poverty and deprivation (page 9). An interesting dimension of the report is regional inequality between the regions and the states with poverty incidence being highest in the North west (71.4%), followed by North East at 69.1 % and North Central at 60.7 %. The South West has the lowest poverty rate at of 49.8 % followed by the South South  (55.5%) and South East (59.5%). There is also gender inequality mediated through a myriad of discriminatory traditional and socio-cultural practices that put women at disadvantage in a number of areas compared to men (page 4).  The statistics are chilling: In Jigawa State, 94 % of women (against 42% of men) are illiterate. Nigeria has one of the lowest rates of female entrepreneurship in Sub-Saharan Africa (page 18). Nigeria is the country with the lowest share of female parliamentarians in Sub-Saharan Africa (page 20).  Nigeria is also at the top of the list of countries with the highest number of children out of school (10.1 million). (page 25).

The report identified the main drivers of poverty and inequality in Nigeria to include the following:

  1. Retrogressive Taxation: In Nigeria, the poor is taxed heavily and the rich and big multinational receive questionable tax waivers, tax holidays and loopholes for tax avoidance.

  2. Poor Budgeting System and Allocation: The share of government budget which are allocated to education, health and social protection (three critical policy areas to tackle poverty and inequality) are among the lowest in Africa. (page 24). For example, in 2012, 6.5 % of the budget was allocated to education, 3.5 % to health and 6.7 % to social protection (in 2010). By comparison, in Ghana, these shares were respectively 18.5 % (in 2015) , 13.8 % (in 2015) and 9.1 % (in 2010).  The end result is that from 2005 to 2015, a total of N77 trillion was appropriated through budgets towards the development of the country, yet the state of roads, electricity and water supply, schools and hospitals remain inadequate to meet even the basic needs for a large part of the population.

  3. Poor resource management and poor policy implementation: The resources allocated to provide services to citizens are poorly managed leading to service failures. This led to a situation documented in a case study in the report where Eno, an 18 years woman who could not afford hospital services was delivered by a traditional birth attendant and was “detained by the midwife for over a week until she paid the N1,000 ($5) delivery fee.”

  4. Elite Capture, Cronyism and Favouritism: Elite capture of public sector policies and resources undermines the productivity of the most important sectors of the economy and prevents the fair distribution of the benefits of growth. For instance, “the mismanagement of the $16 billion appropriated to improve electricity supply during the 8 years of the Obasanjo regime from 1999 to 2006.” (page 28).  On NDDC, the report documents that “often, rogue contractors discard the projects, in collusion with political leaders and NDDC officials.” (page 42)

  5. Prohibitive Cost of Governance: The cost of governance is very high and the expenditure is made to benefit a few. As stated in the report, “the ruling class constituted by the few, establishes and legitimises an exploitative property system through which it determines the allocation of opportunities, income and wealth, relying on the use of state power, including the use of oppressive state agents such as the police and armed forces.”(page 32).



This report Inequality in Nigeria: Exploring the Drivers by Oxfam is a sad commentary on the development trajectory of Nigeria. However, despite the depressing statistics and the huge problems identified, the report clearly states that “deliberate policy interventions and political commitment, backed by an active, vibrant civil society and enlightened, proactive citizens can break the cycle.” (page 7).  The report prescribes some policy solutions which are essentially designed to arrest the drivers of poverty and inequality in Nigeria. The solutions can be categorised into the following groups:

  1. Laws and Policies: In a country where majority of the people are poor, the laws and policies should be made to be favourable to the poor and not the rich. There is an urgent need to implementation of the National Gender Policy 2014 and the Violence against Persons Prohibition (VAPP) Act 2015 and passage of Gender and Equal Opportunities Bill.

  2. Progressive Taxation: Nigeria need to institute a tax system that is more progressive and close the loopholes that allow for tax avoidance and tax dodging in all tiers of government.

  3. Addressing unemployment and civic inclusion: The government need to tackle the unemployment crisis in the country through several means including driving inclusive growth; creating new job opportunities; reviving local manufacturing; promoting the ease of doing business in Nigeria; improving infrastructure; harnessing the entrepreneurial spirit of Nigerians; establishing industrial clusters and technology centres; promoting start-ups and encouraging ICT talents, hubs and villages.

  4. Addressing Corruption: by displaying political will; ensuring justice, recovering looted funds and building institutions.

  5. Addressing the Political/Elite capture: by creating enabling environment for sustainable wealth creation; promoting oversight, accountability and social justice.

  6. Supporting Small scale farmers who produce over 80 percent of total agricultural output.

  7. Promoting and encouraging active citizenship by promoting civic education; budget literacy and monitoring and building grass roots movements to institute a new leadership culture where citizens are capable of taking responsibility for themselves and their communities.

  8. Promoting Social Integration or Social Inclusion:  Social inclusion is a process by which efforts are made to ensure equal opportunities for all, regardless of their background, so that they can achieve their full potential in life.[7] It is a multi-dimensional process aimed at creating conditions which enable full and active participation of every member of the society in all aspects of life, including civic, social, economic, and political activities, as well as participation in decision-making processes. Promoting social integration  or social inclusion leads to an inclusive society. An inclusive society is a society that over-rides differences of race, gender, class, generation, and geography, and ensures inclusion, equality of opportunity as well as capability of all members of the society to determine an agreed set of social institutions that govern social interaction.[8]  



It is well known that it is through the instrumentality of the budget that government can allocate resources and deliver services to the people. But in Nigeria, there are a lot of blockages to effective budgeting including lack of transparency in the budget process; poor prioritization; frivolous expenditure and poor oversight. Since inception in May, 2016, PERL has facilitated engagement with the budget process and has learnt some lessons in the process.

Engagement with the budgetary process for the past two years indicate that there is progress in terms of engagement but the level of engagement is still low. Citizens do not make any input before the budget is collated and submitted to parliament. Legislators are not consulted on the selection of projects. Oversight of the budget process by the legislature, civil society and the media is weak. There is still confusion on the limits of legislative power in appropriation and the budget is passed late. In addition, there is low budgetary allocation to sectors that will have impact on the lives of citizens such as Agriculture, health, education and infrastructure. Recurrent expenditure is high and there are challenges with macroeconomic assumptions, debt profile and prioritization.

Moreover, there are challenges with implementation; late passage of the budget and a laborious procurement procedure which have not been addressed in the 2017 budget process. Legislative oversight is weak and monitoring of the budget process by citizens groups do not feed into the oversight process.   Budget implementation reports are not produced timely and made available to the public as stipulated by the Fiscal Responsibility Act (FRA).

Finally, lessons over the years indicate that internal and external auditors have limitations in the performance of their duties and the reports they produce are not readily available to citizens.

From the lessons learnt, it is clear that the budgetary process can be improved by addressing the process, content, implementation and audit issues. There is an emerging consensus among civil society that the following issues need to be addressed going forward:

  1. Promoting citizen engagement in the budgetary process from selection of projects through implementation to monitoring and evaluation.
  2. Civic education: social, economic and political resilience, budget literacy, comparative analysis of best practice in budgeting
  3. Partnership among those working on budget issues
  4. Engaging the government: on promises made during elections, development plans, interrogating budget assumptions and engaging legislators.
  5. Advocacy and Campaigns: creating Transparency and Advocacy Champions

6.      There is the need to strengthen the office of the Auditor General through constitutional amendment and institutional building.

  1. Budget monitoring and reporting: There is the need for citizens groups to adopt a common budget tracking template to produce reports that can be used by the legislature during oversight. 
  2. Capacity Building for legislators, CSOs and the media on the budgetary process




Inclusive education and health is a process that involves the transformation of schools and  health facilities to cater for all including vulnerable groups (the poor, women, persons living with disabilities etc). The aim is to eliminate exclusion that is a consequence of negative attitudes and a lack of response to diversity in race, economic status, social class, ethnicity, language, religion, gender and ability.

For this to happen, the following are necessary:

·         Evidence based policy making

·         Comprehensive strategic planning including sectoral plans

·         Citizens input into the budgetary process

·         Needs Assessment and taking the needs of citizens into the budget

·         Increase budgetary allocation to education and health

·         Focus on provision of facilities, equipment/teaching aids, quality personnel and materials

·         Tracking of budgetary allocation, releases and procurement procedures

·         Media reportage and tracking of all stages of the budget process

·         Internal and External auditing of all expenditure focusing on value for money


Public policy is very important for the progress and development of any nation. The challenges of development in Nigeria is partly as a result of lack of open and inclusive policy making process leading to poor service delivery and inequality. There is the need for inclusive policy making especially in education and health to improve service delivery and reduce inequality in Nigeria.





[1] Qureshi, Zia, The Role of Public Policy in Sustainable Infrastructure.

[2] OECD (2013), Governance at a Glance 2013

[3] Igbuzor, O (2015), Nigeria: Public Administration Reforms and the Emergence of Buhari. Lagos, Joe- Tolalu & Associates.

[4] Watkins, Kevin (2000), The Oxfam Poverty Report. An Oxfam Publication

[5] Oxfam

[6] Oxfam (2017) Inequality in Nigeria

[7] DESA (2009), Creating an Inclusive Society: Practical Strategies to Promote Social Integration.

[8] Expert Group Meeting on Promoting Social Integration, Helsinki, July, 2008.