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better systems, better health

i nfo@HealthSystems2020.org
w w w. H e a l t h S y s t e m s 2 0 2 0 . o r g

Public Budgeting and Expenditure
Management in Three Nigerian States:
Challenges for Health Governance
April 2012

IntroductIon
Financial data and management are critical
to effective health governance. Access
to, and use of, timely and accurate health
budgeting and expenditure data are key
to public health officials’ capacity to make
future investment decisions, understand the
effectiveness of current allocations for health,
and act as effective stewards of the health
system. once decisions are made about
how to allocate resources, the managerial
processes for ensuring that resources arrive
in the right place, are used for the correct
purposes, and are reported on accurately
and transparently, also form an integral
element of health governance. Available and
transparent financial data in turn enable the
exercise of accountability. these data support
accountability relationships within government
– for example between health ministries and
legislatures, and between federal and local
levels of government – and relationships
between government and citizens. consistent
internal financial control mechanisms, effective
budget and expenditure reporting, and
citizen monitoring all contribute to ensuring
accountability.

Several tools exist that can help analysts
and decision makers to review funding and
spending flows and management, and to
identify resource uses and leakages. these
include assessment instruments such as Public
Expenditure tracking Surveys, which follow
the flow of funds from the central government
down to decentralized levels and to service
providers, and Quantitative Service delivery
Surveys, which examine the efficiency of
frontline service delivery. A Public Expenditure
Management review (PEMr) combines
elements of both surveys and examines the
overall governance environment of public
expenditure management by studying both
how health resources are used and the process
by which those resources were allocated.
In 2010 and 2011, Health Systems 20/20
conducted a PEMr of the health sector in
three nigerian states (cross river, nasarawa,
and Sokoto) based on the methodology
developed and used by the World Bank (see
El-Khoury et al. 2011a, 2011b, and 2012).
the PEMr methodology was chosen because
effective allocation and use of health sector
resources have been a major concern for the
Government of nigeria, especially following
a 2008 Health Systems Assessment in which
data needed to track resource flows, budgets,

and expenditures were largely unavailable (Kombe et al.
2009). the assessment highlighted the need to perform an
in-depth review of public health expenditure systems in
nigeria to provide a better understanding of the current
links between public spending and service delivery
outcomes.
nigeria is a country with widely acknowledged and
significant governance problems, which have been
exacerbated by its high degree of natural resource
dependence (Sala-i-Martin and Subramanian 2003).
According to the revenue Watch Institute1, the gas
and oil sector accounts for 85 percent of government
revenue and 52 percent of GdP. nigeria ranked 41st
out of 53 countries on the 2010 Mo Ibrahim African
Governance Index2, with stagnant to worsening scores
over the past five years. Nigeria’s budget process remains largely impenetrable. the country fell among the poorer
performers on the 2010 open Budget Index3, scoring
18 out of 100 possible points, putting it at less than half
the average country score of 42. As a result of increased
federal transfers of oil funds, state and local government
revenues have increased dramatically.Yet despite some
efforts to improve budget planning, execution, and
reporting at the federal level, such improvements have
not extended consistently to subnational levels of
government.
It was in this...
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