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Forming a collaborative mechanism for budget reforms in Nigeria

Part 2 of 2

In the first post of this two-part series, we shared how Results for Development (R4D) supported Nigeria’s Federal Ministry of Health in reviewing its health sector budget and found areas for improvement. A major reform that came out of this process was the development of a collaborative mechanism — the Planning and Budget Committee (P&B Committee) — between the departments of planning research and statistics and the department of finance. 

In this post, we’ll share the challenges the Nigerian government faced in institutionalizing and sustaining the collaborative mechanism. 

The Challenges 

Though the collaborative mechanism was approved by the senior leadership of FMOH, several challenges were encountered during the set-up, the institutionalization processes and implementation of the activities included in the workplan of the P&B Committee.  

Funding remains a major challenge in the implementation of activities geared towards improving the health budget process in Nigeria. For instance, funds for implementing key activities included in the approved FMoH budget was either poor, delayed, or not released at all; this impacted on overall budget implementation and performance. Oftentimes, activities meant to be done in Quarter 1 are either deprioritized or postponed to Quarter 2 of the fiscal year. 

Examples of such activities are the AOP and mock budget development exercise, resourcing of the committee’s annual workplan; all of which are crucial to the budget reform process, if delayed they have significant impact on budget approvals, release and performance of the health sector. 

Though the support provided by R4D to the FMoH has helped spin the wheels and nudge things forward but it is well known that relying on technical partners has its limitations. Without adequate and guaranteed funding from public sources, technical partners might not be able single-handedly build the capacities of both the P&B Committee to provide oversight and coordination of the budget process as well as supporting the planning cells to coordinate the AOP and mock budget development across all DAPs of FMoH. 

Overall, the frequency and scope of capacity building activities to improve the budget process work have been inadequate thus impacting on the quality of AOP developed as well as the ability to accurately capture the required data for budget performance monitoring. 

This problem of inadequate funding has been a disincentive to members of the P&B committee since it hampers them from carrying out activities on their workplan. If these activities are carried out, the outcomes would be readily visible to the FMoH senior leadership who might be motivated to fund critical activities of the committee and concurrently improve budget allocation to health via leadership advocacy and prioritization. 

What has been achieved? 

Despite the many challenges faced in institutionalizing the P&B committee, the health budget process has obviously experienced some degree of transformation and recorded some key achievements with support from R4D and the implementing partners; HSCL and Sydani. They include among others; the novel mock budget development exercise which has been institutionalized and is now conducted annually, capacity development of the PCs for proactive and early budget development, the early development and submission of annual FMoH budgets since 2018, yearly development of Health Sector Annual Operational Plans (AOPs) such that by 2021, 87% of the health sector budget was informed by the AOPs, as opposed to 57% at the onset of the reforms in 2018. The budget process is now more strategic while also strengthening the collaboration and understanding of budget planning and finance. 

Till date various budget-related tools and processes have been developed and deployed by the FMoH through the guidance of the P&B committee to ensure there is sustainability of the collaborative mechanisms and the processes. These include; reinstitution of the planning cells with revised Terms of Reference (ToR) to lead the annual budget development process, development of the FMoH budget process map which defines all the critical steps in the budget cycle, the AOP and mock budget development tools now fully embedded and used by all the planning cells, the revitalization of the P&B committee, development of costed workplan and Key Performance Indicators (KPIs) to track budget performance, the development of Performance Monitoring Approach (PMA) dummy dashboard used to pilot budget performance monitoring with focus on the 2021 budget implementation and finally, the development of Intermediate outcomes for the budget PMA to track achievement of Universal Health Coverage. 

All these were achieved in spite of the COVID-19 pandemic, its economic impact (which impaired funding of the committee’s activities), and the lockdown measures that delayed implementation of the activities for the year 2020.  

Notwithstanding, the P&B committee with R4D-Sydani support was able to achieve 100% implementation of its 2020 workplan; thus meeting a key objective of its formation, expectations are that the committee will build on these achievements in 2021. 

What we learned 

R4D over the course of providing technical assistance for the FMoH budget process reforms has gathered very useful lessons especially while co-creating this collaborative mechanism for the budget process reforms and working towards its functionality 

Firstly, the success of the collaborative mechanism is linked to strong political will and commitment of the senior leadership of the Health Ministry. The approval of the senior leadership of the FMOH (the HMH, and PSH) provided an enabling environment for creating the necessary structures for the implementation of this collaborative framework. Additionally, the level of commitment of the co-chairs of the P&B Committee and its members is directly proportional to the drive to implement its mandates. 

Secondly, breaking the norm and official red tape to institutionalize new processes in a large and complex institution such as the FMoH can be challenging, hence the imperative to channel efforts towards aligning with existing structures within government institutions as well as developing standard operating procedures for the new processes and activities. In addition, it is important to incorporate a sustainable mechanism for knowledge management and skills transfer to new members, where outgoing committee members will be required to clearly define their roles and responsibilities and processes for carrying out budget-related activities in the handover notes to incoming members to ensure sustainability.    

Lastly, it is important to take deliberate steps to create visibility for key activities of the budget reform process, highlight the achievements, synthesize, and share learnings from the work done by the collaborative mechanism toward reforming and strengthening the budget process.

Through quarterly dissemination of newsletters and breakfast meeting with the Minister of Health, R4D/Sydani team have helped to share key updates with stakeholders, and media coverage of the progress made so far. This also helps to ensure the buy-in of the relevant stakeholders in the budget process reforms especially the Ministry of Finance, Budget and National planning as they have the final say with regards to budget allocation and releases.  

***

Though a lot of progress has been made to move the FMOH budget reform processes to the next level, there is still room for improvement. This is a call to action for the P&B committee’s budget to be institutionalized in the overall FMOH’s budget for sustainability of the collaboration and provision of adequate funds to resource the committee’s annual workplan which is crucial to the  growth of budget reform process. Improved and strengthened systems takes time, the budget reform process requires continuity to ensure long-term sustainability. 

Photo © Lane Goodman/Results for Development

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