Cablegate: Where Does All That Money Go? The Move Toward

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UNCLAS SECTION 01 OF 02 LAGOS 000361

SIPDIS

E.O. 12958: N/A
TAGS: PGOV EFIN KDEM SOCI NI
SUBJECT: WHERE DOES ALL THAT MONEY GO? THE MOVE TOWARD
PARTICIPATORY BUDGETS

REF: LAGOS 98

1. (SBU) Summary: On August 27-28, the Senate Appropriations
Committee held a zonal consultative meeting on inclusive
budgeting in Osun state, inviting state governments, civil
society organizations, and media from the southwest to
provide input into the 2010 federal budget. The federal
government's efforts were welcome, as organizations urged the
Senate to enact legislation that would require inclusive
budgeting at the federal and state levels. Anambra state has
already initiated participatory budgeting and made
improvements in public finance and development planning.
Ogun and Lagos states have also made efforts to include
stakeholders in the budget process, a positive move towards
fiscal accountability and transparency at the state level.
End Summary.

2. (SBU) On August 27-28 in Oshogbo, the capital city of Osun
state, the Senate Appropriations Committee hosted the
southwestern states in a two-day session on the 2010 federal
budget. This zonal planning meeting is part of a United
Nations Development Program (UNDP) initiative to advance
inclusive budgeting at the federal level. On the first day,
the representatives of the six southwestern states discussed
state and regional priorities in future federal budget
allocations. On the second day, the Senate Chairman on
Appropriations, Senator Iyiola Omisore, sought input from
civil society organizations and the media on the
participatory budget process.

3. (SBU) On September 2, Abiodun Oyeleye, director of the New
Initiative for Social Development, an Ekiti-based
organization, told Poloff that civil society groups urged the
Senate to pass a law on participatory budgeting. This would
encourage the House Assembly in each state to implement
inclusive budgeting at the state level. Participants argued
that integrating the public into the process would ensure
that funds marked for development would actually reach their
designated communities. They also emphasized the need for a
federal budget and tracking commission to monitor
expenditures and budget implementation.

4. (SBU) While involving states in the budget process is the
most recent development at the federal level, some states in
southern Nigeria have already begun to feature inclusive
practices in their own state governments. Anambra is the
first of the southeastern states to incorporate participatory
budgets and improve public finance through a partnership with
the European Union,s Support to Reforming Institutions
Program (Reftel). Since 2008, Governor Peter Obi (All
Nigeria People,s Party - ANPP) has sought input from civil
society and local government areas in the budget process,
which has improved transparency and disclosure of state
financial accounts. By accepting change in public finance,
the Governor has found that his own integrated development
strategy has been more effective as more stakeholders support
his plans. D.B. Afam Obi (People's Democratic Party - PDP),
Deputy Speaker of the Anambra State House of Assembly, told
Poloff that the participatory budget was an important way for
the House of Assembly to hold the Governor accountable, since
all of the stakeholders had a say in the process. Afam Obi
added that when the House was passing the 2009 budget, they
looked at how successful the Governor had been at
implementing the budget promises made to local governments
and communities projects.

5. (SBU) In the southwest, Ogun state has implemented budget
sessions open to the public where the ministries, proposed
budgets are negotiated. Kayode Samuel, Ogun State
Information Commissioner, told Polspec that Governor Gbenga
Daniel (PDP) has sought to involve stakeholders in all parts
of the budget process and shares budget information when
requested. In Lagos, Governor Babatunde Fashola (Action
Congress - AC) invites civil society groups to attend and
voice concerns at budgetary sessions. While both of these
states allow communities and civil society to voice their
budget priorities, neither state yet releases enough
information to be held accountable for how funds are actually
spent. As many of the southwestern and southeastern states
receive low federal allocations compared to their
oil-producing neighbors, the transparency of the state budget
process is all the more important in tracking where the

LAGOS 00000361 002 OF 002

limited funds are allocated.

6. (SBU) There is still work to be done in other states in
the region, Ayo Adebusoye of Nigerian Network for NGOs
(NNNGO) told Poloff. In one NNNGO community project in Oyo
state, the local government development committee said it was
not willing to confront local and state governments, as
budget tracking would be perceived as antagonistic.
Adetokunbo Mumumi, Executive Director of the Socio-Economic
Rights and Accountability Project (SERAP), told Poloff that
in their awareness campaign in Lagos state, they found that
citizens are afraid to confront local government leaders
about the misuse of funds. SERAP and similar organizations
have embarked on campaigns to train communities on their
rights to be included in the budgetary process and hold
public leaders accountable for how funds are spent.

7. (SBU) Comment: While the federal inclusive budgeting
effort is still in its nascent stage, civil society groups
and state governments alike are pleased to have a say in
where the money goes. Most importantly, states like Anambra
and Lagos show that incorporating civil society into public
finance is not all bad - in fact, it appears to lead to
greater support for the governors, own projects. At the
least, it gives communities the opportunity to identify
priorities at the local and state level, broaden the
participation of the public in the budget process, and
promote availability of budget information to the public.
While a small step in the quest for transparency,
participatory budgeting is a positive move toward building
democracy at the state and federal level. End Comment.

8. (U) This cable has been coordinated with Embassy Abuja.
BLAIR

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