When Budgets Undermine Institutions

A national budget is often described as the most important policy document of any government. It is more than a statement of revenue and expenditure. It is a blueprint for governance, a reflection of national priorities and the legal instrument through which public institutions are empowered to discharge their statutory responsibilities. Every appropriation should therefore reinforce the mandate of the institution receiving public funds. When it does not, the consequences extend beyond accounting irregularities to the very foundations of good governance.

Recent investigative reports revealing allocations to federal agencies for projects apparently unrelated to their statutory responsibilities have once again exposed a disturbing feature of Nigeria’s budgeting process. The reported allocation of over N600 million to the Nigerian Press Council for school streetlights and another allocating N350 million to the National Agency for the Control of AIDS (NACA) for grain distribution in Sokoto are not just a curious entries in the 2026 Appropriation Bill, but a deeper institutional problem that deserves national attention.

Audits and public accountability reports by BudgIT and Tracka revealed that the Federal Government earmarked N22.15 billion in the 2026 budget for the construction, renovation and furnishing of 106 royal palaces across the country. Of these, 11 projects worth N5.85 billion reportedly have no identifiable physical locations, making public oversight difficult. The organisations also noted that none of the 45 Ministries, Departments and Agencies (MDAs) assigned to execute these projects has the statutory mandate to construct royal palaces.

The concern is not new. BudgIT’s analysis of the 2025 budget found that the National Assembly inserted 11,122 projects worth N6.93 trillion, many of them domiciled in agencies lacking the technical competence to execute them. These agencies effectively became vehicles for constituency projects, handling road construction, rural electrification, solar streetlights, ICT centres and vehicle procurement despite their primary mandates relating to cooperative education, building research, horticulture training and oceanography.

The issue is not whether schools require streetlights, vulnerable citizens deserve food assistance or traditional institutions need infrastructure. They do. The real question is why agencies established by law to perform specialised regulatory and technical functions are increasingly assigned projects that bear little relationship to their statutory mandates. At what point did Nigeria’s national budget cease to be a framework for governing and become a catalogue of projects distributed without regard to institutional responsibility?

The Nigerian Press Council exists to promote professional standards, uphold ethical journalism and strengthen media accountability. NACA coordinates Nigeria’s response to HIV/AIDS through policy, prevention, treatment and partnerships. Their mandates are clearly defined because institutional clarity is essential for effective governance.

When agencies are routinely assigned projects outside those mandates, the integrity of the budget begins to erode. Instead of strengthening institutions, the budget becomes a vehicle for accommodating projects wherever political convenience or fiscal opportunity permits. Accountability is weakened because responsibility becomes blurred. If a regulatory agency installs streetlights or a public health agency distributes grains, who should ultimately be held accountable for the quality, sustainability and value for money of those projects? More importantly, what happens to the agencies’ core responsibilities when limited financial and administrative resources are diverted elsewhere?

Over the years, investigations by civic organisations, budget monitors and the media have repeatedly uncovered ministries, departments and agencies implementing projects far removed from the purposes for which they were created. The latest revelations simply reinforce concerns that Nigeria’s appropriation process is drifting away from institutional discipline.

One consequence of this practice is the gradual erosion of institutional capacity. Many public agencies already struggle with inadequate funding, limited technical personnel and rising public expectations. Every naira appropriated outside an agency’s core mandate carries an opportunity cost. Resources that should strengthen regulatory oversight, research, service delivery or programme implementation are redirected to activities for which the institution possesses neither comparative advantage nor operational expertise.

Equally troubling is what this reveals about Nigeria’s broader budgeting philosophy. Public debate during every budget season usually focuses on the size of the budget, oil price benchmarks, fiscal deficits, borrowing and revenue projections. These are important issues. Yet far less attention is paid to a more fundamental question: are the right institutions being funded to perform the right functions? A budget should not merely allocate money; it should allocate responsibility. Once those two become disconnected, performance becomes difficult to measure and accountability even harder to enforce.

This is where both the executive and the National Assembly must exercise greater discipline. Legislators understandably seek projects that address the needs of their constituents, and constituency development is a legitimate objective in any representative democracy. However, such projects should be implemented through agencies with the legal mandate, technical competence and institutional capacity to deliver them effectively. The appropriation process should not become a mechanism for stretching institutional mandates beyond recognition.

Nigeria would benefit from adopting what may be called a mandate compatibility test for every budget proposal. Before any project is assigned to an agency, three simple questions should be asked. Does the project fall within the agency’s establishing law? Does the agency possess the expertise to execute it effectively? Can the agency reasonably be held accountable for the outcome? If the answer to any of these questions is no, the project should be reassigned before the budget is approved.

Ultimately, the strength of a national budget is not measured by the trillions of naira appropriated or the number of projects listed in the Appropriation Act. It is measured by whether public resources strengthen institutions, improve service delivery and produce measurable development outcomes. A budget that disregards institutional mandates does more than misallocate resources; it weakens accountability, erodes institutional capacity and undermines the architecture of government itself.