Government Spending on Estacodes and Compensations Raises Concerns
Over a two-year period, Nigerian Ministries, Departments, and Agencies (MDAs) spent over N16 billion on estacodes for official travel and compensation for individuals affected by government projects. This spending has drawn criticism from civil society organizations, who question the prudence and accountability of such expenditures in a nation grappling with significant socio-economic challenges. Specifically, N9.079 billion was spent on estacodes between February and November 2024 alone, raising concerns about potential misuse of public funds. An additional N7.41 billion was allocated for compensation payments over the two-year period, highlighting the financial burden of government projects and the rising costs associated with legal processes.
Breakdown of Estacode Expenditure and Concerns about Justification
A detailed examination of estacode spending reveals a pattern of expenditures across various MDAs for meetings, conferences, and training sessions, both domestically and internationally. Examples include a delegation from the National Human Rights Commission attending a session in Geneva, the Federal Ministry of Special Duties sending officials to a program in Accra, and the Federal Ministry of Finance covering trips to Kigali and Accra. Further instances include the Federal Road Safety Corps attending a conference in Washington D.C., and a substantial allocation for Team Nigeria’s participation in the African Games in Ghana. These expenditures continued throughout the year, with the Ministry of Marine and Blue Economy funding a study tour to London, and the National Agency for Science and Engineering Infrastructure allocating funds for international training programs. Notably, the Ministry of Foreign Affairs disbursed N250 million for high-level international engagements in just two months. Critics argue that while some travel may be necessary, the scale of these expenditures raises questions about their true necessity and alignment with national priorities, especially given the limited capital expenditure compared to recurrent spending.
Compensation Payments and Efforts to Improve Framework
Compensation payments to individuals affected by government projects reached N3.87 billion in 2024, representing a 9.3% increase from the previous year. The Federal Ministry of Power accounted for a significant portion of this spending, primarily for compensation related to transmission expansion and infrastructure projects. These included substantial payments to project-affected persons in Ogun and Lagos states under a Japan International Cooperation Agency-funded initiative. Recognizing the increasing financial burden of these payments, the government allocated funds to review compensation rates and develop a comprehensive Environmental Liability and Compensation Bill. This involved engaging consultancy services for reviewing assessment rates for crops and economic trees, as well as drafting the bill and conducting stakeholder workshops. These efforts aim to improve the framework for compensation assessments and promote environmental accountability.
Consultancy Fees and the Drive for Environmental Accountability
The Federal Government also spent N66.03 million on consultancy services related to reviewing compensation rates and developing the Environmental Liability and Compensation Bill. The Ministry of Works engaged a consulting firm to review compensation rates for crops and economic trees affected by public acquisitions, while the Ministry of Environment allocated funds for drafting the bill and organizing stakeholder workshops. These initiatives demonstrate the government’s efforts to enhance environmental accountability and establish a robust framework for compensation, ensuring fairness and transparency in dealing with project-affected communities. The investment in consultancy services suggests a commitment to improving existing processes and bringing expertise to bear on complex issues related to compensation and environmental liability.
Civil Society Organizations Criticize Spending and Call for Accountability
SERAP and Accountability Lab Nigeria have voiced their concerns regarding the substantial spending on estacodes and compensations, highlighting the potential for misuse of public funds and the lack of clear benefits for Nigerian citizens. SERAP’s Deputy Director criticized the misalignment between government priorities and the economic realities faced by Nigerians, pointing out the significantly higher recurrent expenditure compared to capital expenditure. He questioned the justification for the high amount spent on estacodes, especially considering the country’s large population living in poverty. Accountability Lab Nigeria echoed these concerns, emphasizing the need for greater transparency and accountability in managing public finances. They called for stringent measures to scrutinize public spending, including public disclosure of travel reports and independent audits to ensure compliance with fiscal responsibility laws.
Demand for Transparency and Accountability in Public Spending
The criticism from civil society organizations underscores the growing demand for transparency and accountability in government spending. While acknowledging the potential necessity of some official travel and the importance of compensating project-affected individuals, they argue that the scale of these expenditures warrants closer scrutiny. They emphasize the need for clear justification of all expenses, measurable outcomes, and alignment with national development priorities. The calls for public disclosure of travel reports, independent audits, and sanctions for misuse of funds reflect a broader demand for responsible financial management and greater oversight of public expenditures. This push for accountability aims to ensure that public funds are utilized effectively and for the benefit of all Nigerians, particularly in a context of widespread poverty and pressing development needs.
