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By 'Seun Ibukun-Oni, Abuja
DAILY COURIER - The envelope system of funding Nigeria's annual budget has come under sharp criticism from lawmakers, who have described it as a flawed and anti-democratic process that hampers the country’s economic planning and development.
The concerns were raised on Thursday as the Senate Appropriations Committee began receiving reports from various committees on the 2025 budget. The lawmakers argued that the envelope system—a practice where ministries, departments, and agencies (MDAs) are given pre-determined budget limits—prevents effective needs-based resource allocation and hinders long-term development planning.
Senate Committee Decries Systemic Challenges
The Senate Committee on Appropriations, during its deliberations, called for the federal government to discontinue the envelope system. The committee described the approach as outdated and insufficient to address Nigeria’s growing economic challenges, urging a shift to a more dynamic and needs-driven budgeting model.
A member of the committee remarked, “The envelope system is a constraint on the nation's economic progress. It prioritises administrative convenience over developmental goals, and that must change if we are to address the pressing needs of Nigerians.”
Capital Market Committee Rejects IST Budget
The criticisms extended beyond the budgetary system to specific proposals, as the Senate Committee on Capital Market outrightly rejected the 2025 budget proposal presented by the Investments and Securities Tribunal (IST).
Senator Osita Izunaso, who chaired the budget defense session, highlighted discrepancies and errors in the IST's proposal, leading to its rejection. A motion moved by Senator Seriake Dickson (PDP-Bayelsa) and seconded by Senator Aliyu Wadada (SDP-Nasarawa) directed IST Chairman Amos Azi to reappear before the committee with a revised and accurate budget on Friday.
Explaining the decision, Senator Izunaso said, “Budget presentations should reflect diligence and accuracy. This is a sensitive matter that affects the credibility of our economic institutions.”
The IST Chairman, Amos Azi, apologised for the discrepancies, attributing the errors to oversight. He assured the committee of a corrected budget proposal by the deadline.
The Way Forward
The lawmakers’ criticism of the envelope system reflects growing calls for a reform of Nigeria’s budgeting process. Experts have long argued that the rigid system limits the government’s ability to respond to emerging priorities, including infrastructural development, social welfare, and security challenges.
The rejection of the IST’s proposal also underscores the Senate’s increasing scrutiny of budget submissions, signaling an emphasis on accountability and accuracy. With the Appropriations Committee still reviewing reports, it remains to be seen how the criticisms will influence the final budget’s structure and allocation process.
This development is expected to spark broader debates about fiscal transparency and efficiency, as stakeholders push for reforms to align Nigeria’s budgeting system with international best practices.
The lawmakers’ stance on the envelope system highlights a critical flaw in Nigeria’s fiscal policy framework. By advocating for a needs-based budgeting process, the Senate is calling attention to the inefficiencies that have long plagued national economic planning.
Meanwhile, the rejection of the IST’s error-laden proposal sends a strong message about the importance of precision and accountability in public finance management. Together, these actions indicate a growing resolve by lawmakers to prioritise fiscal discipline and national development over bureaucratic expediency.
