A

SEMINAR PAPER
ON

MILITARY BUDGET AND EXPENDITURE

BY

RH0DES TAVERSHIMA AAN

MATRIC NO: POS/MSc/PhD/20/002
DEPARTMENT OF POLITICAL SCIENCE
FACULTY OF SOCIAL SCIENCES
UNIVERSITY OF CALABAR
CALABAR

SUBMITTED TO

ASSOC. PROF. ENO IWARA (COURSE LECTURER)

DEPARTMENT OF POLITICAL SCIENCE
FACULTY OF SOCIAL SCIENCES
UNIVERSITY OF CALABAR
CALABAR

IN PATIAL FULFILMENT OF THE COURSE REQUIREMENTS:

DEFENCE ECONOMY (POLS 842)
APRIL 2023

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 TABLE OF CONTENTS

BACKGROUND
MILITARY BUDGET OF NIGERIA
MILITARY EXPENDITURE OF NIGERIA
RELATIONSHIP BETWEEN MILITARY BUDGET AND EXPENDITURE OF NIGERIA
CONCLUSION
RECOMMENDATION
REFERENCES

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BACKGROUND
About a year ago, 25th April, 2022, Stockholm International Peace Research
Institute (SIPRI) said the world military expenditure reached an all-time high of
$2.1 trillion. The SIPRI report went further to mention the countries that were
considered to be the largest military spenders in year 2021 to include the United
States (US), China, India, Russia and the United Kingdom (UK). It also concluded
that these five countries put together accounted for 62 percent of the global
military expenditure that year. In the same year, Nigeria’s military budget also hit
a record high of $4.47B, one of the highest in Sub-Saharan Africa. The scholarly
question here is; why would a country spend more on the military during a global
pandemic of COVID-19, when international activities apparently lockdown? But
this underscores the nexus of military spending and general economy of countries
already studied by scholars like Rothschild, Benoit, Frederickson, looney, Deger,
etc. – that military spending takes a toll on the total gross domestic product
(GDP) of a country.
Military Expenditures are always preceded by Military Budgets. According
to SIPRI, Military Expenditures are “all government spending on current military
forces and activities, including salaries and benefits, operational expenses, arms
and equipment purchases, military construction, research and development, and
central administration, command and support.” While Military Budget is a detail
allotment of funds to be spent on all that are listed above within a stipulated
time. These concepts are often used synonymously – that is to mean they are the
same, by all ramifications. But this is only suitable for countries who have very
high level of defence budget implementation transparency. Other countries,
especially the developing ones, the figures in the military budget do not always
correspond with actual expenditure for that year. The reason for this difference in
some of the countries may not necessary be a function of budget deficit but sadly
misappropriation of the funds therein.
A publication of Transparent International UK (TI) in 2011, under its
Defense and Security Programme, classified defense budget implementation
status into five categories; such as, high transparency, moderate to high
transparency, moderate transparency, moderate to low transparency and low
transparency. A careful scrutiny of the countries grouped under these categories
shows that the ranking criterial was not limited to accountability in

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implementation only but it also considered the effectiveness of budget
information disclosure. This assumption was strengthened by the TI report which
explained that “Defence budget transparency is not limited to the disclosure of
information, but also involves the establishment of an effective and robust system
of legislative oversight and control of spending.” How military budgets fare is
becoming important because, as Rourke (1997) stated, “the more of a country’s
wealth that is devoted to military spending, the less is available for private use
and for domestic government spending.”
Similarly, some defence economists are now questioning the impact of
military budget and expenditure on a country’s gross domestic product (GDP),
which is the sum of all the goods and services produced by such a country. Others
are concerned with the effect of military spending on a country’s export and
overall economic growth, while some still want to know if it affects a country’s
average propensity to save or it has any productivity (Bassey and Dokubo, 2011),
especially, in developing countries like Nigeria.
Therefore, this seminar paper will try to apply these findings in the
understanding of the Nigerian military budget and expenditure situation. This is
even with the low defence budget transparency that the country has. Surprisingly,
Ghana, Nigeria’s only ex-British colony neighbor, has a high defence budget
transparency ranking, after South Africa that is ranked highest in Africa. The
Nigerian defence budgeting started since 1960, and has reached the current high
estimates through a journey of over 60years.

MILITARY BUDGET OF NIGERIA

“Nigeria has seen a dramatic increase in its defence spending in recent
years but analysts say it has yet to make a dent in insecurity”. That is the
resounding opening remark of Godsgift Onyedinefu of his piece titled “Nigeria’s
spend on defence rises but security elusive” published in Business Day online on
23rd January, 2023. This shows how difficult and elusive the military budgeting
journey has been so far for the country. From the lowest figure of $0.02B, which

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represented 0.70% of Nigeria’s GDP in 1960, to $4.47B in 2021, which was 0.97%
of its GDP. The Nigerian budget data history presented by Macrotrends indicated
a steady climb in the budget amount over the period (1960-2021), with some
years witnessing averagely marginal declines in the trend. For example, in 2019,
the budget value reduced to $1.86B from $2.04B in 2018 which represented a
decline of 8.95%. Following Jeff Schmidt’s (2023) “The Four Main Types of
Budgets and Budgeting Methods”, and the assertion of Onyedinefu above, one is
tempted to conclude that Nigeria has always being using “Incremental Budgeting”
Method all this while instead of the “Value Proposition Budgeting” Method that
best suits the country’s peculiar security situation.
According to Eloranta (2005), financing military exertions in most societies
since the ancient river valley civilizations have been a crucial problem of
governance, even in the medieval times. Therefore, the implementation of any
military budget is often referred to as a military burden. Thus, if this burden is not
managed properly, it will definitely throw up some economic challenges for a
country. Media reports has inundated the public that Nigeria has been increasing
her military budget to raise its military power and in turn improve its national
security. For the same reason, in 2016, the rose to $1.72B, however, it declined to
$1.62B in 2017. In 2018, it rose again to $2.04B, posting a 26.02% increment that
reduced by 8.95% as the figure came to $1.86B in 2019. But the budget rose again
to $2.4B in 2020, and subsequently skyrocketed by 56% to $4.47B in 2021.
Despite the whooping amount of $19.9B Nigeria budgeted for defence and
security between 2016 and 2022, the military burden the country carries are yet
to yield the desired target of harnessing its military proficiency and national
security architecture as the its global security rating is still low and not
encouraging. That is, armed criminality rates of terrorists, bandits, Fulani Militia,
Niger Delta militants, separatist groups and other local militias are still
traumatizing the citizenry.

MILITARY EXPENDITURES OF NIGERIA

According to Macrotrends (2020-2023), North Atlantic Treaty Organization
(NATO), also called the North Atlantic Alliance, defined military expenditures to
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include all current and capital expenditures on the armed forces, including
peacekeeping forces; defence ministries and other government agencies engaged
in defence projects; paramilitary forces, if these are judged to be trained and
equipped for military operations; and military space activities. Military
expenditures are dynamic as they respond to emerging and top priority security
issues that needs being taken care of. In developed countries, military spendings
are very high but always accounted for. A Punch Newspaper Editorial, published
18th January, 2023, and titled “Huge Military Spending Yielding No Result”, posited
that “in the US, the military budget pays the salaries, training, and health care of
uniformed and civilian personnel, maintains arms, equipment and facilities are
allocated to the Department of Defence (DoD). Every amount spent by the DoD
including the recent security assistance for Ukraine worth $15.8B, is accounted
for and the allocations are approved by the US Congress”.
In answering the academic question of why a country would increase its
military budget and expenditure at the height of a COVID-19 pandemic and
international lockdown, a SIPRI report of 25th April, 2022, asserted that the world
military spending generally continued to rise in 2021, reaching an all-time record
high of $2.1T, and this represented a seventh consecutive year increase in the
expenditure which was only 2.2% of the world GDP. For US, who is the highest
military spending country, they justified their huge expenditure of $801B in 2021
with their large investment in Military Research and Development which had
risen by 24% between 2021 and 2022 and a reduce a spending on arms
procurement by 6.4% within the same period, among other adjustments in their
military burden to further consolidate its status as a formidable world power.
However, Nigeria, a third world and developing country, cannot justify its
huge military expenditure of $19.9B squandered between 2016 and 2021, even as
it has been dubbed the highest military spending in the sub-Saharan African
region. As a matter of emphasis, the country’s military spending rose by 56% to
$4.47B in 2021 in response to numerous security challenges such as violent
extremism in the north and separatist insurgencies in the east and west regions of
the country. But all these national security problems still subsist till now (SIPRI
report, 2022). The reason for this abysmal performance of the Nigerian military
budget system cannot be far from what a security expert, Timothy Avele,
described it as “a lack of proper implementation and monitoring of the funds” of

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the budget, while other analysts of the budget since 2016 blamed it on the
allocation to recurrent expenditure which always outweighs capital expenditure
that cater for the procurement of military hardware and platforms with other
military infrastructures.
The above notwithstanding, the Nigerian government, from time to time,
would augment these yearly budgets with auxiliary budgets and additional
allocations basically to purchase the same military hardware. In 2018, the
government approved the withdrawal of $1B from the Federation’s Excess Crude
Account and also a supplementary budget of N982.72B in 2021 with and
additional responsibility of handling the COVID-19 pandemic effect in the country.
So, according to Onyedinefu, the Nigerian military can only boast of the following
procurements so far:
i. 12 Tucano Jet Fighters at $496M;
ii. 12 AH-1Z Cobra Attack Helicopters at about $1B;
iii. Some JF-17 Thunder Aircrafts;
iv. Some Unmanned Combat Aerial Vehicles (UAVs);
v. 2 CASA-295 Medium Airlift Aircrafts;
vi. 2 Beechcraft King Air 360s;
vii. 4 Diamond DA-62 Surveillance Aircrafts;
viii. 3 Wing Loong II UCAVs;
ix. 6 T-129 ATAK Helicopters;
x. 2 Augusta 109 Trekker Multi-Role Helicopters;
xi. 24 M-346 Attack Aircrafts;
xii. 3 Magnus MF 212 Surveillance Aircrafts;
xiii. 3 Bell UH 1D Helicopters;
xiv. Some Ocea3X32 Fast Patrol Boats; and
xv. Some other military weapons /Arms and ammunition
The revelations and prosecution of some persons trailing these procurements
has rather smeared them with controversies. In 2021, when the debate on why
the military weapons were not seen despite the huge monies spent, the National
Security Adviser (NSA), Babagana Monguno, declared that the funds meant for
the procurement of arms and ammunition under the past service chiefs were
unaccounted for but later watered his statement down by say some of these
military equipment ordered had not been delivered. While in 2022, Bolaji

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Owasanoye, the Chairman of Independent Corrupt Practices and Other Related
Offences Commission (ICPC), revealed that an ex-military chief stole N4B from the
military budget by diverting it to two companies, where he is the sole signatory.
He also collaborated the revelation by the Centre for Democracy and
Development that about $15B has been spent through fraudulent arms
procurement deals in the last 20years in the country. These and other cases of
corruption and misappropriation of military budget funds against several ex-
military leaders are the reason why Transparency International has given the
country a low military budget transparency ranking.

RELATION BETWEEN MILITARY BUDGET AND EXPENDITURE OF NIGERIA

GKTODAY, an online journal published on 23 rd November,2015, outlined the
principles of budget preparation and implementation to be; the principle of
Annuality, Rule of Lapse, Fiscal Discipline, Inclusiveness, Accuracy and
Transparency and Accountability. Similarly, the Organisation of Economic
Cooperation and Development (OECD) journal published “Principles of Budgetary
Governance” in July, 2014 which collaborated those of GKTODAY. But worthy of
note for the purpose of this seminar are the following excepts from the OECD
publication:
a. Budgets should present a comprehensive, accurate and reliable account of
public finances – As a contract of trust between citizens and state, it is
expected that the document should account comprehensively and correctly
for all expenditures and revenues of the national government, and that no
figures should be omitted or hidden (although limited restrictions may
apply for certain national security or other legitimate purposes).
b. The integrity and quality of budgetary forecasts, fiscal plans and budgetary
implementation should be promoted through rigorous quality assurance
including independent audit.
However, it is clear more now that Nigeria, one of the 37 member countries of
OECD, has not been giving due regards to the principles of military budget
implementation, rather there are some indicators that have exposed the
country’s abuse of them.

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 For example, due to the permitted but limited restrictions that allows
certain national security funding to remain secret, huge sums of monies from
military budget are being diverted to carter for other questionable “government
functions” with political colorations. According to Punch Newspaper Editorial of
18th January, 2023: a former Chief of Army Staff, Kenneth Minimah with two other
generals were charged to court for allegedly misappropriating N13B meant for the
purchase of arms; another former military officer, Hakeem Otiki, was found guilty
of corruption charges which included theft of public property and diversion of
military operational funds; a former Chief of Air Staff, late Alex Badeh, was also
prosecuted for diverting N3.9B military funds; while a former NSA, Sambo Dasuki,
was arraigned for allegedly diverting a whooping $2.1B arms procurement money
to fund the 2015 election for a particular political party.
These and other case scenarios already mentioned in this paper, are
enough to establish that only a negative correlation exist between the Nigerian
Military Budget and the actual Expenditures. This explains why the country stills
enjoys abysmal ratings by international security and governance watchdogs such
as; Global Terrorism Index (GTI), Global Peace Index (GPI), Hostage International
(HI), Transparency International (TI), National Security Tracker (NST), World Bank,
etc., as compared to its contemporaries like Ghana, Egypt, South Africa, and why
the country is still under siege from Salafist terrorist elements, Banditry, Fulani
Militia Herdsmen, Separatist gunmen and other armed criminalities. Despite the
huge military burden Nigeria, as compared to its contemporaries, its Military
Industrial Complex (MIC) is nothing to write home about even as the Defence
Industry of Nigeria (DICON) in Kaduna has retrogressed to making furniture, while
the country depends heavily on importation of even military gears/uniforms and
hardware. Meanwhile, Egypt has developed its MIC to an extent that it could be
accused recently of secretly supplying weapons to Russia to execute her infamous
invasion of Ukraine.

CONCLUSION
At this juncture, it will be appropriate if this paper is concluded with the
following assertions:

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  That, the ever-increasing Military Budget of Nigeria do not represent the
actual military expenditures on ground, including arms procurement and
personnel welfare, largely due to a widespread corruption and lack of
transparency in its yearly implementation; and
 That, the above notwithstanding, the prevailing huge military burden has
negatively affected the country’s GDP and other aspect of the economy,
even if it was on a marginal basis.
On whether it has any effect on the countries propensity to save, the Federation
Account Allocation Committee’s declaration in July 2022, that the balance of
Nigeria’s Excess Crude Account had reduced significantly partly due to the
procurement of military equipment, suffices.
That, Nigeria has a bad culture of disregarding most of the military budget
implementation principles is a fact compared to some of its contemporaries in the
developed world. But this is not the way to go for a country facing a myriad of
sophisticated armed criminality and is in a grave need to improve its military
capabilities and MIC to tackle headlong these national security issues as well as
other national territorial defence challenges.

RECOMMENDATION
To say Nigeria must change its tact in the handling of the country’s military
budgeting processes is a belated but belaboured suggestion. However, some
attempts will be done here to put the suggestion more differently. First, the
National Assembly should establish an efficient audit framework to always probe
arms procurement and utilization of funds from the military budget to checkmate
any irregularity that may undermine the full benefits of the budget. This will also
frustrate the antics of corrupted government officials and military officers that
connive to divert security funds by making them accountable for every kobo
allocated for that sector.
Secondly, Nigeria needs to peer review itself with fellow member countries
of OECD to improve her regard for the principles of military budget preparation
and implementation to change the culture of misappropriation and corruption in
the ranks of the military. This will promote transparency and accountability in
military budgeting and military procurement processes by pushing for a regular
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and effective oversight functions from the Ministry of Finance and Federal Budget
Office as well as the Public Accounts Committees of the National Assembly.
Lastly, conscious effort must be done to strengthen the country’s judicial
system to be able to prosecute effectively those found wanting in the discharge of
their duties in the military budgeting and its implementation processes. This will
also ensure that the guilty are given punishment which is commiserate to their
offences to serve as a deterrence to others and not the usual plea bargain
arrangement that leave culprits with lesser punishment and encourage the vicious
circle of ineffective military budgeting.

REFERENCES
1. “Military Expenditure Reaches Record Level in the Second Year of the
Pandemic”- A Press Release by Stockholm International Peace Research
Institute (SIPRI), 25th April, 2023. Access at https://www.sipri.org, on
11/04/2023, 23:31pm
2. “The Transparency of National Defence Budgets” - A Publication of
Transparency International UK – Defence and Security Programme, 32-36
Loman Street, London, UK. October, 2011.
3. Rourke, John T. (1997). International Politics on the World Stage.
Dushkin/McGraw-Hill, USA. Pg. 7
4. Bassey, C. O., and Dokubo, C. Q. (2011). Defence Policy of Nigeria:
Capability and Context - A Reader. AuthorHouse, 1663 Liberty Drive
Bloomington, USA. Pg. 210-218
5. “Military Spending by Country”. Accessed at
https://wisevoter.com/country-rankings/millitary-spending-by-country, on
11/04/2023, 23:50pm
6. Onyedinefu, Godsgifts (23rd January, 2023). “Nigeria’s Spend on Defence
Rises but Security Elusive”. Article Published in the Business Day online at
https://businessday.ng/business-economy/article. Accessed on
13/04/2023, 23:43pm
7. Babatunde-Lawal, Ajumoke (20th May,2022). “Increasing Nigeria’s Defence
Budget to Improve Security”. Article Published in the Business Day online at
https://businessday.ng/research-post/article/. Accessed on 25/04/2023,
09:30am

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 8. “Huge Military Spending Yielding No Result”. An Editorial by the Editorial
Board of Punch Newspaper. Published online at https://punchng.com on
18th January, 2023. Accessed 25/04/2023, 09:37am
9. Eloranta, Jari. “Military Spending Patterns in History”. EH.Net Encyclopedia,
edited by Robert Whaples. 16th September, 2005 for Economic History
Association. Accessed at http://eh.net/encyclopedia/military-spending-
patterns-in-history/, on 13/04/2023, 23:40pm
10. “Military Spending by Country 2023”. World Population Review 2023.
Accessed at
https://www.worldpopulationreview.com/country-rankings/military-
spending-by-country on 11/04/2023, 23:48pm
11.“Nigeria Military Spending/Defence Budget 1960-2023”. Macrotrends.
Accessed at https://www.macrotrends.net/countries/NGA/nigeria/, on
11/04/2023, 23:46pm
12.“Principles of Budgeting”. An online Publication of GKToday, 15 th
November, 2015. Accessed at https://www.gktoday.in/topic/principles-of-
budgeting/ on 29/04/2023, 01:56am
13.“The Principles of Budgetary Governance”. A Draft Recommendation of the
OECD Council. Organisation of Economic Cooperation and Development
(OECD), Paris, July, 2014. Accessed at
http://www.oecd.org/governance/budgeting/

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