The Federal Government on Tuesday said its Ministries, Departments and Agencies had been asked to roll over between 50 and 60 per cent of their capital projects to the next fiscal year.
The government also said it had so far released the sum of N340bn for capital projects from the 2017 Appropriation Act in addition to the N1.2tn released between January and June this year from the 2016 capital budget.
It also said the N100bn from the recent sukuk bond subscription would be used to fund capital projects, while it planned to increase releases for capital projects in the budget to N440bn by next week.
It also announced that revenue amounting to N2.305tn was generated in the first half of this year from the projected N2.542tn revenue for the period, indicating a shortfall of nine per cent.
The Federal Government had projected N5.084tn revenue in the 2017 budget.
These were made known when a Federal Government team, comprising the Minister of Finance, Mrs. Kemi Adeosun; Minister of Budget and National Planning, Senator Udo Udoma; Minister of State for Budget and National Planning, Mrs. Zainab Ahmed; and the Director-General, Budget Office of the Federation, Dr. Ben Akabueze, briefed the joint Senate Committee on Appropriation and Finance on the implementation of the 2017 Appropriation Act in Abuja on Tuesday.
The team urged the National Assembly to fast-track the process and approval of requests for external borrowings, which would be used to fund the capital budget.
Udoma, in his presentation, said, “In order to go back to January to December as the fiscal year, this particular year will be very short. You will not expect us to disburse N2.1tn in such a short time; the procurement processes will not even allow it.
“So, we have told the MDAs to roll over 50 to 60 per cent of their projects; the projects will not be lost.”
He, however, allayed the fear of the lawmakers, who noted that the proposal might have an adverse effect as it would almost eliminate a budget year.
“Yes, for the transition, there will be issues, but we should bite the bullet and solve the problem once and for all,” the minister stated.
Udoma dismissed insinuations that the government had not released substantial money for the capital budget.
He said, “I want to clarify something; there was a general sense that since January, we have not released much in terms of capital budget; that is not the case. Between January and June, we still had the 2016 budget in operation and we allowed it to flow unhindered. Under the 2016 appropriation, we released over N1.2tn for capital, and most in the course of this year.
“It is partly because of those releases that we are out of recession, because we realised the need to reflate he economy. Our intention was to reflate the economy. The economy is moving in the right direction.”
The minister stated that there would be more releases before the end of this year, adding, “By the time we release N100bn this week, we would have spent N440.9bn on capital projects.”
Udoma explained that some of the revenue collected in 2017 was used to implement the 2016 budget, adding, “Revenue is better than last year but not enough; so, we need to borrow and we have been borrowing.”
He added that the N2.3tn deficit in the 2017 budget, mostly in the capital component, could only be funded by foreign borrowing.
“It is urgent that we get all the approvals from the National Assembly,” Udoma said.
The minister also announced that Nigeria’s oil output was currently at two million barrels per day.
Udoma also canvassed for the support of the lawmakers in the restoration of the fiscal year to January to December in order to provide for an organic budget calendar.
He said the current administration had the plan to create a January-to-December calendar for the fiscal year.
“We have been working in trying to get the 2018 budget to you this month. We intend to have discussions with you so that we can finalise that and take it to the Federal Executive Council, so that we restore ourselves to January and December to make it much easier to report on the performance of budgets,” Udoma told the lawmakers.
He stressed that the Executive was ready to work with the Legislature to ensure the submission of the budget in October and its passage before the end of the year.
In her presentation, Adeosun said the revenue figures had improved compared to a similar period in 2016, while providing the breakdown of releases for the non-capital component of the budget.
She said, “Cumulative release on current expenditure is N1.5tn. We are fully on course in terms of salaries’ releases; statutory transfers are N128.8bn; redemption fund for pensions is N37.8bn; overheads, N92.4bn; service-wide vote is N223.6bn; capital expenditure is N340.9bn; and we successfully raised N100bn to be released this week.
“At the end of this week, we would have released about N440.9bn on capital budget for 2017.”
Adeosun added, “We had a rollover from 2016 to the 2017 budget. There was no stoppage in terms of capital spending. Projects simply continued. The way in which we allocated the fund and the prioritisation was according to the objectives of the Economy Recovery and Growth Plan.
“We were focused on project completion; we prioritised projects that were nearer to completion and that were critical in the first releases of capital.”
Adeosun, while responding to a question on why the Federal Government could not pay salaries promptly, blamed it on illegal recruitments, attributing some of the salary shortfalls in government MDAs to a number of illegal activities.
She lamented that many agencies embarked on recruitments without approval from the authorities, including the Budget Office, adding that some agencies replaced retiring officers with multiple personnel.
The minister explained that before now, only a handful of MDAs were engaged in illegal recruitments and the payment of illegal allowances, most of which were not captured in the budget.
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