Posted by Hamisu Muhammad | 13 August 2018 | 1,137 times
The implementation of the capital component of the 2018 budget is yet to start due to lack of funds, nearly two months after the signing of the Appropriation Act by President Muhammadu Buhari, Daily Trust investigations reveal.
The 2018 budget has a total deficit of N1.95 trillion, equivalent to 67 per cent of the total N2.87trillion capital expenditure for the year.
The Minister of Budget and National Planning, Udoma Udo Udoma, had, while presenting the details of the budget, said the deficit is to be financed mainly by borrowing of N1.643 trillion both from external and internal sources.
The government will borrow N793 billion from the domestic sources and N849 billion from foreign sources.
However, the borrowing plan of the federal government is yet to be approved by the National Assembly which embarked on a two-month recess last month.
A presidency official said the borrowing plan has been sent to the National Assembly before their recess, but a ranking member of the House of Representatives said he was not aware.
Experts fear that the face-off between the leadership of the Legislature and the Executive may likely affect the smooth passage of the supplementary budget request and the approval of the borrowing plan.
Government sources said both new and old projects have to slow down, even as the completion deadlines for some have to be altered in the absence of the borrowing plan which is the key source of the funding for the projects.
Some projects facing delay
Some of the major infrastructure projects that may be affected by the delay in implementation of the budget are Kano-Maiduguri road N10bn; rehabilitation of Zaria-Funtua-Gusau-Sokoto-Birnin Kebbi (ongoing) N704million; outstanding portion of dualisation of Odukpani-Itu, Itu-Ikot Ekpene: lot 2. Itu-Ikot Ekpene (ongoing) N11.1 billion; rehabilitation of Enugu-Port Harcourt dual carriageway section II: Umuahia-Aba in Abia State (ongoing) N3.7 billion.
Others are rehabilitation and expansion of Abuja-Kaduna-Zaria Kano three-lane dual carriageway (ongoing) N22.3 billion; Dualisation of Ibadan-Ilorin Section II in Oyo State (ongoing) N2.8billion; Construction of Bodo-Bonny road with a bridge across the Opobo channel in Rivers State (ongoing), N8.7 billion and several other railways project under the ministry of transport.
FAAC revenue only pays salaries
Analysis by Daily Trust indicated that the revenue to the federal government is not enough to settle the recurrent (non-debt) expenditure of government. The recurrent – salaries of workers, pension, overheads, special intervention programme and Presidential Amnesty Programme – will gulp the sum of N3.512 billion (N292 billion on monthly average). The total Federation Account Allocation Committee (FAAC) disbursement to the FG for the second quarter was N844 billion or N281billion on average. This is about N11 billion short compared to the expenditure projection within the same period.
Slowdown may trigger another recession
There are fears of decline of the economy if the slow implementation of the budget persists. Experts said one of the consequences of poor budget spending is the decline in the GDP growth.
The Monetary Policy Committee of the Central Bank of Nigeria (CBN), at its July meeting, welcomed the positive economic growth in the Q1of the year, but observed that the recovery was still fragile and called for the speedy implementation of the 2018 Federal government Budget and the Economic Recovery and Growth Plan (ERGP) to strengthen output growth in the Nigerian economy.
• Excerpted from a Daily Trust report
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