N350b To Be Released To capital projects in this year’s budget
UP to N350 billion will be released in the first tranche for capital projects in this year’s budget, Minister of Finance Mrs. Kemi Adeosun said yesterday.
At the presentation of the 2017 Appropriation Act in Abuja, the minister said the Federal Government had enough cash for the execution of key projects and initiatives this fiscal year.
“We are ready, we are having a cash-plan meeting very soon and after that, N350 billion will be released as first tranche of capital releases for the 2017 budget,’’ she said.
Minister of Budget and National Planning Senator Udoma Udo Udoma said the funding of projects would now be on Project-Based Release System to curb waste of public funds by Ministries, Departments and Agencies (MDAs).
He said part of the requirements for capital releases was evidence of compliance with the Bureau of Public Procurement (BPP) Act.
Udoma said MDAs were no longer authorised to enter into a foreign denominated contract without the approval of the Ministers of Budget and National Planning, and Finance.
The government, he said, would strengthen its monitoring and evaluation framework to improve physical inspection and impact assessment of projects and programmes implemented by MDAs.
“We are worried and concerned about the number of abandoned capital projects scattered in their thousands throughout the country, which we inherited from previous administrations.
“We know that you can’t continue doing things the same way and expect different results, so we have to do things differently. We need to have more targeted releases. We have to look at the projects which are important and can easily be completed.
“The ministers are working together to ensure that over time, we concentrate our resources on completing important projects, so that we have maximum impact,’’ he said.
The minister said his ministry was working with the National Assembly to get the country’s fiscal year adjusted to between January and December.
This, he said, could only be achieved when the executive and legislature worked together to ensure that the budget was submitted, passed and signed before December 31, 2017.
The government, he said, would use a fraction of the looted funds recovered so far to finance part of the budget.
He said the total revenue projected was N5.08 trillion, with 11 per cent coming from the recoveries made. “On recoveries, we are being extremely conservative; what is in the budget is what we know about already. “So if more comes, we will use it.
“Know that recoveries of looted funds are not the most dependable way to finance the budget because of the legal processes that have to be concluded before it can be spent.
“So, the money quoted in the budget is the one we have already recovered and which is in our pocket to spend as we wish.”
The minister said the total revenue projected exceeded last year’s projection by 30.26 per cent, adding that oil revenue projection was put at 41.7 per cent compared to 19 per cent in 2016.
Udoma added that the high revenue expectation from oil was driven by Joint Venture Calls (JVC) cost reduction, higher production and price, exchange rate as well as additional oil-related revenues.
According to him, Company Income Tax (CIT) will contribute 15.9 per cent, Value Added Tax (VAT), 4.8 per cent, Independent Revenue, 15.9 per cent and others, 5.2 per cent.
The projected budget deficit which stood at N2.36 trillion, he said, remained relatively low at 2.18 per cent of the Gross Domestic Product (GDP).
“This is within the 3 per cent threshold stipulated in the Fiscal Responsibility Act (FRA).
“The budget is to be financed mainly by borrowings which have been projected at N2.32 trillion.
“Of this amount, N1.07 trillion is intended to be sourced externally, while N1.25 trillion will be sourced domestically.”
About N35 billion, the minister said, was expected as revenue from the sale of government property and privatisation of state-owned enterprises.
To generate the projected revenue, he said, the Federal Inland Revenue Service (FIRS) and Customs had been challenged to improve their efficiency and broaden their reach to achieve the budget’s set targets.
He said the government would strive to maximise the revenues it could generate from the oil and gas sector because the foreign exchange generated from the sector was critical to plans to diversify to the non-oil sectors.
“It is important that we use what we have to get what we need and want and what we have is oil. It is important that we make sure there is peace in the Niger Delta so that we can achieve the maximum from that resource,” he said.
Statistics given by the minister showed that N1.88 trillion, which was 63 per cent of the recurrent expenditure component of the budget, would be spent on personnel cost and N281.1 billion, representing 9.4 per cent, would be spent on pension.
This shows that a total of N2.16 trillion would be spent on salaries and pension alone.
Other aspect of the recurrent expenditure framework includes Overheads, N219.84 billion and N138.7 billion, for Service-wide Votes.
Also, the government plans to spend N76.7 billion on the Presidential Amnesty Programme; the running cost of the special intervention programme is expected to gulp N350 billion.
Udoma said the government plans to spend N40 billion as refund to special accounts.
He failed, however, to mention names of the accounts and the purpose intended.
“We have to manage our recurrent expenditure and at the same time, we cannot afford to have any retrenchment. Consequently, we must meet our personnel expenses. We have to make sure we provide adequately for salaries and pensions. For other items of expenditure such as overheads, we will only meet those components that are vital and others will be managed down because it is very important that we find the resources to meet our capital expenditure,’’ he said.
Director-General, Budget Office of the Federation Mr Ben Akabueze said his office had introduced a new system known as Citizen Portal.
According to him, the portal which can be found on the budget office website, provides the masses insights into the 2017 budget in a non-technical way.
“It is important for citizens to understand the budget, especially its key deliverables and their role in its implementation. When citizens do not fully understand the budget, it significantly limits their ability to engage with the budget process and hold government accountable for the prudent management of financial resources entrusted to it,’’ he said.
Acting President Yemi Osinbajo signed the N7.44 trillion budget into law on June 12, a month after it was passed by the National Assembly.
Referred to as the “Budget of Recovery”, the N7.30 trillion proposal was presented on December 14, last year, to the National Assembly by President Muhammadu Buhari.
The lawmakers, however, increased it by N143 billion.