FG Yet To Release Capital Votes In 14 Months

President Muhammadu Buhari

The Federal Government has not released funds for the execution of capital projects since the second quarter of 2014. The development, it was learnt, had been hampering the execution of government’s projects across the country. Of course, it was also said to be responsible for the biting hardship in the country. But the Presidency on Tuesday said it would not release capital votes until the government’s revenue generation improved.

The Special Adviser to the President on Media and Publicity, Mr. Femi Adesina, told one of our correspondents that capital votes had not been released since the second quarter of 2014, meaning that in all, there had been no release of budgeted capital votes for 14 months.

The Punch reports:

Adesina said the implication was that the administration of former President Goodluck Jonathan did not release capital votes for three quarters while the present administration had not released for one quarter.

He was however hopeful that the present administration would release the capital votes of at least one quarter this month “once the nation’s revenue increases.”

The President’s spokesman said, “Since the second quarter of last year, capital votes have not been paid. This means that the out-gone administration did not pay for three quarters.

“We are however hopeful that revenue normally goes up mid-year. If revenue goes up this month, the government will pay for at least one quarter.”

The 2015 budget is targeting gross federally-collectible revenue of N9.78tn to be shared by the three tiers of government.

The figure, when spread over a 12-month period, translates into monthly revenue of N815bn or N2.44tn per quarter.

But figures obtained from the Federal Ministry of Finance revealed that between January and May, 2015, the country had only been able to generate the sum of N1.74tn as gross revenue.

When the actual N1.74tn revenue is compared to the budgeted target of N4.07tn that should have been earned within the five months period, it translates into a revenue shortfall of 42.5 per cent.

A breakdown of the actual revenue revealed that the sum of N416.04bn was generated in January and N401.46bn in February while the months of March, April and May had N315.04bn, N282.06bn and N324.96bn respectively.

It was gathered that following the non-release of capital votes, there was uncertainty in the Ministry of Finance over the policy direction of the administration of Buhari.

The seventh Senate had passed the 2015 budget on April 28, 2015, following the passage of the same bill by the House of Representatives on April 23, with an expenditure outlay of N4.493tn, up from the N4.425tn proposed by the Executive.

Former President Goodluck Jonathan had signed the bill into law few days before he handed over power to Buhari.

The Senate, in passing the budget, slightly reduced the N2.607,601, 000,300 proposed by the Executive to N2.607,132,491,708 as recurrent expenditure and simultaneously scaled down the capital expenditure from N642,848,999,699 estimated in the proposal to N556,995,465,449.

The budget is being driven by $53 per barrel oil benchmark, an exchange rate of N190 to the US dollar; 2.2782 million per barrel crude oil production per day; and a deficit Gross Domestic Product of 1.12 per cent.

The document also put fiscal deficit at N1.075tn; N953bn for debt service; and N375.6bn as statutory transfers.

Education takes the lion’s share of the budget with N392.3bn; followed by the military, which gets N338.7bn while police commands and formations will receive N303.8bn.

In the same vein, N237bn was voted for the health sector; N153bn for the Ministry of Interior while N25.1bn was budgeted for the Ministry of Works.

But our correspondent learnt that unlike in previous years when the first and second quarter capital budget implementation reports would have been prepared by July ending; such reports could not be worked on by scheduled officers in the Budget Monitoring and Evaluation Department in the ministry of finance.

A senior official in the Ministry of Finance said the budget implementation report could not be prepared due to paucity of funds to implement projects scattered across the federation.

The official, who spoke on condition of anonymity because he was not officially permitted to do so, said since funds were not released for project execution, there was no way the BME officials could go for field monitoring of budget execution.

The source said, “Government business has been slow since the past three months and it’s largely due to the absence of a cabinet.

“You know that the Federal Executive Council is the highest policy making organ of the government and it is made up of ministers, who have the power to approve contracts.

“The ministers have yet to be appointed and as we speak now, no amount has been released by the finance ministry for capital projects. The money that is being released now is just for payment of salaries.

“The scheduled officers are even confused on what to do because nobody is certain about the economic blueprint of the new government.”

When contacted, the Director, International Economic Relations, Ministry of Finance, Alhaji Mohammed Haruna, said he had no information about the non-release of capital votes in the budget.

Haruna, who is the Acting Permanent Secretary in the Ministry of Finance, said, “Specifically, I am not in the Budget Office, although the Budget Office is under the finance ministry, you need to speak to them about the reason for the non-release of funds for capital projects.”

The spokesman for the Budget Office could not be reached for comments as calls made to his number did not connect as of the time of filling this report. Also, a text message sent to him on the issue had yet to be replied.

But the Lead Director, Centre for Social Justice, Eze Onyekwere, said there was a need for the administration of President Muhammadu Buhari to carry out a review of the 2015 federal budget in line with current economic realities.

He stated that the fiscal document, in its current form, could not address the challenges facing the economy as many of the expenditure heads contained in the document were unknown to the constitution.

Eze faulted the template usually sent to Ministries, Departments and Agencies of government for being responsible for the bloated expenditure of government as well as its difficult implementation.

He said, “The 2015 federal budget as passed by the National Assembly is not the budget of change that Nigerians have been waiting for.

“It needs to be reengineered, restructured and overhauled. A dire economic situation needs some adjustments and reforms, or else the country will not just stagnate, it will enter the reverse gear.

“We still had a lot of votes for welfare packages after the salaries and perks of office of the staff had been voted. This is an expenditure head unknown to our law.

“Many agencies still got outrageous sums for refreshment and catering services as if they are running a restaurant chain. It made no sense as it was wasteful.”