CBN, Finance Ministry advised on capital funds disbursement

Under the Treasury Single Account (TSA), both the Central Bank of Nigeria (CBN) and the Ministry of Finance have critical roles to play in capital funds disbursement. Timelines for the disbursement of capital releases should be defined for relevant officers in the Ministries, Departments and Agencies (MDAs) and such information be made public.

This call was made  at a two-day workshop for business editors and members of Finance Correspondents Association of Nigeria (FICAN) under the theme: “The Nigerian Banking Sector: Challenges, Opportunities and the Way Forward,” organised by the Nigeria Deposit Insurance Corporation (NDIC) in Kano.

“The season of muddling through problems by throwing money at them should be over. The Economic Recovery and Growth Plan (ERGP’s) ‘New Approach’ stands it in the GAP between the old ways of solving developmental problems and the required change that takes us to our desired destination.

“In other words, the season of critical thinking, meticulous scientific planning and sound management implementation are here and has become imperative for successful outcomes of policy and programme implementation,” Ode Ojowu, former chief economic adviser to former president Olusegun Obasanjo, stated in his presentation at the workshop.

On the theme, “Insulating ERGP from the political storm,” Ojowu  suggested the following strategies for insulating the implementation of the ERGP from electoral politics: “Set up ERGP Situation Room to oversee the implementation of the ERGP during campaign period. It is recommended that the Situation Room be composed of Ministries of Agriculture; Industry, Trade and Investment; Budget and National Planning; CBN; Finance; Power Works and Housing; representatives of the private sector, especially the contractors, with technical support from NBS and development partners.

“They should be responsible for designing a mechanism for aggressive monitoring of the implementation of the ERGP priority projects, track capital releases to ensure early disbursement to contractors and other target beneficiaries. Under the current bureaucracy, it is a tedious exercise to get the disbursed funds to beneficiaries long after their release by the Ministry of Finance. “

He stated that contractors’ complaints desk should be set up in the situation room to deal especially with delayed fund disbursements. “In the immediate, a spot check on the extent of disbursement of the N450 billion released for the 2017 capital project, could confirm the need for contractors’ complaints desk,” the economist noted.

Ojowu also suggested protection of the budget allocations to priority sectors, stressing that capital provisions should be rolled over rather than be recalled at the end of the fiscal year. This roll-over practice is already on with regards to 2016 and 2017 capital projects, but it needs to be formalised with a buy-in from the National Assembly.

“Encourage preparation of state-level ERGPs, take practical steps to make states prepare their own ERGP by use of incentives like the bail out and CBN’s Anchor programme,” Ojowu further advised.