Of Reps and 2017 budget performance

In this piece, Segun Olatunji and Kolawole Daniel put to fore, issues surrounding the 2017 capital budget performance and releases of funds by the key manager of the economy.

 

Year 2017 is almost over and furore over implementation of 2017 appropriation act especially the capital component of the budget overtime pitched the executive and the legislature at loggerheads.

On yearly basis the recurrent expenditure always perform 100 percent, while the capital component of the budget usually perform dismally. The outgoing year is not an exception.

However, criticism on the 2017 capital budget started during debate on 2018 budget which passed second reading in the House of Representatives recently.

Aside the poor implemation and perharps underfunding of the 2017 capital component of the budget, lawmakers are also not happy with the implementation of zonal intervention projects in 2017 appropriation.  It will be recalled that 2017 ‘Budget of Recovery and Growth’ has a total amount of N7.4 trillion (N7, 441, 175, 486, 758) with N2.2 trillion (N2, 177, 866, 775, 864) for capital projects; N100 billion was allocated as zonal intervention projects of lawmakers with the sole aim of bringing federal presence to various constituencies and states across the federation.

Though the various committees of the House are expected to start engaging various ministries, departments and agencies, MDAs on budget performance in their various MDAs as well as showing cause why they merit what was allocated to them in the 2018 budget estimates.

A member of the House, Honourable Denis Agbo specifically raised concern over non implementation of zonal intervention projects by the executive in the 2017 budget. According to him, the constituency projects had direct impact on the lives of the more than 170 million Nigerians, across the states of the federation.

An angry Honourable Agbo posited while debating the budget performance said that  “Of the entire capital allocation, zonal intervention project is just about 3.4 percent of capital expenditure, and I see no reason why government will not implement it’’.

The Chairman House Committee on Agriculture, Honourable Mohammed Monguno was not left out in criticising budget performance of 2017 Appropriation Act thereby calling on the House as a responsible arm of the legislature to take the bull by the horn in demanding adequate implementation of budgets.

Another lawmaker from All Progressives Congress, APC in Niger, Honourable Abubakar Adamu berated the executive arm for poor implementation of the 2017 budget, lamenting that the government had been reduced to providing boreholes without sustainable development. He said:  “We need to have a nation where we should have the capital expenditure going up to 70 percent, while the recurrent expenditure should be coming to 30 percent”. Consequently, he spoke of the need for government to up the ante as far as budget implementation is concern.

Poor implementation of budget especially the capital component has always been linked with the level of infrastructure decay in the county as well as underdevelopment of critical sector of the country.

At a meeting with House Joint committee on Finance, Aid, debts and loans and Appropriation, Minister of State, Budget and National Planning, Mrs Zainab Ahmed while addressing the panel disclosed that the Federal Government has achieved the capital budget performance of 47 percent in 2017, with couple of days to end the year, she also claimed that it was government hope to achieve 50 percent before the end of the year.

On what was responsible for the low performance of the budget, she hinged the low performance on low remittances of independent revenue by generating agencies, noting that, “We expect it to increase to at least 50percent before the end of the year”. She then urged the National Assembly to impress it on the revenue generating agencies to make adequate remittances.

According to her, “Independent revenue has continued to lag behind with low level of remittances” adding that,” the GDP growth rate planned for 2017 was 1.7percent and at the end of first quarter, we have achieved 1.4percent, giving a positive indication that we will attain the 1.7 percent target and possibly surpass”.

Speaking on Federal Government release of funds for capital projects in 2017, Minister of Finance, Mrs Kemi Adeosun had stated that the  government previously released the sum of N450 billion for capital projects, adding that with the additional N750 billion, a total sum of N1.2 trillion would have been invested in infrastructure projects.

Justifying government’s effort, she said, “Last year we released N1.3 trillion of capital and so far this year we have released N450 billion and this week we will release another N750 billion and this will take the release to N1.2 trillion by the end of the year.”

However, budget performace as related to Ministry of Transportation in a position paper presented on budget performance, capital component by the Minister, Mr Rotimi Amaechi, showed that the  ministry achieved only 16.5 percent performance. The document further showed that out of the N192.895 billion appropriated for the ministry for capital expenditure, only N31.932 billion was released, representing 16.5 per cent of the appropriated sum. While out of the released N31.932 billion, only N20.862 billion had been cash backed.

The Speaker, Honourable Yakubu Dogara, it will be recalled had while delivering a vote of thanks after President Muhammadu Buhari presented the 2017 Appropriation Bill of N7.3 trillion to the joint session of the National Assembly said that low implementation of budgets in the past had led to high rate of project abandonment across the country.

According to the Speaker, “it is certainly frustrating that we go through the annual budget cycle without unlocking the full potential of our citizens, saying that, “This is because implementation and execution of the agreed budget is always a major challenge year in year out.”

To buttress his point, he said that, “Sometimes, implementation rate is as low as 30 per cent; most times, it is never higher than 50 per cent at the best of times. This has led to unacceptably high rate of abandonment of projects and distortions in Nigeria’s economic planning.”

To address the trend, he had advised that Appropriation Act must be allowed to run for an uninterrupted 12 months, for the Executive to have enough time to execute it.

Speaking in the same vein during presentation of 2018 budget Honourable Dogara, had urged President Buhari not to totally abandon the 2017 budget, adding that its fiscal targets must be enforced and provisions complied with as authorised by the Legislature.

The Speaker was quick to say: “Mr President, as legislators, what agitates us is the prospects of totally abandoning the 2017 Budget and the dire consequences of doing so.

“The questions that must be answered include whether we have effectively enforced 2017 fiscal targets and whether managers have complied with the budget as authorised by the legislature.

“Our experience with the implementation of the 2016 budget amply demonstrates that obeying our Appropriation Laws maximises the release of our potentials while violating the Appropriation Laws caps the release of our national potentials.

“This means that we have to redouble our efforts in implementing the 2017 Budget, if we must retire it in January or at the very least rollover most of the projects in 2017 budget to 2018. No need to remind us that fiscal indiscipline is as grievous as corruption which this government is busy eliminating.”, the Speaker noted.

Now that, the 2018 budget of N8.6 trillion is before the National Assembly one will hope that the lawmakers with their oversight power ensure that budget implementation is taking seriously with the MDAs for the betterment of the country.