The persistent lack of capacity in government Ministries, Departments and Agencies (MDAs) means that the implementation of the 2016 budget is suffering a serial setback. The budget is estimated at N6.06 trillion.
Implementation of the already delayed Nigeria’s 2016 budget could suffer a setback as executing Ministries, Departments and Agencies (MDAs) of government, like in previous administrations, seem to lack the capacity to execute even the projects that they submitted in the N6.06 trillion estimates.
The government said in March it will reflate the economy with an initial injection of about N350 billion of the capital budget to kick-start the troubled economy, with a focus on infrastructure projects including roads, the rail, and airports as it planned to boost economic activities and save jobs.
Finance minister, Kemi Adeosun, had said the money will help offset the debt owed contractors, who had laid off their workers for lack of funds.
But BusinessDay gathered that most MDAs were yet to complete the procurement process which should prepare them to access disbursements and that the situation was currently affecting the ability of government to release part of the N350 billion initial capital to them.
Consequently, the federal government has, in a memo seen by Businessday, given the affected MDAs August deadline to complete the procurement process or be severely sanctioned.
“Government wants to disburse these funds as quickly as possible but most of the MDAs are not even ready with the projects to be funded,” said a reliable presidency source to BusinessDay.
There are also worries around the implementation of the 2016 budget which is being shrouded in secrecy as Nigerian authorities have also not been able to disclose the exact amount that has been disbursed so far from the N350 billion initially announced by government.
The Federal Executive Council, Wednesday, was silent on funds due to be released for capital projects after more than a month Adeosun announced that N350 billion would be injected to revive an economy on the brink of a recession.
However, FEC urged government Ministries, Departments and Agencies (MDAs) to fast-track processes for the release of the 2016 capital budget.
Minister of Budget and National Planning, Udoma Udoma, briefing journalists alongside the minister of information and culture, Lai Mohammed, after the meeting which was chaired by Vice President Yemi Osinbajo, insisted that the releases were on-going, but said Nigerians would only begin to see the impact by the third quarter of the year.
“The focus of our deliberations at the FEC meeting today was the review of the economy which we do from time to time. On a quarterly basis, the Ministry of Budget and National Planning briefs cabinet about the economy and the steps that we need to take and Council approved that the various MDAs should fast-track the processes for the capital budgets so that the economy can be quickly reflated.
“As for the N350 billion which was indicated, the money is available but there is a process and this is part of the reasons we briefed council and there is a need to fast-track those processes so that very soon most of those monies will be released. We expect that, in the ministry of works, they should have substantial release in the next week or so,” Udoma confirmed.
Asked the amount of releases made so far, the minister said “you will be seeing a lot more releases. I’m sure within the week we should be able to give you numbers.”
On recession as hinted by the Central Bank of Nigeria (CBN) and the retrenchment in the banking sector, the minister said it did not come as a surprise as government already had a plan to reflate the economy.
“We have a plan and the plan is to reflate the economy. What has happened to Nigeria is not a surprise to the government; it is something that we came in to meet; it has been caused by the fall of crude oil prices from over $100 to less than $30 and so we came in to meet that problem.
“The decision that we took to address that problem is to reflate the economy and the budget was aimed to achieve that and that is why you have in the budget a plan to spend a large amount of money on infrastructure but as you know the budget was only recently passed. It takes time for the spending to be released and to hit the economy and to begin to see the impact. So we have a plan, we know the situation we are in right now and we have a plan to get out of it.
“It is just that, at this particular point in time, we expected this trajectory because the releases will only start kicking in so that by the third quarter we will start seeing the impact of what we are doing to reflate the economy”.
Explaining further why government was appealing to the private sector, especially the banking sector to retain sacking their staff, Udoma said this was because by the time the economy picked up, they would need more hands. “We know the economy is going to pick up; we are confident about that; that is because of our plan, the plan was conceived because we knew that this was the trajectory we will move into.” he said.
He also denied insinuations that government intends to lay off staff in military organisations.
ONYINYE NWACHUKWU & ELIZABETH ARCHIBONG
