The Federal Government released a total sum of N1.23tn to 17 ministries for the implementation of capital projects aimed at advancing development and infrastructure initiatives as of September 30, 2023, reports said.
An analysis of the Budget Implementation Report for the third quarter of 2023 released by the Budget Office revealed this.
Capital projects, in the context of budgeting, typically refer to major investments in physical infrastructure or assets that are expected to provide long-term benefits. These projects usually involve the construction, acquisition, or renovation of tangible assets such as buildings, roads, bridges, dams, schools, hospitals, and other facilities.
The findings revealed that the amount disbursed was 75.4 per cent lower than the N5tn allocated for capital expenditure in the 2023 budget, resulting in a deficit of N3.8tn.
The report also showed that the ministries only utilised N962.87bn out of the cash backing of N1.23tn.
Capital expenditure
The report partly read, “The release of funds to MDAs for capital expenditure as at the third quarter of 2023 was done in tranches based on availability of resources and government priorities. Data from the OAGF on 2023 capital performance for MDAs as of 30th September 2023 showed that a total of N1.23tn was released to MDAs and cash-backed for 2023 capital projects and programmes.
“The sum of N351bn was released as the first Tranche, N331.92bn was the second Tranche and N208bn was the third Tranche. A total of N75.35bn was released as AlEs MDAs Budget and N261bn as AlEs Service Wide.”
It added that a breakdown of the 52 MDAS included in the report of the Office of the Accountant General of the Federation indicated different levels of utilization.
“42 of the MDAs representing (80.77 per cent) had utilized more than the overall average utilization rate of 52.44 percent of the amount cash-backed. 35 out of them had above 65.0 percent utilization rate while only four (7.72 per cent) had one hundred percent utilization level.
“The utilization report also revealed that 10 (18.18 per cent) of the MDAs had below 40 percent utilisation rate of their cash-backed funds. Five (9.10 per cent) of the MDAS had utilization rates of below 20 percent while three (5.45 per cent) were yet to utilize anything from the funds released to them,” it stated.
Allocations
The Ministries of Defence, Works and Agriculture got the highest capital allocations of N189.39bn, N178.62bn and N128.24bn while the Office of the National Security Adviser, Ministry of Environment and Women got of lowest cash backing of N3.93bn, N3.73bn and N5.37bn respectively.
A breakdown showed that the Ministry of Defence got the highest allocation for capital projects with a cash backing of N189.39bn but it only utilised N180.69 leaving a balance of N9.3bn.
This was followed by the Ministry of Works and Housing with a total cash-backed allocation of N178.62bn. It however utilised N118.65bn leaving a balance of N57.97bn.
Expenditures
The agriculture ministry got cash backing of N128.24bn but utilised N109.89bn leaving a balance of N18.35bn.
Other ministries including Water resources utilised N21.81bn out of N28.27bn disbursed, Education only spent N31.35bn out of N54.03bn allocation, Health spent N34.82bn out of its allocation of N55.77bn and Aviation utilised N5.94bn out of a cash backing of N20.44bn.
Similarly, the Ministry of Science, Innovation and Technology spent N12.76bn out of the N44.08bn cash backed for capital projects, Transport spent N43.39bn out of its N56.55bn allocation, the Ministry of Humanitarian Affairs and Disaster Management released N37.13bn for capital projects out of cash backed funding of N53.4bn, the Office of Secretary General of Federation disbursed N14.04bn out of its N17.37bn allocation. Police Affairs Ministry spent N27.42bn out of the N29.79bn released, Labour and Productivity disbursed N6.06bn out of N8.87bn and the Ministry of Interior disbursed N15.66bn out of its allocation of N16.81bn.
Last month, the National Assembly granted a request by the Federal Government to extend the life cycle of the N21.8tn 2023 budget and the N2.17tn supplementary appropriation from June 30 to December 31, 2024.
This was after both chambers extended the implementation period for the capital component of the budget from December 31, 2023, to March 31, 2024, along with the 2023 supplementary budget passed in November 2023 last year.
Although stakeholders including opposition parties faulted the need to run four budgets concurrently, the Spokesman for the President, Bayo Onanuga, said the budget cycle was extended to December to ensure that the capital projects contained in the appropriations were not abandoned.
Defending the elongation of the budget cycle, Onanuga explained, “It is because it (the 2023 supplementary budget) is running simultaneously with the 2023 budget. Some elements of that budget were not implemented. That is why they are moving it forward to be implemented.
“They have already got the provisions meant for them. So, they are trying to make sure they implement them based on the provision of that budget. It means the 2023 and 2024 budget will run concurrently.’’
Meanwhile, the budget office has stated that the majority of projects implemented were constituency projects that are not within the mandate of the MDAs.
It said the practice is disturbing because these projects are prioritised over the projects in line with the mandate of the MDAs.
The report read in part, “Most MDAs’ capital projects are dominated by constituency projects. This practice is disturbing because although most of the projects have no direct bearing with the mandate of the host agencies, they are prioritized over the projects in line with the mandate of the MDAS.”
It further recommended that “Considering the preponderance of constituency projects that are not within the mandate of the MDAs, it is important to emphasise and prioritise only capital projects that are in line with the mandate of the various MDAs during budget preparation and implementation.”
