NOT long ago, the Minister of Finance, Mrs. Kemi Adeosun, acknowledged that only 21 percent of the capital component of the 2017 budget was implemented. This implementation level is the lowest the country has recorded in about five years. The lacklustre execution of this budget has serious implications. As a matter of fact, the poor implementation of our budgets has been the bane of infrastructural development in the country.
Beyond the faithful execution of national budgets, however, is the percentage of the capital component of the budget that goes into the development of infrastructure such as roads, bridges, hospitals and power plants. A civic organisation, BudgIT, underscored this problem last week with its allegation that 42 percent of the capital allocations in this year’s Appropriation Bill have no direct impact on Nigerians. In the words of the organisation known for monitoring government’s expenditure, there is currently the “masking of several opaque administrative items as capital projects just to shore up the percentage of capital component in the 2018 Budget.”
The organisation based its claim on the outcome of its analysis of the budget proposals which showed that a total of N744.48bn (or 42 percent) of the N2.65 trillion capital allocations will go into administrative items. These include the procurement of cars, retrofitting of government offices, trainings, payments to consultants, purchase of furniture and computers, among other items. The group argues that given that the funds earmarked for capital expenditure would be borrowed as proposed in the 2018 Budget by President Muhammadu Buhari, “it is disheartening to discover that most line items therein show a great disconnect from the developmental goals of government as stated in its Economic Recovery and Growth Plan (ERGP) which was unveiled early last year.”
Besides, the BudgIT report lamented that in a pre-election year, Nigerians had expected that capital projects with direct impact on the larger population would get more of the capital allocations for the year, but that does not seem to be the case. According to the report, only 26 percent of capital allocations to the Ministries of Health, Education, Agriculture, Transportation, Works, Power and Housing, Niger Delta, Water Resources, Science & Technology, are trackable. Altogether, the report blamed government for not coming out to clearly explain how it spent the allocations to capital items in the 2016 and 2017 financial years.
Overall, the issues raised by BudgIT are weighty and should be properly looked into. The slew of revelations in the report as it relates to the capital component of the 2018 Budget is a matter the National Assembly should investigate, especially now that debates on the budget are about to commence. Even now, the poor implementation of the capital projects in previous budgets explains why critical infrastructure like roads, railways, bridges, power plants and hospitals, among others, never get completed, in spite of the huge amounts allocated to them.
The capital votes in the 2018 Budget should not be disproportionately allocated to depreciating assets such as furniture, cars, computers and retrofitting of government offices. Although some of these items may come under capital overheads, they are not as important and impactful as the building of critical infrastructure like roads, bridges, power plants, hospitals and the like, which will have greater impact on the economy and the well-being of the people.
The observation by BudgIT should help our budget planners to re-order their priorities. Indeed, the commitment of 42 percent of the allocations for capital projects to administrative items smacks of corruption. Over the years, the implementation of the capital component of our budgets has been lamentable. Statistics show an average implementation of 22 percent in the last ten years.
Last year, for instance, the implementation of the capital projects in the 2017 Budget recorded a deficit of N1.7trn against the sum of N2.18trn budgeted. This highlights the need for greater transparency and accountability. It also points to the fact that something is manifestly wrong with our fiscal administration that has repeatedly failed to ensure the timely release of funds for the implementation of capital projects.
It is only when government prioritises capital projects and dutifully and sincerely implements the capital components of the budget that the country can achieve its infrastructural development goals, ensure sustainable economic development and improve the welfare of the citizens. So far, government is far from achieving its promise of 70:30 ratio for capital and recurrent expenditures in our federal budgets.