Looks to funding of projects from Sukuk proceeds
Ndubuisi Francis and Chineme Okafor in Abuja
There are indications that the federal government may be having difficulties funding the capital component of the N7.44 trillion 2017 Budget as none of the ministries, departments and agencies (MDAs) could confirm to THISDAY as at Monday, the release of any capital vote to them, three months after the appropriation bill was assented to by Vice-President Yemi Osinbajo, who was then acting president. The budget with a capital vote of N2.36 trillion, which was passed by the National Assembly on May 9, 2017, was assented to by Osinbajo on June 12, 2017.
At the public presentation of the budget in Abuja on June 19, 2017, the Minister of Finance, Mrs. Kemi Adeosun, had assured Nigerians that funds were at the disposal of the government to immediately release N350 billion for capital projects.
However, THISDAY investigations have cast some doubt not only on government’s promise to release the funds as soon as the budget was signed but also its capacity to fund the entire capital vote.
About three months after the budget was signed into law, efforts by THISDAY in the last two months to confirm the release of the N350 billion and other possible releases had met a brick wall.
Neither the officials of the Ministry of Finance nor the Office of the Accountant General of the Federation (OAGF) have been forthcoming with information.
Some top officials of the Ministry of Finance, who were contacted to provide information on whether or not the N350 billion had been released, referred our inquiries to the Office of the Accountant-General of the Federation and the Ministry of Budget and National Planning.
Efforts to make an inroad into the OAGF also fell flat as the Director, Public Affairs in the Office, Mrs. Kene Offie, neither responded to calls nor a text message.
Although the Ministry of Finance is saddled with the task of ensuring the release of funds for budget implementation, nonetheless, THISDAY still made attempts to see if the Budget and National Planning Ministry could be of any help in terms of providing information on capital releases/budget implementation generally.
An official of that ministry, who was contacted, expressed the obvious, adding that the release of budgeted funds was the prerogative of the Ministry of Finance.
He advised THISDAY to seek the needed information from the finance ministry.
Indications are that the federal government may be finding it difficult not only to fund capital projects but some recurrent line items, especially overhead.
The Statistician-General of the Federation, Dr. Yemi Kale, disclosed recently that the delay in the release of the second quarter Gross Domestic Product (GDP) figures was due to the paucity of funds.
The delay, he noted, put the statistical agency in some financial constraints to embark on the mobilisation of the necessary data for second quarter GDP figures, which came almost two months late.
To further lend credence to government’s not-too-cosy financial position to fund the capital budget, THISDAY’s request for details of the capital release so far to the Ministry of Power, Works and Housing was repeatedly evaded by Mr. Hakeem Bello, the Senior Special Assistant on Communications to the minister, Mr. Babatunde Fashola.
On several occasions, Bello explained away the delay in responding to the inquiries.
But there were pointers to the fact that the government was exploring alternative sources of funding for capital projects, as Fashola at a meeting with contractors who were complaining about paucity of funds to execute their contracts noted: “Sukuk is coming. If it is fully subscribed, at least, in 25 major roads, we will have some interventions.”
The N100 billion sovereign Sukuk bonds recently issued by the government is promising to pay subscribers of Sukuk risk-free rental income of 16.47 per annum.
Some major capital expenditure allocations in the 2017 Budget are N553.71 billion for Power, Works and Housing; N241.71 billion for Transportation; N150 billion for Special Intervention Programmes; N139.29 billion for Defence; N104.24 billion for Water Resources; N81.73 billion for Industry, Trade and Investment; N63.76 billion for Interior; N151.91 billion for Education (including Universal Basic Education Commission); N55.61 billion for Health; and, N103.79 billion for Agriculture.