The Federal Government allocated N1.23tn to 17 ministries for capital projects as of September 30, 2023.
According to The PUNCH, this information emerged from the third quarter Budget Implementation Report for 2023 released by the Budget Office.
Capital projects generally refer to major investments in physical infrastructure or assets, expected to yield long-term benefits.
These projects usually involve the construction, acquisition, or renovation of tangible assets like buildings, roads, bridges, dams, schools, hospitals, and other facilities.
The findings indicated that the disbursed amount was 75.4% lower than the N5tn allocated for capital expenditure in the 2023 budget, leading to a deficit of N3.8tn. Additionally, the ministries only utilized N962.87bn out of the N1.23tn that was cash-backed.
The report stated, “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.”
It further detailed, “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.”
A breakdown of the 52 MDAs included in the report from the Office of the Accountant General of the Federation showed varying levels of fund 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.
The Ministries of Defence, Works, and Agriculture received the highest capital allocations of N189.39bn, N178.62bn, and N128.24bn respectively, while the Office of the National Security Adviser, Ministry of Environment, and Ministry of Women Affairs received the lowest cash backing of N3.93bn, N3.73bn, and N5.37bn respectively.
The Ministry of Defence received the highest allocation for capital projects with N189.39bn, utilizing N180.69bn and leaving a balance of N9.3bn.
The Ministry of Works and Housing followed, with a total cash-backed allocation of N178.62bn, of which N118.65bn was utilized, leaving a balance of N57.97bn.
Other ministries such as Water Resources utilized N21.81bn out of N28.27bn disbursed; Education spent N31.35bn out of N54.03bn allocated; Health used N34.82bn out of its N55.77bn allocation; and Aviation utilized N5.94bn out of N20.44bn.
Also, the Ministry of Science, Innovation, and Technology spent N12.76bn out of N44.08bn; Transport spent N43.39bn out of N56.55bn; the Ministry of Humanitarian Affairs and Disaster Management disbursed N37.13bn out of N53.4bn; the Office of Secretary General of the Federation utilized N14.04bn out of N17.37bn allocated; Police Affairs Ministry spent N27.42bn out of N29.79bn; Labour and Productivity disbursed N6.06bn out of N8.87bn; and the Ministry of Interior disbursed N15.66bn out of N16.81bn.
In June, the National Assembly approved the Federal Government’s request 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 decision followed the extension of the capital component of the budget from December 31, 2023, to March 31, 2024, alongside the 2023 supplementary budget passed in November last year.
Despite criticism from opposition parties regarding the concurrent running of four budgets, Presidential Spokesman Bayo Onanuga told The PUNCH that the budget cycle extension to December was to ensure the completion of capital projects contained in the appropriations.
Onanuga elaborated, “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.’’
The budget office noted that the majority of projects executed were constituency projects not aligned with the MDAs’ mandates. It described this as a disturbing practice because these projects were prioritized over those in line with the MDAs’ mandates.
The report stated, “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 recommended emphasizing and prioritizing capital projects that align with the MDAs’ mandates during budget preparation and implementation, considering the prevalence of constituency projects outside the MDAs’ scope.
