The cash crunch that gripped the Nigerian economy appears to be
worsening by the day as the Federal Ministry of Finance has failed to
release the second tranche of the N350 billion projected to be part of
its expansive fiscal spending to reflate the economy.
Two months after the first tranche of N280 billion was released to the
Minis-tries, Departments and Agencies (MDAs) to fund ongoing capital
projects, there has been no further injection of funds into the system.
New Telegraph investigations showed that the initial plan of the
government was to release the sum of N350 billion every quarter to
ensure that there were sufficient funds to keep the capital projects
running, but this plan has been thwarted due to dwindling revenue.
Secretary to the Government of the Federation (SGF), Babachir David
Lawal, last week declared that the Federal Government would not be able
to fully implement the N6.06 trillion 2016 budget because the revenues
of the government had dropped by over 50 per cent contrary to
projections.
Apart from the global crash in the price of crude oil, Nigeria’s main
foreign exchange earner, the economic situation has become further
worsened by the activities of the Niger Delta Avengers and other
militant groups who have sustained a campaign of vandalism on strategic
oil installations, thereby impeding oil exploration and production in
the region.
New Telegraph reliably gathered that the non-release of funds was
having a devastating impact on the MDAs, as they are barely able to pay
salaries while every other obligation, particularly execution of capital
projects, has been put on hold.
The implication is that in the Ministry of Power, Works and Housing,
capital projects worth N422.96 billion have been stalled due to lack of
funds. This stagnation has affected over 40 projects for the
construction of roads and bridges valued at N132.4 billion, N9.2 billion
worth of power projects and N35.6 billion worth of projects meant for
the construction of 1,973 blocks of 7,068 housing units in the six
geo-political zones and the Federal Capital Territory.
In the Ministry of Transportation, five railway projects valued at
N150 billion has also been stalled while capital projects valued at
N5.42 billion have been brought to a halt in the Ministry of Agriculture
and Rural Development. Similarly, capital projects valued at N13.9
billion and N3.2 billion have been stalled in the Ministries of Health
and Education respectively.
New Telegraph learnt from reliable sources that the MDAs are
currently frustrated and are even scared of advertising for jobs because
they know there are no funds to execute them. “The reality is that this
government may find it difficult to initiate the process of executing
any project this year.
Even the earlier pledge that they want to focus on ongoing projects
they inherited might still not be feasible because there is no work
going on now. Apart from the poor revenue accruing to government,
another problem is that the release of funds is also regimented.
The Ministry of Finance cannot even release quarterly allocation to
MDAs as it used to do in the years past because it is President
Muhammadu Buhari who decides what is to be released, to which sector and
at what point,” a source said.
New Telegraph also learnt that the transfer of the Budget Office from
the Ministry of Finance to the National Planning Commission is also
taking its toll on budget implementation.Under the civil service
procedures, our source said, the management of the budget remained a
function of the Ministry of Finance, but this government took it away
and subsumed it in another entity.
According to our source, the only thing left with the Minister of
Finance is the authority to issue warrants for the release of funds to
MDAs and the funds are not flowing anymore. A survey conducted by New
Telegraph across the MDAs showed a general lull in activities and a
mixed bag of frustration, uncertainty and cautious hope.
A senior accountant working with one of the Federal Medical Centres
in North Central said no single dime had been released to his agency in
the name of executing capital projects. “As I speak to you now, no cash
backing for capital projects yet. Even the recurrent side, it’s only
salary that we are paying on monthly basis.
The other aspect, which is overhead cost like training, is zero,” he
said. At Pension Transitional Arrangement Directorate (PTAD), a senior
officer, who sought for anonymity, said his agency had pushed out
tenders inviting prospective suppliers to submit tenders for supplies. ”
As recent as last Friday, we still advertised for supplies. If there
was no hope for fund, I doubt if the management could ask that tenders
for supplies be put out there,” he said. Effort to get update from the
Ministry of Finance and the Ministry of Budget and National Planning met
brick walls.
However, Minister of Power, Works and Housing, Mr. Babatunde Fashola,
disclosed that sequel to the initial release of funds by the Federal
Government to finance on-going capital projects across the country,
contractors on Federal Highways have gone back to construction site.
Fashola made this known while delivering a keynote address on the
Expected Role of Insurance in Infrastructural Development in Nigeria;
organised by the Insurance Industry Consultative Council, to mark the
2016 annual National Insurance Conference in Abuja.
New Telegraph sighted a letter dated July 8, and addressed to the
Director, Federal Highways (South- West), Federal Ministry of Power,
Works and Housing, Mabushi, Abuja, which was in respect of the
rehabilitation of the Lagos/ Ibadan Dual Carriage Way II
(Sagamu-Ibadan).
The letter, signed by one Engr. O.N Olubakinde stated that the level
of completion of the project stood at 27.6 per cent while the percentage
time lapse was 75 per cent as at June 2016. As part of efforts by the
government to explore new means of boosting revenue for funding 2016
budget, the Federal Ministry of Finance, last week, organised a national
retreat on revenue generation.
The two-day retreat, which held in Kano, saw the Minister of Finance,
Mrs. Kemi Adeosun, interacting with experts on revenue generation and
administration in a bid to chart the way forward for Nigeria. Chief
Executives of various government revenue- generating agencies, Directors
of Accounts and Audit, as well as revenue officers in MDAs participated
at the retreat where they shared their experiences and articulated new
strategies on boosting revenue generation and prudent application of
such resources to finance the implementation of various development
projects.
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