The Minister of Finance, Mr Wale Edun and his Budget and Economic Planning, Senator Abubakar Bagudu, Wednesday gave reasons for the 25% implementation of the 2024 capital budget.
The Minister of Finance had in his submission before the joint committee, said so far, 2024 budget performance was 43% with recurrent expenditure achieving 100% while capital budget only managed 25% performance.
He confirmed that they have outstanding capital releases awaiting funding, regretting that the country cannot go back on the old ways of spending money that is not there to avoid backlash as happened in France and Germany of recent, adding that there are warrants awaiting payment for capital projects.
Also throwing light on the issue, the Minister of Budget and Economic Planning, Senator Abubakar Bagudu, said the huge recurrent expenditure in our budgets is a function of our level of development and some of the societal challenges we are facing at this moment, adding that some of the recurrent goes into the campaign of the military against insecurity which is yielding results to spur agricultural production and economic activities.
The director general of Budget Office, Dr. Tanimu Yakubu, also attributed the huge recurrent expenditure to past legacies inherited by President Bola Ahmed Tinubu in areas like unpaid pensions and gratuities which the administration has successfully addressed, adding that in the future, there may be need for legislation by the National Assembly to limit the size of recurrent expenditure in the budget.
The National Assembly had Wednesday frowned at 25% implementation of capital component of 2024 budget which has just five months left for execution.
The life span of the capital component of the 2024 budget was in December last year extended from March 31st 2025 to June 30th 2025.
But members of the National Assembly Joint Committee on Appropriations were surprised that despite the extension and with just five months left, only 25% has been achieved due to non – release of funds for capital project execution.
The committee headed by Senator Solomon Adeola and Hon. Abubakar Birchi, expressed serious concern on low funding of the capital budget for 2024 at a special session held with the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun and the Minister of Budget and Economic Planning, Senator Atiku Bagudu.
The committee directed the presidential economic team to do something urgent on release more funds for capital projects as according to them, it is the major way for the people to feel the impact of government away from recurrent expenditure which affects only a negligible part of the population.
Senator Adeola said he is an advocate of drastically reducing the ratio of recurrent expenditure to capital in the budget from the present level of about 80% for recurrent and 20% for capital to at least 60% to 40%, adding that capital projects in the budget and their implementation is a major spur for economic growth and direct impact on the people.
“Capital releases to MDAs are the major drivers of economic activities within the nation.
“Non-release of funds for capital projects is a major issue in the performance of 2024 budget so far and it is desirable that funds are released to prevent abandoned projects and ensure the success of the Renewed Hope Agenda of the president,” he said .
He added that it will not be cheery news for MDAs to come for their 2025 budget defense with record of non-performance of their core mandates as contained in capital budget stressing that within the period of the 2024 budget still running, effort should be made by finance ministry to release funds for capital projects.
In his own remarks, the chairman, House of Representatives Committee on Appropriations, Hon. Birchi, called for more releases for capital projects of MDAs for such projects as schools, roads, dams, hospitals and other social infrastructure instead of such items as debt repayment which he argued can be restructured in the interim.
“Most of the items of recurrent expenditure which takes a huge part of our budget and is implemented 100% will only directly affect about 10% of our population while capital projects of the MDAs will directly affect majority of over 200 million Nigerians in areas of social infrastructure provisions like hospitals, schools, roads and energy,” he stated.
The meeting which had in attendance the Minister of State for Finance, Dr, Doris Uzoka-Anite, and the permanent secretaries of Ministries of Finance and Ministry of Budget and National Planning also deliberated on the issues of waivers and tax holidays which seems to reduce revenues for the government.