FG Releases ₦1.2 Trillion for Capital Spending across 17 Ministries

The Nigerian Government released ₦1.23tn to 17 ministries for the execution of capital projects in the third quarter of 2023.

According to the Budget Implementation Report for Q3, 2023 released by the Budget Office on Sunday, 75.4 percent lower than the ₦5trn allocated for capital expenditure in the 2023 budget, resulted in a deficit of ₦3.8tn.

The fund was aimed at advancing development and infrastructure initiatives as of September 30, 2023.

Capital projects are major investments in physical infrastructure or assets that are expected to provide long-term benefits.

These projects usually involve the construction, acquisition, or renovation of tangible assets such as buildings, roads, bridges, dams, schools, hospitals, and other facilities.

The report also showed that the ministries only utilised ₦962.87bn out of the cash backing of ₦1.23tn.

The report partly read, “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.

“The sum of ₦351bn was released as the first Tranche, ₦331.92bn was the second Tranche and ₦208bn was the third Tranche. A total of ₦75.35bn was released as AlEs MDAs Budget and ₦261bn as AlEs Service Wide.”

It added that a breakdown of the 52 MDAS included in the report of the Office of the Accountant General of the Federation indicated different levels of utilisation.

“42 of the MDAs representing (80.77 percent) had utilised more than the overall average utilisation rate of 52.44 percent of the amount cash-backed. 35 out of them had above 65.0 percent utilisation rate while only four (7.72 percent) had one hundred percent utilisation level.

“The utilization report also revealed that 10 (18.18 percent) of the MDAs had below 40 percent utilisation rate of their cash-backed funds. Five (9.10 percent) of the MDAS had utilisation rates of below 20 percent while three (5.45 percent) were yet to utilise anything from the funds released to them,” it stated.

The Ministries of Defence, Works and Agriculture got the highest capital allocations of ₦189.39bn, ₦178.62bn, and N128.24bn while the Office of the National Security Adviser, Ministry of Environment and Women got of lowest cash backing of ₦3.93bn, ₦3.73bn and ₦5.37bn respectively.

A breakdown showed that the Ministry of Defence got the highest allocation for capital projects with a cash backing of ₦189.39bn but it only utilized ₦180.69 leaving a balance of ₦9.3bn.

This was followed by the Ministry of Works and Housing with a total cash-backed allocation of ₦178.62bn. It however utilized ₦118.65bn leaving a balance of ₦57.97bn.

The agriculture ministry got cash backing of ₦128.24bn but utilized ₦109.89bn leaving a balance of ₦18.35bn.

Other ministries including Water resources utilized ₦21.81bn out of ₦28.27bn disbursed, Education only spent ₦31.35bn out of ₦54.03bn allocation, Health spent ₦34.82bn out of its allocation of ₦55.77bn and Aviation utilized ₦5.94bn out of a cash backing of ₦20.44bn.

Similarly, the Ministry of Science, Innovation and Technology spent ₦12.76bn out of the ₦44.08bn cash backed for capital projects,

Transport spent ₦43.39bn out of its ₦56.55bn allocation, the Ministry of Humanitarian Affairs and Disaster Management released ₦37.13bn for capital projects out of cash-backed funding of ₦53.4bn, the Office of Secretary General of Federation disbursed 14.04bn out of its ₦17.37bn allocation.

Police Affairs Ministry spent ₦27.42bn out of the ₦29.79bn released, Labour and Productivity disbursed ₦6.06bn out of ₦8.87bn and the Ministry of Interior disbursed ₦15.66bn out of its allocation of ₦16.81bn.

The budget office has stated that the majority of projects implemented were constituency projects that were not within the mandate of the MDAs.

It said the practice is disturbing because these projects are prioritised over the projects in line with the mandate of the MDAs.

The report read in part, “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 further recommended that ‘Considering the preponderance of constituency projects that are not within the mandate of the MDAs, it is important to emphasise and prioritise only capital projects that are in line with the mandate of the various MDAs during budget preparation and implementation.”