Work on capital projects by the Ministries, Departments and Agencies has continued to remain grounded two months after the 2019 Budget was signed into law. The MDAs are currently in a capital dilemma that is affecting implementation of their projects.
Cash-strapped: The Ministries, Departments and Agencies are currently cash-strapped and are unable to fund capital projects because President Muhammadu Buhari is yet to release funds to commence work, and this will cause delay in execution of projects, most especially the critical ones which take priority.
The N8.91 trillion budget was passed by the National Assembly (NASS) in April 2019 and signed by President Buhari in May 2019, six months after the President presented the Appropriation Bill to a combine legislative house in December 2018.
The budget contains capital expenditure of N2.09 trillion, recurrent expenditure of N4.07 trillion, statutory transfers of N502 billion, fiscal deficit of N1.92 trillion and special intervention of N500 billion.
Reasons for delay of funding: According to a report, the delay is caused by:
- the procurement process;
- the non-constitution of a cabinet; and
- the low approval limit of Permanent Secretaries.
“You will recall that the budget was signed over a month ago by the President and as was expected, funding of projects particularly those that are critical to the developmental objectives of the government ought to have started.
However, this has not been the case, because MDAs have yet to get their funding for the implementation of capital projects.
Part of the reasons could be that the cabinet members have not been appointed and this is crucial to the release of funds for MDAs.” The reported quoted a government official.”
History repeating itself: The delay in releasing needed capital will hinder the MDAs from moving forward with on-going projects and begin new initiative. This same path was taken in 2015 during President Buhari’s first tenure.
The President had delayed the release of his ministerial list and this affected the Ministries, Departments and Agencies. It took him six months to form his cabinet. This delay was trailed by criticism from opposition parties and Nigerians.
Recall that the country went into recession a year after (August 2016) the cabinet was appointed, only to exit recession in September 2017. Nigeria’s economy for 2019 has been projected to experience a sluggish growth, with the World Bank estimating a 1.2% growth.
It was disclosed that the cabinet list would be submitted this week, but the screening and final cabinet appointment is likely to last for one or two months. The President promised not to take up to six months before appointing his cabinet.
Meanwhile, the Director of Information in the Ministry of Finance, Hassan Dodo, said he had no knowledge about it.