FG disburses N1.2tn to 17 ministries for major capital projects

The Nigerian Government disbursed N1.23 trillion to 17 ministries for capital projects in the third quarter of 2023.

According to the Budget Implementation Report for Q3 2023, released by the Budget Office on Sunday, this amount is 75.4% lower than the N5 trillion allocated for capital expenditure in the 2023 budget, creating a deficit of N3.8 trillion.

The funds were intended to advance development and infrastructure initiatives as of September 30, 2023.

Capital projects, which are major investments in physical infrastructure or assets expected to provide long-term benefits, typically involve the construction, acquisition, or renovation of tangible assets such as buildings, roads, bridges, dams, schools, hospitals, and other facilities.

The report also revealed that the ministries only utilized N962.87 billion out of the N1.23 trillion allocated.

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 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.”

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 per cent) had utilised more than the overall average utilisation rate of 52.44 per cent of the amount cash-backed. 35 out of them had above 65.0 per cent utilisation rate while only four (7.72 per cent) had one hundred per cent utilisation level.

“The utilization report also revealed that 10 (18.18 per cent) of the MDAs had below 40 per cent utilisation rate of their cash-backed funds. Five (9.10 per cent) of the MDAS had utilisation rates of below 20 per cent while three (5.45 per cent) 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 N189.39bn, N178.62bn and N128.24bn while the Office of the National Security Adviser, Ministry of Environment and Women got of lowest cash backing of N3.93bn, N3.73bn and N5.37bn respectively.

A breakdown showed that the Ministry of Defence got the highest allocation for capital projects with a cash backing of N189.39bn but it only utilised N180.69 leaving a balance of N9.3bn.

This was followed by the Ministry of Works and Housing with a total cash-backed allocation of N178.62bn. It however utilised N118.65bn leaving a balance of N57.97bn.

The agriculture ministry got cash backing of N128.24bn but utilised N109.89bn leaving a balance of N18.35bn.

Other ministries including Water resources utilised N21.81bn out of N28.27bn disbursed, Education only spent N31.35bn out of N54.03bn allocation, Health spent N34.82bn out of its allocation of N55.77bn and Aviation utilised N5.94bn out of a cash backing of N20.44bn.

Similarly, the Ministry of Science, Innovation and Technology spent N12.76bn out of the N44.08bn cash backed for capital projects, Transport spent N43.39bn out of its N56.55bn allocation, the Ministry of Humanitarian Affairs and Disaster Management released N37.13bn for capital projects out of cash backed funding of N53.4bn, the Office of Secretary General of Federation disbursed 14.04bn out of its N17.37bn allocation. Police Affairs Ministry spent N27.42bn out of the N29.79bn released, Labour and Productivity disbursed N6.06bn out of N8.87bn and the Ministry of Interior disbursed N15.66bn out of its allocation of N16.81bn.

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.”

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