FG explains why capital releases are delayed

The Federal Government said, yesterday, that procurement procedure and low revenue were responsible for the delay in capital releases to service the 2016 Budget.

The Minister of Budget and Planning, Senator   Udoma Udoma, disclosed this, in Abuja, while briefing the Sen. Danjuma Goje-led   Senate Committee on Appropriations, on the  2016 budget implementation.

He lamented the level of performance of projected revenue which stood at a mere 55 per cent in the first quarter of the year.

The minister also blamed the  activities of members of the Niger Delta Avengers  that have consistently attacked oil and gas facilities for the dwindling revenue in the country, adding that revenue from the Nigerian Customs Service (NCS) and Federal Inland Revenue Service (FIRS) were equally below projections.

His words, “The overall releases are; N1.7trillion was budgeted   and as at April,   N871 billion was released and that is almost 50   per cent release.  For overhead, N218 billion was budgeted and N52 billion was released, amounting to 25 per cent release and this is because of the low performance of revenue generation.  For Capital, N1.5 trillion was budgeted and N235 billion was released, amounting to 15 per cent release.

“There is a revenue meeting going on in Kano hence I won’t be able to give adequate revenue breakdown because we are not with the document here. That is why it is the expenditure figure that we will be able to give you. The Kano meeting was called to review revenue and the revenue situation because we are not achieving revenue targets which we set for the revenue generating agencies.

“The second reason for the low capital releases is the low revenue. Overall for the first quarter we were running at about 55 per cent in terms of our revenue expectations. The bulk of it is because of the problems in the Niger Delta which affected oil production which prevented us from reaching the 2.2 billion barrels even though the price is going up.  Oil production at a point dropped to below one million barrels per day.

According to the Minister, the releases so far cut across personnel, overhead and capital allocation to the Ministries, Departments and Agencies (MDAs) of government. He noted that it would be difficult to meet the expected target if generated revenues were not enough, said,   “We are not achieving the targets set for revenue generating agencies in the country. If we don’t get the revenue we cannot meet the expenditure target.

Sen. Udoma, however, expressed optimism that things would improve with better revenue outlook before the end of the year with, especially with the recovery of    oil prices and increased revenue from NCS and FIRS. He said, “We are hoping that as the year goes along, we will recover some revenue from oil as production increases. We also expect revenue coming from FIRS because people don’t pay taxes in the first quarter. FIRS had already reached 60 percent of the projected revenue as of June this year and we expect it to keep on rising.

Senator Udoma who called on the need for improved budgetary allocation for the  Integrated Payroll and Personnel Information System (IPPIS) to extend the programme to all agencies of government, said that  the extension would help to check ghost workers in the country.

On  Treasury Single Account (TSA), the minister said that the expectations of the device had not been realized, stressing that there was the need for agencies to collaborate to make it effective.

He added that the 2017 budget  would be transmitted to the National Assembly in October.

Also in his remarks, the Director General, Budget Office, Ben Akabueze, said, “The inability of the country to generate the expected revenue target has to do partly due to difficulties in accessing foreign exchange that affected the import volume and therefore affected customs revenue because the importers and manufacturers cannot import, but now the situation had changed there was improvement in importation since the access to forex had also improved.

“Statutory transfer   of N175, 681m had been met in full as priority projects of the MDAs were considered.  “

 In his remarks, Chairman, Senate Committee of Appropriations, Senator Danjuma Goje who noted that the budget performance as at first quarter of the year was impressive despite dwindling revenue, said, “  You have done well, the Personnel is okay the    Federal Government  is on course in paying salaries unlike states.

 “The only problem is capital release, which is understandable. The important thing is that we needed to let Nigerians know what the government is doing. We will call on the Finance Minister when she comes back from Kano. Senator Goje commended the minister for his comment on the importance of constituency projects to Nigerians, and said, “We had the concern that for the Secretary of the Government of the Federation, Lawal Babachir,    to single out constituency    projects for non-implementation because of funding    gave us concern.  “We feel there is more to it.   We are uncomfortable and you    know the importance attached to constituency projects.”