N610bn released for capital as FG winds down 2014 budget implementation

Of the over N1.2 trillion earmarked for capital expenditure in 2014, only N610 billion was released as the Federal Government wound down the implementation of the N4.964 trillion budget yesterday.

The year 2014 was a difficult one for Nigeria’s budget. Shrinking oil revenue occasioned by frequent pipeline vandalisation, falling oil prices and under-remittance by some revenue generating Ministries, Departments and Agencies (MDAs) seriously delayed releases, and as such slowed down budget implementation.

There was also the issue of the inability of most spending agencies to utilise capital releases to them, Bright Okogu, director-general of the Budget office told BusinessDay.

Meanwhile, the 2015 budget bill just submitted to the National Assembly a few weeks ago is yet to be appropriated and it is expected that the Federal Government will as usual continue to spend for 2015 to keep the economy running but based on 2014 budget parameters.

Whole appropriation which is already delayed as the government tried to  figure out the best paraders for the 2015 budget gets on.

The sum of N400 billion was released for the first and second quarter capital expenditure, while about N210 billion was released for the third quarter and no releases yet for the fourth quarter of 2014, apart from other releases for programmes like the Subsidy Re-investment Programme (SURE-P).

Recurrent expenditure went on track, BusinessDay finds, eventhough salaries were delayed in later months of the year.

Of the N268.37 billion budgeted for projects under the Subsidy Re-Investment Programme (SURE -P) window, about N208.3 billion was released, out of which 77.6 percent was utilised for various job creation initiatives and infrastructure projects across the country.

Okogu confirmed that this level of implementation came amidst challenges to the anticipated 2014 budget revenue. Quantity shocks saw oil production average 2.2 million barrels per day (mbpd) as against 2.38 mbpd budgeted. There were also price shocks. Oil price fell from $114 per barrel in June to about $60 pd now.

The revenue problems were further compounded by the under-remittance by some revenue generating Ministries, Departments and Agencies (MDAs).

“Low oil income is affecting the budget to some extent because when you budget oil revenue at a certain level, and what comes in is less, it affects your plans and you have to manage what is available to carry on the economy,” Okogu had told BusinessDay in an interview.

Asked what could be responsible for the poor utilisation of released funds, Okogu said, “There is capacity, there is the issue with contractors. There are also weather-related issues that sometimes will affect their pace of activities. So that tells you that the issue is not only about cash availability.”

Meanwhile, the budget office said Tuesday that there are no plans of extending the 2014 budget beyond yesterday, despite poor implementation recorded.

“The 2014 budget year, as scheduled, comes to a close at midnight, December 31, 2014,” Francis Ojiah, director of administration of the Budget Office said in a statement in response to reports that the 2014 budget year had been extended to the end of  March 2015.

“Contrary to the impression given by the report, an extension of the budget year is not the prerogative of the Budget Office of the Federation.

“Rather, it has its own processes and procedures which require Executive and Legislative action.

“An extension of the budget year has neither been contemplated nor discussed by the Executive Branch,” Ojiah said in the statement.

Onyinye Nwachukwu