• Thursday, July 18, 2024
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Capital projects to be allocated 40% of annual budget over next 10 years

At least 40% of Nigeria’s annual budget would be allocated to capital projects in the next 10 years as Economy Stimulus Bill has passed the second reading in the House of Representatives on Wednesday.

Nigeria’s annual national budget allocates just about 20% to capital projects as evident in the 2020 budget where only N2.46 trillion (inclusive of N318.06 billion in statutory transfers) is proposed for capital projects out of the N10.33 trillion budgeted.

Thus, the Green Chamber of the National Assembly in a bid to change this narrative has passed for third reading, the Bill for an Act to Provide that 40% of Nigeria’s Annual Budget should be earmarked for Capital Projects in the next ten (10) Years (Economy Stimulus Bill) sponsored by Femi Gbajabiamila, Speaker of the House.

The Bill seeks to provide that 40% of the nation’s budget be earmarked for capital projects for the next ten year and creates some forms of monitoring process to ensure implementation and enforcement by providing that upon commencement, the Accountant-General of the Federation shall submit quarterly reports to the National Assembly on the performance of the Capital Budget and that it must be submitted within two weeks after the end of a corresponding quarter.

According to the Bill, “National Assembly shall within two weeks consider the report of the Accountant General of the Federation and if not satisfied shall pass the necessary resolution to ensure implementation and performance by the President.

“This Bill shall be in force for a period of ten years after which there shall be a review by the National Assembly”.

It stipulates that “penalty of 5 years imprisonment or a fine of N50 Million or both for violation or any attempt by any person to frustrate the implementation of the Bill when passed. This stringent punitive measure suggests that the current state of infrastructure and economy are not such to be handled with kids gloves”.

In a lead debate on the importance of the Bill, Gbajabiamila said capital expenditure motivates increase in investment, leading to production capacity increase.

The Speaker who spoke through the Minority Leader, Ndudi Elumelu said production capacity increase gives rise to an increase in goods and services produced in the individual economic activities, which when aggregated, will, in the long run, increase the Gross Domestic Products.

The Speaker argued that “capital projects attract more investments, create jobs and reduce unemployment. Capital projects lead to the empowerment of more people. More people will pay tax to the government thereby empowering the government with more revenue to reinvest in new projects.

“Arising from the above and the current economic challenges confronting us as a people, coupled with the decaying state of infrastructure across the country, we cannot undermine the importance of this Bill which seeks to provide 40% of our annual

Budget for capital project for the next ten years.

“The purpose of the Bill is for us to use our legislative instrument, having been empowered by the Constitution, to support the Federal Government to improve on the nation’s infrastructure and drive the economy for the next ten years. I call on you my Honourable Colleagues to consider the passage of this bill to stimulate the economy for the empowerment of all those we represent”.

In his personal contribution, the Minority Leader of the House said that a critical look at the 2020 budget shows that just 10 per cent was earmarked for capital projects and the Bill was aimed at correcting these anomalies, lamenting that the N120 billion allocated to the power sector in the 2020 budget was not up to 1 per cent of the money  needed to turnaround the sector.

Elumelu maintained that one of the things that can make the country grow significantly is to provide critical infrastructure but that infrastructure cannot be provided if there was reasonable budgetary allocations to capital projects.

Bamidele Salami (PDP, Osun) in his debate said one of the challenges Nigeria has over the years is that the country borrows heavily but there is nothing on ground to show for borrowing and stated that the posed Bill would help the government spend on building infrastructure that would create more jobs.

Abdul Ganiyu (APC, Kwara) on his part observed that recurrent items and overhead items are been lumped together under capital projects, but with the new Bill it has been clearly defined and it will be a catalyst for the development of the country.