FG’s 2022 budget: Ministries to spend billions on projects without location

Bloated estimates and unclear line items in the 2022 appropriation bill of the Federal Government of Nigeria has puffed it up by at least N227 billion, people familiar with the matter have said.

Ministries and agencies of the federal government have listed unclear projects as line items. Specificity is a foundational principle in budget allocation, some experts have said. It helps in the improvement of the status of poor and vulnerable groups.

Under the ministry of agriculture and rural development, N746 million, N3.40 billion, and N1.90 were budgeted for the provision and installation of solar-powered street light in rural communities, construction of feeder roads in rural communities in the six geo-political zones and support for infrastructure, projects and coordination services respectively without clear details on location and project description.

The ministry also earmarked N630 million and N1.30 billion for the construction of public toilets in public schools and markets and provision of potable water in rural communities, without specific locations.

Similarly, the ministry of works and housing has sums of money allocated to projects without proper details or specification, among these are N2.28 billion budgeted for the construction of classrooms, N1.10 billion earmarked for the construction of skill acquisition centres as well as N985 million for the construction of primary health care centres, all without location.

Under the ministry of labour and employment N108 million was budgeted for media coverage and propagation of departmental or unit activities, N120 million for sensitisation, awareness creation and publicity on the mandate of the activities of the ministry and N119 million for the provision of media coverage and publicity of the official activities of the ministers, which appears to serve the self-same purpose.

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“The meagre resources allocated to the ministry of works and housing has been thinly spread across hundreds of projects to the extent that money will be spent without any concrete improvement in the road or housing stock,” Eze Onyekpere, convenor and chairman of the Centre for Social Justice said.

“The provision of over N260 billion in service-wide votes for special interventions and poverty reduction is worrisome. Over the years, there is no evidence of benefits to the population accruing from these votes but authorities insist on continuing a practice without visible benefits,” he said.

In the 2022 appropriation bill N16.39 trillion has been budgeted and presented to the National Assembly for approval by President Muhammadu Buhari.

The expenditure framework shows that recurrent spending is estimated at N6.83 trillion, capital expenditure is pegged at N5.35 trillion and debt servicing at N3.61 trillion, while the projected aggregate revenue available to fund the budget is pegged N10.13 trillion.

Additionally, Onyekpere noted that while several programmes in the ministries, departments and agencies have received multi-year funding for skill acquisition and employment creation, it is imperative to demand for reports of achievement in terms of outputs and outcomes.

With the current economic and fiscal crisis in Nigeria, where retained revenue pays for debt service and the bulk of the resources required for personnel, overhead and capital expenditure are sourced through borrowings, people familiar with public finance have called for prudence.

“Nigeria must decisively tackle its debt challenges. The issue is not about the debt-to-GDP ratio, as Nigeria’s debt-to-GDP ratio at 35 per cent is actually still moderate. The big issue is how to service the debt and what that means for resources for domestic investments needed to spur faster economic growth,” Akinwunmi Adesina, president of the African Development Bank had said at the Mid-Term Ministerial Performance Review retreat, in Abuja, October 2021.

According to Onyekpere, playing on words and providing estimates for the same activity under different names is the norm in so many ministries and government agencies.

“There are no locations and identifiable class of beneficiaries in so many projects of the MDAs, the proposed beneficiaries are at large and so wide and there are no decipherable selection criteria considering that the requested amount cannot go round all persons.

“The National Assembly before approval of this budget should insist on locations, qualification criteria of proposed beneficiaries and report of previous achievements,” Onyekpere said.

Tradermoni, farmermoni and marketmoni are simple demonstrations of lack of capacity in engaging the poverty challenge in Nigeria.

They are not sustainable and no one is paying back. They are from borrowed funds. Borrowing money and wasting the same on ventures that cannot contribute to its repayment at a time when debt service is consuming virtually all retained revenue,” he added.

What Nigeria needs is for sustained growth and economic resurgence is to remove the structural bottlenecks that limit the productivity and the revenue earning potential of the huge non-oil sectors, Adesina said.