• Saturday, July 20, 2024
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Capital projects to get 40% of annual budgets in next 10 years

Femi Gbajabiamila

If the Economy Stimulus Bill which passed second reading in the House of Representatives on Wednesday eventually becomes law, it would mean that at least 40 percent of Nigeria’s annual budget would be allocated to capital projects in the next 10 years.

Nigeria allocated just about 20 percent or N2.46 trillion (inclusive of N318.06 billion in statutory transfers) of its N10.33 trillion 2020 national budget to capital projects.

In a bid to change this narrative, the House of Representatives on Wednesday passed for third reading the Bill for an Act to Provide that 40 Percent of Nigeria’s Annual Budget Should be Earmarked for Capital Projects in the Next 10 Years, otherwise called the Economy Stimulus Bill.

The Bill, sponsored by Femi Gbajabiamila, speaker of the House, seeks to provide that 40 percent of the nation’s budget be earmarked for capital projects for the next 10 years. It also creates some form 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 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 10 years after which there shall be a review by the National Assembly.”

It stipulates that there shall be a “penalty of five 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,” it says.

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

Gbajabiamila, who spoke through Ndudi Elumelu, minority leader of the House, said production capacity increase gives rise to increase in goods and services produced in the individual economy, activities which when aggregated will in the long run increase the Gross Domestic Product.

“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,” the speaker argued.

“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 percent of our annual budget for capital project for the next 10 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 10 years. I call on you, my honorable colleagues, to consider the passage of this Bill to stimulate the economy for the empowerment of all those we represent,” he said.

In his personal contribution, Elumelu said a critical look at the 2020 budget shows that just 20 percent was earmarked for capital projects and the Bill was aimed at correcting these anomalies. He lamented that the N120 billion allocated to the power sector in the 2020 budget was not up to 1 percent of the money needed to turn around the sector.

He maintained that one of the things that can make the country grow significantly is to provide critical infrastructure, but the infrastructure cannot be provided if there were not 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. He said the proposed Bill would help 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 being lumped together under capital projects, but with new Bill has clearly defined everything and it would be a catalyst for the development of the country.

The Bill was referred to the House Standing Committees on Finance and Appropriation for further legislative action.