Kemi Adeosun, minister of finance, in a statement at the Ogun state investors forum said that Nigeria has spent N2.5 trillion on capital expenditure since the Buhari-led government came into office in 2015 but data from the Central Bank of Nigeria (CBN) which puts total expenditure at N1.5 trillion disputes this claims.
“We have invested over N2.5 trillion in infrastructure between 2015 and 2017. If you move round the country, you will see on-going works in roads, power, bridges, railway lines and so on. These are important building blocks for the Nigerian economy,” Adeosun said in a post on her Twitter page which she repeated at the summit in Ogun state.
Adeosun further said, “When the Buhari’s government took office in 2015, the total amount invested in roads was N19 billion. In 2016 we raised that to N307.4 billion & N208 billion in 2017. Investment in the Transport Sector went from N6.49 billion in 2015, to N143.1 billion in 2016, & N133.9 billion in 2017.”
Meanwhile the CBN quarterly report puts the total value of capital expenditure N1.5 trillion. Between the third and fourth quarter of 2015, capital expenditure stood at N424.2 billion. In 2016 and 2017, total expenditure was at N734.4 billion and N147.1 billion respectively. Buhari came into office on May 29, 2015.
Clearly the optics is not good as it indicates a government that appears uncoordinated.
“The only thing I can say is contingent liability, maybe she factored that into the total number,” Wolemi Esan, Partner, Energy and Infrastructure at Olaniwun Ajayi LP said in an attempt to provide an explanation for the variance.
A text message sent by our correspondent to Adeosun’s official Twitter account seeking comment from the finance ministry was yet to be replied.
“I would align with the CBN figures, because they are the custodian of the disbursement of the funds to the MDAs and they have more reliable and accurate figures. The bank is in the best position to track and trap disbursement of funds,” an analyst who preferred to remain anonymous because of the sensitivity of the matter said.
A senior analyst at BudgiT corroborated this view saying the CBN figures are reliable and valid and that they have been using it for their research.
Beyond the variance in figures, the key challenge is that Nigeria’s infrastructure spend is still too low.
“The value of Nigeria’s infrastructure is just about 30% of GDP and these pales significantly beside other economies which have infrastructure stock of about 70 percent of GDP,” Esan said.
Pressed to spend its way out of economic recession, Nigeria resorted to expansionary budgets in 2016 and 2017, the latter hitting a record high (in naira terms) of N7.4 trillion.
While the country may have narrowly exited recession following two quarters of consecutive growth in the second and third quarters of 2017, the rebound is not significantly down to the government’s fiscal policies, but to recovering oil prices and production.
Nigeria is moving ahead with an expansionary fiscal policy in 2018 despite the failings of the 2016 and 2017 budgets. The FG’s actual spending in 2016 was N4.396 trillion, which is only 72.5 percent of its expenditure plan of N6.06 trillion for the financial year under review.
In 2017, the government planned to spend N7.44 trillion, a 69.2 percent increase over 2016 expenditure. As at the end of the second half of 2017, only N1.27trn was spent. This amount was for debt servicing and recurrent expenditure as there were no capital releases in the period.
The FG is looking at a total spending of N8.612 trillion in 2018, the largest thus far, in nominal terms, with significant resources allocated to infrastructure and other capital projects. The budget devotes N2.65 trillion or 30.8 percent of its total spend on capital items, while the remaining amount will be spent on recurrent items, if the budget is implemented as proposed by the executive. The deficit size for 2018 is N2.005 trillion.
BUNMI BAILEY AND MICHEAL ANI
