Finance ministry faults N206bn budget padding allegation
… says N206.24bn is correct
The ministry of finance, budget and national planning has denied an allegation of budget padding levelled against it.
Sadiya Farouq, minister of humanitarian affairs, disaster management and social development, had last week accused the finance ministry of adding N206bn to her ministry’s budget.
In a statement signed by Yunusa Tanko Abdullahi, special adviser, media and communications to the minister of finance, budget and national planning, the ministry said: “We hereby wish to respond by putting the record straight: The project so referred to is domiciled in the Ministry of Humanitarian Affairs, Disaster Management and Social Development headquarters,” it said.
According to the statement, the World Bank is the funding source for the National Social Safety Net-Scale Up project to the tune of $473,500,000, which is equivalent to N206,242,395,000, using the N435.57/USD exchange rate.
“The project was correctly described in the submission from International Economic Relations Department (IERD) for the 2023 budget. But, unfortunately, a wrong code was selected from the drop-down menu which resulted in a wrong description of the project which resulted in it being captured as ‘Purchase of Security Equipment’ in the Government Integrated Financial Management Information (GIFMIS) Budget Preparation System (BPS). Please, note that the BPS has a limited range of encoded programme/project descriptions.
Also note that the multilateral loans are usually project’s tied, and have specific codes in the budget system,” it said.
The statement said the multilateral loans are different from the envelopes usually given to ministries, departments and agencies, and that the funds are drawn by the beneficiary ministries under the terms of the agreements, and the financial institutions disburse directly to service providers.
It said there were ample opportunities to review details for observations by ministries and corrections made by the Budget Office of the Federation.
The ministry said the proposed 2023 budget for each ministry was circulated for review and feedback, and was reviewed by the Federal Executive Council before it was submitted to the National Assembly by President Muhammadu Buhari.
It said the federal government for a very long while has made significant progress in its budgeting process, adding that just a few months ago, Nigeria, at the Open Budget Survey, improved by 24 points to record its best budget performance.
It said the current administration had been “highly committed to budget transparency, having undertaken various reforms in the public finance management space which have culminated in the significant recorded improvements”.
The statement said: “Therefore, the amount of N206,242,395,000 is correct. The error in description is regretted, and will be corrected through the Appropriations Committee. In response to the allegation of some line items being inserted into the fiscal estimates for Ministry of Defence and Ministry of Power, the 2023 Appropriation Bill as presented has the following for the above-mentioned ministries and the agencies.
“Ministry of Humanitarian Affairs, Disaster Management and Social Development Project: National Social Safety Nets Project – Scale Up (NSSNP-SU) – N206,242,395,000
This project is domiciled in the FMHADM&SD HQ. The World Bank is the funding source for the project to the tune of $473,500,000, which is equivalent to N206,242,395,000, using the N435.57/USD exchange rate. This project was correctly described in the submission from IERD for the 2023 budget, but unfortunately, a wrong code was inadvertently inserted which resulted in it being captured as Purchase of Security Equipment in the GIFMIS Budget Preparation System. Ministry of Defence Project: Refurbishment and Procurement of Harris RF-5/7800 Military Communication Equipment – N8,600,000,000.”
Read also: Budget padding: Justice Minister Malami says it’s just bad?
According to the statement, the minister of defence wrote to the President requesting the approval and release of $1,363,880.40 and N158,928,045.37 for the implementation of Phase 1 of the project.
It said he also requested that the sums of $12,274,923.60 and N11,946,311,375.18 would be required to implement Phases 2 and 3 of the project, which the President approved.
“50 percent of the requirement for Phases 2 & 3 (using the exchange rate of N435.57/USD), amounting to N8,600,000,000, has been included in the 2023 budget proposal of the MoD. Project, Safe School Initiative got N2,250,000,000, allocation,” the statement said.