- N100b Capital Vote Coming This Week
Senators are not pleased that the Federal Government plans to release only an “insignificant” fraction of the N2.177 trillion capital vote in this year’s budget.
Minister of Finance Mrs. Kemi Adeosun told the lawmakers that the government would release only N440 billion of the vote.
Mrs Adeosun, joined by the Minister of Budget and National Planning, Senator Udoma Udo Udoma, told the senators in an interactive session yesterday that the government lacked adequate funding for the budget.
The ministers said the government planned to release over N100 billion this week, in addition to the N310 billion earlier released for capital in the 2017 budget.
According to the ministers, it will be extremely difficult for the government to meet obligations in capital budget. There is a N2.3 trillion deficit in this year’s capital budget, they said.
Mrs. Adeosun said the budget was projected mainly on external borrowing, adding that making further capital releases would depend on how fast the government could push the borrowing process.
She informed the lawmakers that domestic borrowing would not be enough to fund the gaps in the budget, stressing that the cost was getting too high. She said borrowing from foreign sources was far cheaper.
Even if the funds were to be available, she said, the government cannot release the entire N2.177 trillion capital vote within the three months left in the year.
Consequently, the ministers said, about 60 per cent of the 2017 capital budget would be rolled over to next year’s budget, just as that of 2016 was rolled over till May 2017.
Worried by the huge gap in the capital budget and the actual amount to be released, the senators warned that the trend could injure the economy and endanger governance.
The senators drew a parallel between Nigeria and Brazil in the handling of economic recession in the two countries.
The Brazilian economy had suffered recession for eight consecutive quarters but came out of it with 2.46 inflation rate and 10 per cent misery rate.
The lawmakers challenged the two ministers to explain why the Nigerian economy, which suffered recession for five consecutive quarters, would come out with 16.5 percent inflation rate and over 50 per cent misery rate.
Mrs. Adeosun replied that the difference was in the better infrastructure obtainable in Brazil. The South American country enjoys 24-hour electricity supply, she said.
She also attributed the wide gap in the inflation rates between the two countries to the nature of the two economies. According to the minister, Brazil operates a diversified economy, with emphasis on massive agricultural production.
She blamed Nigeria’s slow growth on poor infrastructure and dependence on oil revenues as major source of foreign exchange earnings.
The senators noted that while Brazil, with better handling of its recession regime, was still crawling out of recession, the authorities in Nigerian were celebrating 16.5 percent inflation rate and over 50 percent misery rate, a development the senators described as “disappointing”.
The session was conducted by the Senate standing committees on Appropriation and Finance, chaired by Senators Danjuma Goje and John Enoh.
In a concluding remark, Senator Goje said: “If the trend of poor releases continues like this, Nigerians will die off. It’s not good to raise people’s hopes and dash them.
“In implementing the January-December fiscal system, we should be careful not to sacrifice half of the 2017 budget.”