Connect with us

Finance

FMPWH Gets Lion’s Share as 2018 Capital Spending Hits N1.9tn

Published

on

budget
  • FMPWH Gets Lion’s Share as 2018 Capital Spending Hits N1.9tn

The Ministry of Power, Works, and Housing has got N347.52bn, which is the highest amount so far released to any ministry as the 2018 capital spending hit N1.9tn, reports Ifeanyi Onuba

Between June 20, 2018, when the 2018 budget was signed into law by President Muhammadu Buhari and March 29, 2019, the Federal Government has released a total of N1.9tn to finance the capital components of the 2018 budget.

The details of the amount which was released to Ministries, Departments and Agencies of government was contained in a document submitted by the Ministry of Finance to the National Assembly.

A copy of the document was obtained by our correspondent on Sunday in Abuja.

The 2018 budget, signed by President Muhammadu Buhari on June 20 last year, had total spending of N9.1tn.

The capital expenditure was to gulp 31.5 per cent of the total expenditure at N2.87tn, while recurrent non-debt spending was put at N3.51tn.

There was also a provision of N2.01tn for debt servicing which is 21 per cent of the total budget while a provision of N177bn to retire maturing bond to local contractors was made by the government.

The Ministry of Power, Works and Housing had the highest allocation with N715bn for both recurrent and capital expenditure, the Ministry of Interior was to get N577bn while N576bn was allocated to the Ministry of Defence.

The Ministry of Education was allocated N542bn; Health, N356bn; Transportation, N267bn; and Agriculture, N203bn.

In the document submitted to the lawmakers, the ministry stated that the N1.9tn included the N277bn which was released to agencies of government at the end of March, 2019.

The government stated that capital spending had been prioritised in favour of critical ongoing infrastructure projects in the power, roads, rail and agriculture sectors of the economy.

The Federal Government, according to the document, stated that the implementation of the capital component of the 2018 budget would continue until the 2019 budget was eventually passed into law by the National Assembly.

The 2019 budget, which is still undergoing legislative scrutiny, has an estimate of N8.83tn made up of N4.04tn for recurrent expenditure, N2.03tn for capital expenditure and N2.14tn for debt servicing, among others.

The document stated, “Of the total appropriation of N9.12tn, N6.99tn had been spent by December 31, 2018. This represents 77 per cent performance.

“Debt service and the implementation of non-debt recurrent expenditure, notably payment of workers’ salaries and pensions, were on track.

“Capital releases only commenced after the signing of the 2018 budget on June 20, 2018. As of March 29, 2019, a total of N1.91tn had been released for capital projects which include N277bn just released at the end of March.

“Spending on capital projects has been prioritised in favour of critical ongoing infrastructure projects in the power, roads, rail and agriculture sectors.

“Implementation of the 2018 capital budget will continue into 2019 until the 2019 budget is passed into law.”

A breakdown of the N1.91tn released for capital projects showed that the ministry of Power, Works and Housing got the highest amount of N347.52bn.

This is about 42.95 per cent of the N809.05bn which was allocated to the ministry in the 2018 budget.

This is followed by defence and security which got N205.89bn. The amount received by the sector is about 66.85 per cent of its N308bn allocation in 2018.

The document put the amount released to the agriculture and water resources sector at N152.5bn which is about 51.45 per cent of its N296.39bn allocation

In the same vein, out of the N251.42bn allocated to the transportation sector in the 2018 budget, about N127.68bn which is 50.79 per cent of the sector’s budget had been released.

For the health and education sectors, the document stated that N115.43bn had been released out of the N189.39bn allocated to the sector in the 2018 budget.

It said the sum of N186.05bn out of N323.3bn allocated to other sectors had been released by the Ministry of Finance.

Further analysis of the document showed that about N70bn out of the N100bn allocated for zonal intervention projects had been released by the Ministry of Finance.

In the same vein, N456.5bn which is 86.07 per cent of the N530.42bn allocated for statutory transfers had been released by the government.

The document also stated that the sum of N254.27bn had been released for capital supplementation. This is about 33.54 per cent of the N758.12bn allocated for the expenditure sub-head in the 2018 budget.

Some finance and economic experts said that there was a need for the Federal Government to put in place mechanisms that would help check the delay in the passage of the budget as it was affecting the rate of capital projects execution.

They said that at a time when the government was working on how to sustain the growth momentum in the economy, it was critical for funds to be released for capital projects on time.

The Lead Director, Centre for Social Justice, Eze Onyekpere, stated that the practice where the annual Federal Government budget was signed into law in the second quarter of each year was inimical to its effective implementation.

He called on the Federal Government to commence the process of enacting a new Public Finance Management Act to address the incessant delays that had characterised the country’s budget process.

The new law, according to him, would also define the framework for the engagement of stakeholders in the budget preparation as well as approval processes.

He said, “Lessons need to be learnt from this budget fiasco and this challenge will now be converted into an opportunity.

“There is a need for effective legislative collaboration in the preparation and approval of the budget, which may necessitate the amendment of section 81 of the 1999 Constitution, enactment of a new public finance management Act which sets the rules for budgeting time frames.

“In the legislature, it is also imperative that the ground rules for the approval of budgets be streamlined and modified so that no set of members of the National Assembly should be in a position to alter the consensus of the majority.”

In his comment, a Developmental Economist, Odilim Enwagbara, said there was the need for the review of the Fiscal Responsibility Act to make it define properly the timeline for the preparation of the budget.

He said with well-defined timelines for the budget process which must stipulate penalties in case of default, both the executive and the legislature would be forced to work assiduously to meet with such deadlines.

He said the delay in the passage of the budget had serious negative implications for the economy as it would affect both fiscal and monetary policies.

For instance, he said in the area of fiscal policy, the government could not release funds for the implementation of capital projects, adding that with a huge infrastructure deficit of $350bn, it would be difficult to address such infrastructure gap with a delayed budget.

He said, “To delay budget is to delay investments. If you don’t have a new budget ready to take off, how do you spend for capital projects and pay salaries and even run the government?”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Banking Sector

Adesola Adeduntan’s Early Departure Prompts First Bank Holdings to Scrap Capital Raise Plans

Published

on

FirstBank Headquarter - Investors King

First Bank Holdings Plc has decided to scrap its plans for capital raise following the early departure of its Managing Director, Adesola Adeduntan.

The decision to cancel the extraordinary general meeting (EGM), which was planned to discuss the proposed N300 billion capital raise, comes amidst Adeduntan’s resignation from his role, eight months before the scheduled expiration of his tenure.

The bank formally announced the cancellation of the EGM in a filing seen by Investors King on Friday.

The meeting, which was initially scheduled to be held virtually on April 30, 2024, aimed to seek authorization from the company’s members for the capital raise and address other related matters.

Adeduntan’s resignation, announced on the same day as the cancellation of the EGM, comes as a result of the Central Bank of Nigeria’s tenure requirements affecting bank executives.

In his retirement letter addressed to the Chairman of First Bank, Adeduntan expressed gratitude for the support received during his stewardship and highlighted the strides made by the bank during his tenure.

He stated, “During this period, the bank and its subsidiaries have undergone significant changes and broken new grounds. We have repositioned the institution as an enviable financial giant in Africa.”

Adeduntan further mentioned his decision to pursue other interests, prompting his early retirement effective April 20, 2024.

The cancellation of the capital raise plans shows the impact of Adeduntan’s departure on the bank’s strategic initiatives.

It reflects a shift in priorities for First Bank Holdings as it navigates leadership changes and seeks to chart a new course for its future direction.

Continue Reading

Banking Sector

First Bank MD, Dr. Adesola Adeduntan, Resigns to Pursue New Opportunities

Published

on

Dr. Adesola Adeduntan - FirstBank CEO - Investors King

Dr. Adesola Adeduntan, the Managing Director of First Bank Nigeria Limited, has announced his resignation from the bank after nine years of leadership.

In a letter addressed to the Chairman of First Bank, Mr. Tunde Hassan-Odukale, Dr. Adeduntan expressed his decision to step down voluntarily, effective April 20, 2024, to pursue new opportunities.

Having served as the CEO since January 1, 2016, Dr. Adeduntan’s tenure has been marked by significant transformations within the institution. Under his leadership, First Bank and its subsidiaries have undergone substantial changes, positioning the bank as a formidable financial powerhouse in Africa.

In his resignation letter, Dr. Adeduntan highlighted the achievements made during his tenure, stating, “We have repositioned the institution as an enviable financial giant in Africa.”

He expressed gratitude to the board of directors of First Bank and FBN Holdings Plc for their support throughout his stewardship.

Dr. Adeduntan’s decision to resign comes as he approaches the end of his contract, which was set to expire on December 31, 2024.

He stated, “After which I would no longer be eligible for employment within the bank.” Despite his departure, he wished the institution continued success and progress in its evolution.

Throughout his career in banking and finance spanning over three decades, Dr. Adeduntan has been recognized for his contributions and received numerous awards.

He holds a Doctor of Science, Honoris Causa, and an MBA from Cranfield University, United Kingdom, and is a fellow of the Institute of Chartered Accountants of Nigeria (ICAN) and the Chartered Institute of Bankers of Nigeria (CIBN).

Dr. Adeduntan’s departure marks the end of an era for First Bank, as the institution prepares to transition into a new phase of its evolution.

His leadership has left a lasting legacy of transformation and growth, and his contributions will be remembered in the annals of the bank’s history.

Continue Reading

Banking Sector

UBA America Strengthens Commercial Diplomacy, Hosts Diplomats, Others at World Bank Summit

Published

on

UBA

UBA America, the United States subsidiary of United Bank for Africa (UBA) Plc hosted diplomats, government officials and business leaders to a networking reception in partnership with the esteemed Business Council for International Understanding (BCIU) and the U.S. Department of States in Washington DC on Monday .

The event which was held on the sidelines of the ongoing IMF World Bank Spring Meetings was organised by the BCIU and US Department of State to enhance collaboration and fortify commercial diplomacy among nations, institutions and individuals.

Speaking during the event, UBA’s Group Managing Director/Chief Executive Officer, Oliver Alawuba, noted that the bank’s co-hosting of the event via its American subsidiary, underscores its commitment towards cultivating robust relationships within the development communities in the United States.

He said, “As a distinguished member of BCIU, a non-profit organisation providing customised commercial diplomacy services, UBA Group and UBA America share BCIU’s vision of actively pursuing strategic opportunities, contributing to global economic cooperation, deepening of economic diplomacy, facilitating ideas, forging partnerships, and adding value for all stakeholders.”.

“Our resolve to co-host this Networking Reception symbolises our dedication to fostering inclusive economic growth and partnership across borders. By leveraging platforms like this, we can collectively address shared challenges and seize opportunities for sustainable development,” he stated further.

BCIU is a non-profit Association comprising of policy experts, strategic advisors, and trade educators, and offers bespoke commercial diplomacy services to the world’s governments and leading organisations, from Fortune 100 companies to global investors and multilateral institutions.

Only last year, the CEO UBA America, Sola Yomi-Ajayi, was appointed to the Board of BCIU, where she collaborates with fellow board members to ensure the organisation operates in alignment with its by-laws and New York 501(c)3 non-profit legislation.

Yomi-Ajayi has been committed to nurturing long-term organisational growth and sustainability, thereby reinforcing the bond between UBA America, BCIU, and the broader international community.

UBA America is the United States subsidiary of United Bank for Africa (UBA) Plc, one of Africa’s leading financial institutions with presence in 20 African countries, as well as in the United Kingdom, France, and the United Arab Emirates. UBA America serves as a vital link between Africa and the global financial markets, offering a range of banking services tailored to meet the needs of individuals, businesses, and institutions.

As the only sub-Saharan African bank with an operational banking license in the U.S., UBA America is uniquely positioned to provide corporate banking services to North American institutions doing business with or in Africa.

UBA America delivers treasury, trade finance, and correspondent banking solutions to sovereign and central banks, financial institutions, SMEs, foundations, and multilateral and development organizations. Leveraging its knowledge, capacity, and unique position as part of an international banking group, the Bank seeks to provide exceptional value to our customers around the world.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending