Economy

Budget: FG to Release N350bn for Capital Projects

Published

7 years ago

June 20, 2017

Budget: FG to Release N350bn for Capital Projects

The Federal Government is set to release the first tranche of capital release of N350bn to its Ministries, Departments and Agencies for implementation of the 2017 budget.

The Minister of Finance, Mrs. Kemi Adeosun, disclosed this on Monday in Abuja during the public presentation of the 2017 Federal Government budget.

The event was attended by top officials in government, including the Minister of Budget and National Planning, Udo Udoma; Minister of State for Budget, Zainab Ahmed; Minister of Health, Prof. Isaac Adewole; and Minister of Foreign Affairs, Geoffrey Onyema, among others.

The 2017 budget christened, ‘Budget of Recovery and Growth’, was presented to the National Assembly on December 14, 2016, and passed by the lawmakers on May 11, 2017.

It was signed into law by the Acting President Yemi Osinbajo on June 12, 2017 and had a total expenditure outlay of N7.44tn, out of which N2.99tn was for non-debt recurrent spending; N2.36tn for capital expenditure; while debt servicing is to gulp N1.66tn.

Adeosun said her ministry was ready to make the release as soon as the budget was loaded, adding that a cash plan meeting would soon be held where the funds would be released to the MDAs.

“We are ready to make releases as soon as the budget is loaded. We have a cash plan meeting and we will release the first tranche of N350bn for capital projects,” she stated.

Udoma, in his presentation at the event, said the 2017 budget would run for one full year till June next year.

He, however, said that both the executive and the legislature were working on a template that would enable the country to commence a predictable budget year that would run between January and December of every year.

He added that if this arrangement was to commence from the 2018 budget year, then the 2017 budget would cease once the next year’s budget was passed and signed into law in January.

The implication of this, according him, is that some of the programmes of government contained in the 2017 fiscal document would be re-introduced in the 2018 budget.

Udoma explained, “The period of the 2016 budget was up till May and the period of the 2017 budget is again by the provision of the bill that was sent to us, which is now an Act of Parliament, continues again, this time, till June.

“However, whenever a new Appropriations Act comes into law, it overtakes the previous Appropriations Act. This means that assuming we were as we intend to achieve this year, we pass the 2018 budget into law; when it is signed into law, then the other one ceases to exist.

“So our aim is by January 2018, we want to get back to the January to December budget year. That means some of the projects in the 2017 budget will have to be carried over.”

He added that the budget that was passed by the National Assembly was what was signed into law by the Acting President, adding that an understanding had been reached for the submission of virement application to adjust the budget to reflect some of the projects, which the lawmakers tinkered with.

Such projects, according to him, are the railways, health and Federal Capital Territory projects.

Udoma said, “We identified some of our priority projects where the allocations have been reduced and discussed with the National Assembly and they graciously agreed that we can bring a virement application to restore the amount of those projects.

“Those projects include the railways, some health projects and Federal Capital Territory projects. But until that is done, the budget and the Appropriations Act reflect exactly what was passed by the National Assembly, and this is what the law is as I speak.

“However, we will be bringing virement application on a number of these projects under consideration. It’s only after they have approved it before it now becomes a law, and the budget will be adjusted to reflect that.”

The minister said the capital allocation of N2.36tn, which represents 31.7 per cent of the total budget, was directed at projects that were aligned with the core execution priorities of the Economic Recovery and Growth Plan.

Udoma noted that allocations had been targeted at critical economic sectors that had quick transformative potential such as infrastructure, agriculture, manufacturing, solid minerals, services, and social development.

For instance, he said the government would be embarking on a rail modernisation programme for which N148bn had been allocated mostly as counterpart funds on projects to be financed by China.

They are Lagos-Kano, Calabar-Lagos, Kano-Kaduna, Ajaokuta-Itakpe-Warri, Kaduna-Idu and other rail projects.

In the area of electricity, the minister said the sum of N40bn service-wide provision had been made to settle reconciled outstanding bills of government agencies as part of the strategy to revamp the ailing power sector.

For the housing sector, Udoma said the sum of N28bn was allocated in the budget for the Federal Government’s National Housing Programme nationwide.

He stated that the government was concerned about the number of abandoned projects scattered across the federation, adding that more targeted releases of funds would be done to relevant agencies of government.

The minister noted that in this year’s budget, funds had been allocated for construction and rehabilitation of over 65 roads and bridges across the six geo-political zones of the country.

Some of them are N10bn for the rehabilitation/reconstruction and expansion of Lagos-Shagamu-Ibadan dual carriageway sections I and II; N13.19bn for the dualisation of the Kano-Maiduguri road Sections I-V; N10.63bn for the rehabilitation of the Enugu-Port Harcourt dual carriageway Sections I-IV; and N7bn for the construction of the Second Niger Bridge phases 2A & 2B, including the access roads.

The Director-General, Budget Office of the Federation, Mr. Ben Akabueze, said the government would be engaging the citizens more in its budgeting process in order to enable the country to have a document that would be all inclusive.

He added that steps were being taken to bridge the gap between the people and the government by promoting transparency and accountability in the entire budget process.

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Samed Olukoya

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.

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Economy

Federal Government Set to Seal $3.8bn Brass Methanol Project Deal in May 2024

Published

1 week ago

April 18, 2024

Samed Olukoya

The Federal Government of Nigeria is on the brink of achieving a significant milestone as it prepares to finalize the Gas Supply and Purchase Agreement (GSPA) for the $3.8 billion Brass Methanol Project.

The agreement to be signed in May 2024 marks a pivotal step in the country’s journey toward industrialization and self-sufficiency in methanol production.

The Brass Methanol Project, located in Bayelsa State, is a flagship industrial endeavor aimed at harnessing Nigeria’s abundant natural gas resources to produce methanol, a vital chemical used in various industrial processes.

With Nigeria currently reliant on imported methanol, this project holds immense promise for reducing dependency on foreign supplies and stimulating economic growth.

Upon completion, the Brass Methanol Project is expected to have a daily production capacity of 10,000 tonnes of methanol, positioning Nigeria as a major player in the global methanol market.

Furthermore, the project is projected to create up to 15,000 jobs during its construction phase, providing a significant boost to employment opportunities in the country.

The successful execution of the GSPA is essential to ensuring uninterrupted gas supply to the Brass Methanol Project.

Key stakeholders, including the Nigerian National Petroleum Company Limited and the Nigerian Content Development & Monitoring Board, are working closely to finalize the agreement and pave the way for the project’s advancement.

Speaking on the significance of the project, Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized President Bola Tinubu’s keen interest in expediting the Brass Methanol Project.

Ekpo reaffirmed the government’s commitment to facilitating the project’s success and harnessing its potential to attract foreign direct investment and drive economic development.

The Brass Methanol Project represents a major stride toward achieving Nigeria’s industrialization goals and unlocking the full potential of its natural resources.

As the country prepares to seal the deal in May 2024, anticipation grows for the transformative impact that this landmark project will have on Nigeria’s economy and industrial landscape.

Economy

IMF Report: Nigeria’s Inflation to Dip to 26.3% in 2024, Growth Expected at 3.3%

Published

1 week ago

April 17, 2024

Samed Olukoya

Nigeria’s economic outlook for 2024 appears cautiously optimistic with projections indicating a potential decrease in the country’s inflation rate alongside moderate economic growth.

The IMF’s revised Global Economic Outlook for 2024 highlights key forecasts for Nigeria’s economic landscape and gave insights into both inflationary trends and GDP expansion.

According to the IMF report, Nigeria’s inflation rate is projected to decline to 26.3% by the end of 2024.

This projection aligns with expectations of a gradual easing of inflationary pressures within the country, although challenges such as fuel subsidy removal and exchange rate fluctuations continue to pose significant hurdles to price stability.

In tandem with the inflation forecast, the IMF also predicts a modest economic growth rate of 3.3% for Nigeria in 2024.

This growth projection reflects a cautious optimism regarding the country’s economic recovery and resilience in the face of various internal and external challenges.

Despite the ongoing efforts to stabilize the foreign exchange market and address macroeconomic imbalances, the IMF underscores the need for continued policy reforms and prudent fiscal management to sustain growth momentum.

The IMF report provides valuable insights into Nigeria’s economic trajectory, offering policymakers, investors, and stakeholders a comprehensive understanding of the country’s macroeconomic dynamics.

While the projected decline in inflation and modest growth outlook offer reasons for cautious optimism, it remains essential for Nigerian authorities to remain vigilant and proactive in addressing underlying structural vulnerabilities and promoting inclusive economic development.

As the country navigates through a challenging economic landscape, concerted efforts towards policy coordination, investment promotion, and structural reforms will be crucial in unlocking Nigeria’s full growth potential and fostering long-term prosperity.

Economy

South Africa’s March Inflation Hits Two-Month Low Amid Economic Uncertainty

Published

1 week ago

April 17, 2024

Samed Olukoya

South Africa’s inflation rate declined to a two-month low, according to data released by Statistics South Africa.

Consumer prices rose by 5.3% year-on-year, down from 5.6% in February. While this decline may initially suggest a positive trend, analysts caution against premature optimism due to various economic factors at play.

The weakening of the South African rand against the dollar, coupled with drought conditions affecting staple crops like white corn and geopolitical tensions in the Middle East leading to rising oil prices, poses significant challenges.

These factors are expected to keep inflation relatively high and stubborn in the coming months, making policymakers hesitant to adjust borrowing costs.

Lesetja Kganyago, Governor of the South African Reserve Bank, reiterated the bank’s cautious stance on inflation pressures.

Despite the recent easing, inflation has consistently remained above the midpoint of the central bank’s target range of 3-6% since May 2021. Consequently, the bank has maintained the benchmark interest rate at 8.25% for nearly a year, aiming to anchor inflation expectations.

While some traders speculate on potential interest rate hikes, forward-rate agreements indicate a low likelihood of such a move at the upcoming monetary policy committee meeting.

The yield on 10-year bonds also saw a marginal decline following the release of the inflation data.

March’s inflation decline was mainly attributed to lower prices in miscellaneous goods and services, education, health, and housing and utilities.

However, core inflation, which excludes volatile food and energy costs, remained relatively steady at 4.9%.

Overall, South Africa’s inflation trajectory underscores the delicate balance between economic recovery and inflation containment amid ongoing global uncertainties.