2024 budget: Questions over 25% capital component performance

There is disquiet over the revelation that the federal government has implemented only 25 per cent of the capital expenditure in the 2024 budget.  A report of the Presidential Economic Team led by the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, indicates that recurrent expenditure in the 2024 budget achieved […]

There is disquiet over the revelation that the federal government has implemented only 25 per cent of the capital expenditure in the 2024 budget. 

A report of the Presidential Economic Team led by the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, indicates that recurrent expenditure in the 2024 budget achieved a 43 per cent implementation rate while the capital expenditure lagged significantly at only 25 per cent.

The report was presented during a joint meeting between the chairmen of the Senate and House of Representatives committees on appropriation and the Presidential Economic Team on consideration of the 2025 appropriation bill at the National Assembly.

The chairman, Senate Committee on Appropriation, Solomon Adeola (APC, Ogun West) and his counterpart at the House of Representatives, Abubakar Bichi questioned the outcome.

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The presentation angered the Senate committee to order the finance minister and other members of the Presidential Economic Team to release more funds for the completion of capital projects in the 2024 budget to ensure the success of the ‘Renewed Hope’ agenda of President Bola Ahmed Tinubu

Weekend Trust reports that the anger stemmed from the fact that the budget for the 2024 fiscal year, initially pegged at N28.7 trillion, was reviewed upward to N35.06 trillion  to accommodate N3.2 trillion for “Renewed Hope” infrastructure projects and N3 trillion for additional recurrent expenditure.

The adjustments were approved following a request by President Tinubu to address critical infrastructure needs and operational demands.

Despite the budget expansion, the 2024 budget performance has been low, according to the report by the Minister Edun.

Weekend Trust reports that the revelation has sparked anger, especially considering the fact that several budgets were being run by the president in the year under review. 

 

Multiple budgets 

Recall that the National Assembly, in December 2023, extended the implementation period of capital component of the budget for that fiscal year from December 31, 2023 to March 31, 2024.

It similarly extended the lifespan of the N2.17 trillion 2023 supplementary budget, which was passed in November, 2023, following a request by President Tinubu.

Both chambers of the National Assembly further extended the implementation period for the budgetary appropriations from March 31, 2024 to June 30, 2024 on March 19 and 20, 2024 respectively following another request from the president.

The request for another extension of the implementation of the capital component of the budget came a few days to the June 30 implementation deadline earlier approved by the National Assembly.

Again, the president submitted another supplementary budget to the parliament.

Weekend Trust reports that with the extension of the three other appropriation acts, Nigeria was running four budgets concurrently in 2024.

While the Senate considered and passed the president’s request after an executive session, Tinubu’s proposal caused a heated debate at the House of Representatives, forcing Speaker Abbas Tajudeen to move the House into an executive session before the lawmakers approved the request.

 

Subsidy proceeds 

But there are many unanswered questions on why the capital component of the 2024 budget has achieved only 25 per cent implementation.

Pundits have argued that top officials of the government have skeletons in their cupboards and should come public to explain to Nigerians why the capital component of the budget achieved just 25 per cent implementation despite the huge allocations in the budgets.

Nigerians were perplexed on Thursday when the Senate Committee on Appropriations provided opportunity for heads of  ministries, departments and agencies (MDAs) to provide defence for the 2025 budget allocations.

President Tinubu had on December 18, 2024 presented a N49.7 trillion 2025 appropriation bill to a joint session of the National Assembly and asked the lawmakers to expeditiously pass the bill.

Weekend Trust reports that both chambers of the National Assembly have since passed the 2025 budget estimates for second reading. 

But at the commencement of defence yesterday, the Senate Committee on Appropriations grilled the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun; director-general of the National Orientation Agency (NOA), Mallam Lanre Issa-Onilu and his counterpart in the News Agency of Nigeria (NAN), Ali Mohammed Ali.

While Edun and the Minister of Budget and Economic Planning, Senator Atiku Bagudu, were put on hot seats by the Senate Committee on Appropriation, the director-general of the NOA and that of the NAN had very tough encounters with the Senate Committee on Information and National Orientation.

The appropriation committee had grilled Edun, demanding to know how much was realised and saved since fuel subsidy was removed. The committee also demanded to know how much was expended from the proceeds, how much was debt servicing, and many others.

But Edun surprised many when he requested that the committee, led by Senator Solomon Adeola (APC, Ogun West) should accord him a closed-door session instead of providing realistic answers in public.

“Are we in a closed-door session? If we are not in a closed-door session, I will humbly seek for that for detailed explanations on the questions asked,” he said.

At this juncture, journalists and other persons were asked to leave for the minister to provide answers to the questions. With this, analysts have accused the government of hiding something from Nigerians.

 

More questions 

There are also questions surrounding the issue of revenue generation by various agencies of the government.

The Nigeria Customs Service (NCS), Nigerian National Petroleum Company Limited (NNPCL) and the Federal Inland Revenue Service (FIRS) had recently exceeded their revenue targets. They raked in a combined revenue of N36.952 trillion, which was way above the target for the 2024 fiscal year.

Heads of these agencies spoke during their interface with the Joint Committee on Finance, Budget and National Planning, led by Senator Sani Musa (APC, Niger East) on 2025 to 2027 Medium Term Expenditure Framework and Fiscal Strategy Paper, MTEF-FSP, on November 25, 2024.

The Group Chief Executive Officer of the NNPCL, Mele Kyari, in his own presentation, said the company exceeded the N12.3 trillion revenue projected for 2024 by attaining the N13.1 trillion threshold before the end of the third quarter. 

Kyari said, “On the 2025 fiscal year, N23.7 trillion is projected by NNPCL to be remitted into the federation account.”

Also, the Comptroller-General of the Nigeria Customs Service, Bashir Adeniyi, said that as at September 30, 2024, the service had generated N5.352 trillion in revenue, above the N5.09 trillion projected for the entire 2024 fiscal year.

Similarly, the chairman of the Federal Inland Revenue Service (FIRS), Zacchaeus Adedeji said, “On company income tax, N4 trillion was targeted, but N5.7 trillion has been realised. On education tax, while N70 billion was targeted, a total of N1.5 trillion has been realised.

 “All in all, out of N19.4 trillion targeted for the 2024 fiscal year, N18.5 trillion was realised at the end of September, which clearly shows that the target will be far exceeded by the end of the year.”

However, the federal government insisted that borrowing was still needed for proper funding of the budget despite increased revenues made by these agencies.

This is in addition to the level of poverty, hunger, insecurity, high cost of goods and services confronting the ordinary Nigerians

At a session that lasted for over four hours in  Room 231, Senate wing, the revenue-generating agencies made their separate presentations on 2024 budget performance and revenue projections for the N49.7 trillion 2025 budget.