N4.2tr projects under threat nationwide

Already, the first half of the year has ended without implementation of the capital budgets by the federal and most of the 36 states and Abuja.Daily Trust found out that the capital budget for the federal is N722 billion and that of the 36 states amounted to N3.47 trillion. A great deal of the revenue […]

Already, the first half of the year has ended without implementation of the capital budgets by the federal and most of the 36 states and Abuja.
Daily Trust found out that the capital budget for the federal is N722 billion and that of the 36 states amounted to N3.47 trillion.
A great deal of the revenue accruing to both the federal and the state governments from the federation account is channelled towards recurrent and overheads.
A source at the finance ministry said the ministry was only meeting the obligations of the recurrent budget for MDAs but made no provision for the capital expenditure since January.
The source said already some of the backlogs of the overheads from February to April of the ministries, departments and agencies had been settled.
In recent times most states owed salaries for months due to the cash crunch. The revenue from the crude oil sales which is the main source of income for the governments has dropped by more than 50 percent since June last year.
The price of crude oil in the international market has further dropped recently below $60 per barrel in the last two weeks. As of  last Friday, the Oil prices have staged a recovery this year after hitting a near six-year low close to $45 in January.
Prices collapsed from $115 in June 2014 in a decline that deepened after OPEC refused to prop up prices and chose instead to defend its market share. By Friday, benchmark Brent crude oil was trading at around $59.50 a barrel.
Recently the federal government released a bailout of about N720 billion planned for the states governors out of which N359 billion was shared for the three tiers of government.
In most of the states where transition took place, the new governors inherited huge capital budget debts, a situation that will not give them room to introduce new projects for this year, sources said. Contractors both at federal and states level have abandoned projects sites due to the non-payment of the contract sums.
In his reaction to this development, the President, Nigerian Society of Engineers, Engr. Ademola Olorunfemi said man hours and businesses were being lost increasingly.
But he said the problem at hand was an opportunity to review the huge recurrent expenditure which he reasoned was becoming unsustainable.
“While the non-release of the capital budget is not exactly desirable, it may be a blessing in disguise, as Nigeria had not realised value for money spent on capital projects in the past,” he said.
He urged President Buhari to expedite the release of Capital Votes, as it has left most of major road projects such as the Lagos – Ibadan Expressway in a most deplorable state.
The contractors have since demobilised whilst the Federal Ministry of Works has no funds at all to do even meagre remedial works, he added.
According to him, professionals should act as independent project managers that would monitor these projects and ensure that Nigerians have value for money.
An economist and lecturer at the Department of Economics, Ahmadu Bello University, Zazia, Dr Muhammed Muttaka Usman said the non-release of the capital budget has a lot of implications.
He said releasing the capital budget would create income and reduce the level of poverty in the society.
He, however, lamented that Nigeria’s capital budget in certain instances mostly took care of the buying of computers, cars and other office equipment, instead of massive constructions projects and infrastructural development such as schools, hospitals and housing projects.
Some of the uncompleted projects by the last administration includes East-West Road; Lagos – Ibadan Expressway; Kaduna bypass road; Second Niger Bridge; Kano Western Bypass, Loko Oweto Bridge,  Panyam – Bokkos – Wamba road,  Abuja – Lokoja Road and Toto – Nasarawa – Abaji Road among others.