Minister of Finance, Mrs Kemi Adeosun, has disclosed that the Federal Government will roll over about 60% of 2017 capital projects to 2018 budget.
She made this known on Tuesday, when she appeared before the Senate Joint Committee on Finance and Appropriations alongside the Minister of Budget and National Planning, Senator Udoma Udo Udoma, where members of the committee quizzed the Ministers.
Mrs Adeosun arrived at the decision to roll over the 2017 capital projects to 2018, on the advice of the Senate Committee to the Executive.
“Note that there was no stoppage in terms of capital releases and projects will simply continue. This administration is focusing on completing prioritised projects that are critical to the administration. So, we will keep the capital going to ensure that the projects are not disrupted from completion”.
The Committee, headed by Senator Danjuma Goje, questioned the Finance Minister over the poor implementation of the 2017 budget and the release of about 15% of the N2.177trn voted for capital projects.
“If the trend of poor releases continues like this, Nigerians will die off. It is 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”.
The Finance Minister stated that the total amount of N340.9bn, for funding of capital projects have been released, for which N2.177trn was budgeted, emphasizing that the Government can only release N440.9bn, on capital projects for 2017.
Both Ministers noted that it will be difficult for the Government to meet obligations in capital budget, stating that there was N2.3trn deficit in the 2017 capital budget.
Mrs Adeosun maintained that the Government cannot release the entire N2.177trn capital vote within the three months left in the year, even if the funds were available.
She pointed out that the 2017 budget was projected mainly on external borrowing, adding that making further releases would depend on how fast the Government could push the borrowing process.
The Minister also emphasized that the cost of domestic borrowing was too high, noting that borrowing from foreign sources was far cheaper than domestic borrowing.
In summary, the following points should be noted as to why the Federal Government decided to roll over a greater part of 2017 capital projects to 2018.
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It was on the advice of the Senate Joint Committee on Finance and Appropriations headed by Senator Danjuma Goje.
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The Federal Government can only release N440.9bn on capital projects for 2017, that is 15% of the 2.177trn, voted for capital projects.
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The 2017 budget was projected mainly on external borrowing and as such further releases will depend on how fast the Government can push the borrowing process.
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Cost of domestic borrowing is too high.
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Even if the funds were available, the Government cannot release the entire N2.177trn for capital projects within the three months left in 2017 while keeping to due process.
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It will be difficult for the Government to meet obligations in capital budget, as there is N2.3trn deficit in the 2017 capital budget.
