Ndubuisi Francis in Abuja
About two months after President Muhammadu Buhari assented to the Appropriation Act, the federal government may begin the release of funds for the implementation of the capital component of the N9.12 trillion 2018 budget this week.
The 2018 budget provides N2.01 trillion for debt service, N3.51 trillion for recurrent expenditure and N2.87 trillion for capital expenditure, an increase over the N2.36 trillion provisioned for 2017.
Feelers indicate that the monetary committee of the Ministry of Finance, which is saddled with the responsibility of releasing funds to various ministries, departments and agencies (MDAs), is meeting to take stock and decide on the first tranche of the capital vote to be released this week.
A top government official told THISDAY that besides procurement issues, the major cause of the delay in commencing the release of the capital vote centred on the recurring controversy over the Federation Account Allocation Committee (FAAC) vis-à-vis remittances by the Nigerian National Petroleum Corporation (NNPC) into the Federation Account.
Remittances by the NNPC had ignited a major disagreement among the FAAC members, with the 36 states of the federation represented by their commissioners for finance refusing to share May and June allocations until issues around an acceptable template by the NNPC were resolved.
With the controversy, May and June allocations were only disbursed among the three tiers of government only about two weeks ago.
The FAAC stalemate created some fiscal challenges at the federal and state levels as they could not pay workers’ salary.
To resolve the recurring controversy over NNPC remittances, the president, last week, approved the creation of a new template for NNPC remittances.
According to THISDAY source, the FAAC stalemate contributed to the delay in the release of the first tranche of the 2018 capital vote.
She noted that without the three tiers of government sharing the May and June allocations, it would have been near impossible for the monetary committee of the finance ministry to meet and decide on what to release as the initial tranche of the capital budget.
The source disclosed with the FAAC issue resolved, the first tranche of the capital vote would be released this week, barring any hitch.
However, even without the FAAC controversy, the first tranche N336 billion of the capital vote for the 2017 budget was released at the end of August, although the budget was signed by the then acting President, Prof. Yemi Osinbajo, on June 12.
Buhari signed this year’s budget on June 19, amid lamentations that the National Assembly removed close to N600 billion provisioned for some critical projects.
Analysts have continued to express doubt over the ability of the government to implement the capital component of the 2018 Budget with election around the corner and about four months to the end of the year.
Moody’s Investors Services Limited, one of the leading global rating agencies, had also pointed out that the capital expenditure portion of the fiscal plan is unrealisable.
There are also fears around the expansionary impact of the 2018 budget, coming at a time when election spending has almost commenced.