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Presidency: Why There is No Mass Release of Budget Funds

News » Politics

The presidency has again defended its approach to the implementation of the 2012 budget that has put it on a collision course with the National Assembly, stating that it cannot order the mass release of funds to the ministries, departments and agencies (MDAs) of government.

Senior Special Assistant to the President on Public Affairs, Dr. Doyin Okupe, told reporters in Abuja yesterday that the presidency was being methodical in its implementation of the budget and attributed the perceived delay in the release of funds to the MDAs to the need to observe due process.

Besides, he said another problem affecting the quick release of funds appropriated for the 2012 fiscal year, was the non-availability of funds, as more than N1 trillion of the budget needed to be borrowed for its implementation.

His defence came ahead of today’s scheduled appearance of the Minister of Finance and the Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, before the Senate to explain how the presidency has been implementing this year’s Appropriation Act.

He said the presidency could not order the mass release of the appropriated funds to the MDAs because their receipt of funds was dependent on their capacity to manage the huge release of funds.

According to him, to release such funds without due process is to short circuit the laws passed by the National Assembly, which requires specific conditions before contracts are awarded.

He, however, assured Nigerians that the level of the budget’s execution would have risen to between 70 and 80 per cent by the end of the year.

“This budget, if we go by what the House of Representatives claim that all that the Federal Government has done by July 30 was 34 per cent that means that the Federal Government has utilised 34 per cent of the budget in just two-and-half months.

“A budget is supposed to be for a whole year. That means that in the next nine-and-half months, even going by the same pace, it would have hit 70 per cent. This pace will even increase. This year, there is no way it will not hit at least between 70 and 80 per cent,” he added.

According to him, “Before any contract is awarded, there are certain conditions that must be met. Some of these include the mandatory 12 weeks announcement and expression of interest and the due process before the contract is awarded.

“This process is part of the laws of the federation passed by the National Assembly and it cannot be short-circuited.”
Giving details of the implementation of budgets in the last few years, Okupe said the 2007, 2008  and 2009 budgets were implemented up  to 70 per cent, while for the 2010 budget, N900 billion out of some N1.4 trillion budgeted for capital expenditure, was released to the MDAs.

He said government was working assiduously to achieve the faithful implementation of the budget, adding that as part of the efforts, ministers had been taking their turn to brief President Goodluck Jonathan on the implementation of the budget as it affects each ministry.

“The most recent of such exercise was two days ago when the Ministers of Health and Agriculture took their turn.

“Now, this budget was signed into law around the middle of April. Between then and July 20, N404 billion or so had been released and about N300 billion plus has been expended.

“The ministries said that 56 per cent of what had been released has been expended. But the Assembly is saying that because money has been budgeted, it ought to be released as per the quarter they are due.

“Though this is fiscally unadvisable, no serious manager of a nation’s resources will dispense money in that manner.

“Besides, I want to bring up the fact that there is a budget deficit of over a trillion naira in the budget. The implication of which is some part of the money required to fund the budget will be borrowed.

“So it does not make economic sense to borrow money and give the MDAs when they have not exhausted the money given them before as government will be paying interest of up to 15 per cent on money that will just be sitting in the bank for the MDAs waiting to be applied,” he explained.

He added that money is disbursed by the Federal Ministry of Finance, stressing that at the end of every quarter or month, not all the money that is required is available and intact.

“There are issues about accounts receivable from the NNPC and so on and it is not always a free flow. But what is true is that there is no department or ministry in Nigeria today that is unable to perform because it lacks fund. Virtually all of them still have substantial funds in their capital budget accounts with the CBN,” he said.

He appealed to the National Assembly to bear with the presidency as both arms of government are working towards the well-being of Nigerians.

“The current misunderstanding between the Federal Ministry of Finance and the National Assembly is not necessary. I am convinced beyond doubt that the National Assembly means well for the Nigerian people.

“The driving force of both arms of the National Assembly and the presidency is to ensure that the budget is implemented and executed to provide impetus for economic growth and the development of the country. The bandying of statistics and figures about the implementation is not necessary,” he added.


Article Credit: Thisday Newspaper

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Updated 7 Years ago

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