The Federal Government on Thursday declared that the delay currently been experienced in the execution of capital projects, as captured in the N6.06trillion 2016 budget is due to procurement procedure and low level of revenue generation.
Speaking while appearing at a meeting organized by the Senate Committee on Appropriation, the Minister of Budget and National Planning, Senator Udoma Udo Udoma, said the problem arose from the six months requirement for procurement process on execution of new projects as provided for, in the Public Procurement Act.
He said “no new project is ripe for any capital releases because of the six months of procurement process, including advertising and so on. It is only existing projects which already met the criteria for the various procurement stages that are qualified for capital releases”.
On the problem of low revenue, he believed that the overall revenue for the first quarter, was about 55% of the projected revenue expectations, which according to him, was caused by agitation in the Niger Delta by militants and earlier difficulties faced by importers in accessing foreign exchange.
According to him “The bulk of the problem of low revenue generation came from militant agitations in the Niger Delta, which affected oil production and prevented us from reaching the 2.2 million barrel, even though the price is going up.
“At a point, production went down to one million barrel but right now, we have been informed by the Minister of Petroleum that it is going up again to about N1.9 million barrel, but the revenue will come in three months time because the generation of today is not the revenue of today but of three months time”.
The minister assured the committee that many of the new capital projects captured in the budget would be executed since duration for their implementation had been extended till May next year by the National Assembly.
He said “The National Assembly gave us till May next year to carry out the capital expenditure and we still have 10 months of capital spending to do.
“Nevertheless, out of the capital for MDAs, out of N1, 587,598, 122, 028, we have released N235, 916, 566, 642 (15 percent).
“In personnel releases, the budget was N1, 723, 819, 398, 198 but what we released was N871, 459, 760, 939 which comes to about 50 percent. This is the way it should be because we are already in July and we have done six months, which is half of the year.
“For overhead, the budget is N218, 368, 364, 886 and we have released N52, 913, 047, 226 (25 percent)”, he explained.
The committee chairman, Danjuma Goje in his remarks said the committee would in the remaining 10 months for capital budget implementation, continue to assess the budget performance.