About N300 billion of the N400 billion allocation so far released by the Federal Gov ernment for capital projects in the 2016 Budget is idling away at the Central Bank of Nigeria’s (CBN) vault due to procurement hurdles, New Telegraph has learnt.
A serving minister, who confirmed this to New Telegraph, explained that while N400 billion has been released out of N1.8 trillion capital expenditure of the N6.2 trillion budget, only two ministries – Ministry of Transport and Ministry of Power, Works & Housing – have been able to access their portion of the allocation.
All the federal ministries have received at least 40 per cent of their capital allocation, which they cannot presently access.
This, the source added, largely accounted for the near grounding of economic activities being witnessed across the Ministries, Departments and Agencies (MDAs) of Federal Government.
The capital allocations to the entire ministries as provided in 2016 budget are as follows: Health (N28.650 billion); Works, Power and Housing (N422.964 billion); Agriculture (N46.173 billion); Environment (N35.433 billion); Communications & Technology (N5.992 billion); National Planning and Budget (N404.865 million); and Federal Capital Territory (N29,297 billion).
Others ministries are Foreign Affairs (N7.076 billion); Information and Culture (N6.071 billion); Justice (N878.736 million); Labour and Employment (N5.542 billion); Water Resources (N46.081 billion); Youths and Sports (N4.660 billion); and Education (N35.433 billion); Also included are Defence (N130.864 billion); Finance (N667.842 million);, Petroleum Resources (N6.304 billion); Niger Delta (N19.440 billion); Science and Technology (N27.006 billion); Solid Minerals (N7.332 billion); Special Duties and SGF (N65.604 million); Transport (N188.674 billion); Trade and Investment (N5.886 billion), and Women Affairs (N2.293 billion). Narrating the frustration faced in accessing the funds, a key official in the Muhammadu Buhari administration, who spoke in confidence to New Telegraph, said: “Of the N400 billion so far released, just two ministries – the Ministry of Transport and Ministry of Works, Power & Housing – have been able to access what has been released to them so far for capital projects.
The other ministries have not been able to access the 40 per cent allocation for capital projects. Hence, over N300 billion meant for MDAs for capital projects is idling away in the Treasury Single Account (TSA) of the ministries with the CBN because of strenuous procurement procedures.
“The two ministries that were able to access their released allocation applied the funds on projects approved in 2014 by the immediate past administration of former President Goodluck Jonathan.
“The two projects approved by the Federal Executive Council (FEC) last week, for the construction of library at University of Lagos and Post-graduate hall at the University of Ibadan are not new projects,” he said.
Although Buhari gave assent to the budget in June, but due to the procurement process as specified by the Public Procurement Act, it will take a minimum of four months to complete contract award.
The first step in the contract award is advertisement, which takes six weeks. This is followed by opening of financial and technical bids that will last for one month, after which successful bidders will be shortlisted.
Then the BPP will have to raise a No Objection Certificate. If the contract value is more than N300 million, it will need FEC approval. This process takes between four and six months. However, some top officers of the BPP have also been fingered as deliberately frustrating ministers and permanent secretaries by overtly complicating the process.
“You know most of them deal with the major contractors, they can frustrate procurement process for ministries, compelling either the ministers or permanent secretaries to personally reach out to BPP.
“The issue is that most head of MDAs are appointees of the Peoples Democratic Party’s (PDP) administration. They are frustrating the process,” said the source. New Telegraph gathered that some of these encumbrances are responsible for the seeming non-performance of the All Progressives Congress (APC)-led government.
Lamenting the situation, a senior government official, who spoke on the condition of anonymity, said: “APC made promises which are yet to be fulfilled and 2019 is at the corner and procurement hindrance is there and you also know that President Muhammadu Buhari is a stickler for law and procedures. “N300 billion is idling away at CBN because of procurement process.
With the current situation, we have to spend our way out of recession; to spend funds in critical areas that can create jobs. “How can you say capital vote had been released and yet they can’t be accessed? The budget was assented to in June. Money has been released to the TSA accounts of the MDAs, but most ministries are idling away because there is no access to the money.
This is why the president is seeking for economic stabilisation policy which the media term emergency powers to reflate the economy.” When our correspondent contacted the Director of Press at Budget and National Planning, Mr. Adedeji Ajibade, on the development over the weekend, he requested for more time to get across to the minister, Senator Udoma Udo Udoma.
“I am sorry, I’ll not be able to respond until on Monday when I will see the minister and request of him to respond to your question,” Ajibade told our correspondent on phone. When contacted for the second time on phone yesterday, Ajibade told New Telegraph that: “Your question is beyond me.
I will have to speak with the minister and get back to you.” New Telegraph had reported exclusively penultimate Monday that Buhari would introduce a bill seeking emergency powers from the National Assembly to reflate the ailing economy, in order to manifestly deliver the change and quality services promised to Nigerians during the 2015 electioneering.
The bill, which will be sent to the National Assembly by the president upon resumption from its annual recess, is seeking unfettered powers to set aside some extant laws and simultaneously be empowered to come up with an economic recovery initiative within the next one year.
Also, the bill seeks powers to abridge the procurement process with a view to guaranteeing stimulus spending on critical sectors of the economy; make orders to favour local contractors/ suppliers in contract awards; abridge the process of sale or lease of government assets to generate revenue; and allow virement of budgetary allocations to projects that are urgent, without recourse to the National Assembly.
The bill also seeks to amend laws such as UBEC Act, so that states that cannot access their cash trapped in the commission’s accounts as a result of their inability to meet the counterpart funding can do so.