As various committees of the National Assembly end N20.5trillion 2023 budget defence sessions with relevant Ministries, Departments and Agencies (MDAs) this week, TAIYE ODEWALE examines challenge of capital votes reduction starring them in the face
Sign of the challenge
Clear sign that there would be reduction in the capital expenditure component of 2023 budgetary proposals for the various government owned Ministries, Departments and Agencies (MDAs), in the 2023 fiscal year, emerged on Friday, October 7, 2022, when President Muhammadu Buhari, presented N20.51trillion 2023 budget proposals to joint session of the National Assembly.
In the N20.51trillion 2023 budget proposals presented by President Muhammadu Buhari to the joint session of the National Assembly, N5.35trillion was earmarked for capital expenditure which is far less than N5.467trillion earmarked for similar purpose in the N17.1trillion 2022 budget proposal presented by President Buhari in December 2021.
It would be recalled that the N17.1trillion 2022 budget proposal was later jerked up to N17.3trillion in February 2022 through amendment made to that effect with corresponding increase of the Capital vote to N5.642trillion.
Consequently, with sharp drop of the capital vote from N5.6trillion in the 2022 fiscal year to the proposed N5.35trillion for 2023 fiscal year, components of it across the various MDAs, were seriously affected with drastic reductions.
Lamentation galore from various MDAs
First to lament on drastic reductions in capital votes components of 2023 budget envelopes earmarked for his ministry and agencies under it, was the Minister of Information and Culture, Alhaji Lai Mohammed.
Lai Mohammed who made the lamentation last week Monday to members of the Senate Committee on Information said the reductions were too drastic and crippling, as far as the wars against fake news, disinformation and hate speech were concerned.
He said: “If there is any Ministry that should be adequately funded and not suffer from yearly budget cuts, is the Information Ministry.
“The terror alert raised by America and some other countries against Nigeria, though debunked, but not properly done in terms of putting things in proper context in preventing wrong perception from becoming reality.
“The Ministry is even more incapacitated from discharging its basic functions of getting Nigerians informed at all times as regards position of government on burning issues through yearly budgetary cuts.
“Distinguished Senators, I’m extremely sad as far as yearly budgetary cuts are concerned, because it is getting worse and worse by the day.
“A worrisome example of this is that while the Information Ministry was given N2.5billion for capital expenditure in 2022, one third of it which is N869million is earmarked for similar purpose in 2023 fiscal year.
“This to us in the Ministry is very depressing because it seems as if is the main agency bearing the burden of cash crunch being faced by government”.
Subtly justifying the budgetary cut in his remarks, the Chairman of the Committee, Senator Danladi Sankara (APC Jigawa North West), told the minister that yearly budget cuts are not limited to Information Ministry but all MDAs generally, since capital vote component of the federal budget itself dropped from N5.64trillion in 2022 to N5.35trillion in the proposed N20.51triilion 2023 budget.
Similar lamentation by the Minister of Works and Housing
In his own 2023 budget defence with the Senate Committees on Works and Housing at different sessions on Wednesday last week, the Minister of Works and Housing, Babatunde Fashola, also lamented on drastic cuts in the capital votes of budget envelopes earmarked for the two sectors.
“The National Housing Project is very much on course but the problems of paucity of fund through drastic budget slash and outstanding liabilities of N191.75billion, need to be urgently looked into.
“In 2022 fiscal year, while the total capital votes for both Works and Housing Components of the Ministry was N441.18billion, the proposal made for 2023 fiscal year is N146billion.
“Out of the proposed N146billion as capital expenditure for the entire Ministry in 2023 fiscal year, only N45billion is earmarked for Housing sector as against N130.4billion appropriated for it in 2022.
“For the works sector, the disturbing scenario is also playing out with N110billion earmarked for capital expenditure in 2023 fiscal year as against N163billion envelope given in 2022.
“Out of the N956billion outstanding liabilities, the federal government is owing contractors handling the National Housing Scheme N191.75billion while the remaining balance of N765billion is owed contractorls handling road projects across the country from the total contract value of N10.4trillion”.
State House dose of the slash
Making the capital votes slash a non – discriminatory one across the various MDAs, was complaint also made on it by the Permanent Secretary of State House, Tijjani Umar on Thursday last week during 2023 budget defence session with the Senate Committee on Federal Character and Intergovernmental Affairs.
Tijjani Umar in his submission before the committee headed by Senator Abba Moro ( PDP Benue South), said: “The total budget size of N21.137billion for State House in 2023 fiscal year, is N19.010billion less, when compared to the N40.148billion appropriated for it in 2022 fiscal year”.
He lamented further that 2023 being an election year, the sum of N1.96billion earmarked for vehicle purchase was inadequate just as provision of N59million for maintenance of State House Lagos Complex and Guest Houses, is grossly inadequate.
“The provision of N59million for maintenance of State House Lagos Complex and Guest Houses is inadequate, requiring an estimated sum of N644million for upgrade of the facilities.
“It is also instructive to note that the provision of N1.96billion in the 2023 proposal for vehicle purchase, would still be inadequate to meet existing requirements, 2023 being an election year which entails frequent travels with associated costs as well as the replacement of vehicles by incoming administration”, he said.
The lamentation took a different dimension of low releases from the slashed capital votes when the Minister of Transportation, Mu’azu Jaji Sambo, appeared before the National Assembly joint committee on Transportation last week Friday.
He said: “Out of the N147, 549, 080, 677billion total capital appropriation of the Ministry for 2022 fiscal year, only N52,134,727,253.22billion, representing 35.33% had been released to date with attendant incapacitation, as far as implementations of capital projects are concerned”.
Any way out ?
Were revenues generations by relevant agencies, meeting up to targets from time to time, relevant committees of the National Assembly, would have attempted to jerk up the grossly slashed capital votes of the various MDAs, but with the problem of low revenue generation confronting the country, the proposals are most likely to be adopted as presented.