By BUKOLA IDOWU, OLUSHOLA BELLO and CHIKA IZUORA |
The 2021 budget of the federal government contains 316 duplicated projects valued at N39.5 billion, a report by BudgIT, a civic-tech non-profit organisation in Nigeria has alleged.
According to the report titled, ‘Demanding Budget Reforms for Resource Optimization’, which was posted on its website yesterday, the following top 10 agencies of government had duplicate of projects: Federal Ministry Of Health(115); Federal Ministry Of Information & Culture – headquarters (40); Federal Ministry Of Agriculture And Rural Development headquarters (25); Fed. Min. of Education – headquarters (23); Federal Ministry Of Science And Technology headquarters (17); Fed. Min. of headquarters (17); Federal Ministry Of Environment – headquarters (13); Federal Ministry of Power – headquarters (11); Federal Ministry of Labour and Employment – headquarters (11), and Federal Ministry of Water Resources – headquarters (10).
Describing the development as disturbing, BudgIT said its investigations further revealed that 115 of the duplicated projects were from the Federal Ministry of Health.
The Lagos-based firm disclosed this in a statement issued by its Communications Associate, Iyanu Fatoba, which was titled, “BudgIT highlights corruption loopholes in the budget process, calls for urgent budget reforms.”
The statement noted: ‘‘We analyzed all 19,036 capital projects in the 30 2021 federal budget out of which 316 duplicate projects were detected within 74 federal agencies spread across 23 ministries and the Presidency with cumulative allocation of N39.5billion. For example, the Nigeria Institute Of Oceanography and Marine Research had an allocation of N300m for “Supply and Installation Of All-in-one Solar Street Light, 10,000 Lumens With Lithium Battery Pri Ats Across The Six Geo-political Zones”, yet the National Agriculture Seeds Council received an allocation of N400m to implement the same “Supply and Installation Of All-in-one Solar Street Light, 10,000 Lumens With Lithium Battery Pri Ats Across The Six Geopolitical Zones.
‘‘Worth noting in this specific instance is that it is outside the mandate of both agencies to provide solar street lights across Nigeria. Another example is the Border Communities Development Agency (BCDA) HQTRS which received an allocation of N237.5m for an ongoing project: “Construction Of Bridge Across River Rima From Bubuce To Augie LGA Kebbi North Senatorial District Kebbi State” whereas the Federal Ministry Of Environment Headquarters also got an allocation of N150m for to start a new project for “Construction Of Bridge Across River Rima From Bubuce To Augie LGA Kebbi North Senatorial District Kebbi State.
‘‘In yet another manifestation of duplicated projects, we observed 195 instances amongst the 316 duplicates where 31 otherwise unique ERGP budget codes were assigned to more than one project. The risk inherent in this manifestation is that once one project is reported as completed, the duplicate project(s) with the same ERGP code can potentially be assumed to be completed even though it may or may not have been implemented. As an example, budget code, ERGP78712459 was allotted to “Special Training And Empowerment On Transport And Logistics To 12 Senatorial Zones And 40 Federal Constituencies” with a N3.26bn allocation, in the Nigerian Institute of Transport Technology whereas the same budget code ERGP78712459 was also allotted to a smaller project “Renovation Of School Blocks In Nkum Ekajuk Ukelle And Okpoma In CRS” with a N250m budget allocation within the same agency.
‘‘Recall that in June 2020 our OpenTreasury 32 report analyzing government expenditures detected that over 2,900 payments totalling N51bn paid into personal accounts in FY 2019 as opposed to being paid to corporate contractors. Duplicate projects in the federal budget could create a wide loophole for corrupt diversion of public funds,’’ the further report reads in part.
Meanwhile, BudgIT also said that 25 states of the federation suffered decline in capital expenditure as 63.27 per cent of states budget went into recurrent expenditure and loan repayments.
To this end, only 11 of the 36 states spent up to 50 per cent of their budgeted capital expenditure for 2019, an indication that the affected states concentrated less on social infrastructure.
According to data from BudgIT themed, ‘Patterns of States’ Expenditure’, report for 2019 and released yesterday, eight states could not meet their recurrent expenditure with their available revenues which include; internally generated revenue(IGR) and Gross FAAC, thereby, creating a risk for public debt build-up.
The report showed that cumulative actual expenditure for all 36 states grew by 2.73 per cent from N5.12 trillion to N5.26 trillion between 2018 and 2019 fiscal years while actual recurrent expenditure and loan repayments grew by 4.75 per cent from N3.17 trillion to N3.33 trillion within the period.
BudgIT noted that the rising nature of Nigeria’s sub-national government expenditure is expected to yield economic growth, but over the years, analysis of states’ fiscal data has shown that growth in public spending has not translated meaningfully into economic performance as there’s still a high rate of unemployment, decaying infrastructure, and worsening poverty rate.
Furthermore, 31 states gave more attention to their recurrent expenditure than capital expenditure.
Kaduna State had the highest capital expenditure implementation rate spending N97.5billion of the N152.3 billion, while Cross River had the lowest implementation rate. The state had spent just 2.78 per cent of the N1.04 trillion it earmarked to spend on capital expenditure in 2019.
“Spending pattern is not sustainable as this has opened gaps in providing quality healthcare services and educational systems, thus slowing down social development as well as growth in other key areas of the economy.
“State governments’ recurrent costs have increased significantly over the years with only a small portion of collected revenue and loans dedicated to meet capital expenditure. In 2019, 36.73 per cent or N1.93 trillion of the N5.26 trillion total expenditure in 2019 was dedicated to capital expenditure while 63.27 per cent or N3.33 trillion went to recurrent expenditure and loan repayments,” it pointed out.
Year on year, between 2018 and 2019, it stressed that actual expenditure on capital projects for all 36 states reduced by 0.57 per cent, from N1.94 trillion to N1.93 trillion.
This, Budgit said, is a worrying sign as Moody’s Investors Service estimates that Nigeria’s infrastructure, which is significantly behind those of emerging market peers, needs an estimated $3trillion over the next 30 years to close the gap.
It noted that this is equivalent to spending N38 trillion per year for the next 30 years.
The civic organisation called on the government to audit security spending and close loopholes for corruption in the budget process.
Okeowo said, “2021 has been a horrifying year for Nigerians concerning security as the country combats mutating forms of crime and terror across all its 36 states; this is despite allocating over N10.02 trillion to security between 2015 and 2021. In the 2021 budget, the entire security sector’s allocation was N1.97 trillion, representing a 14 per cent increase from the N1.78 trillion allocated in 2020.”
BudgIT further observed that the little budgetary allocations provided to other sectors were plagued with various loopholes for leakages and theft of public funds.
Okeowo enjoined the federal government to urgently block all loopholes in the budget creation and implementation process.
Speaking with LEADERSHIP yesterday on the development, an economist and a stockbroker with Calyxt Securities Limited, Mr Tunde Oyediran, said the government must try as much as possible to block all the linkages.
He noted that there are some monies allocated to some projects that have become white elephant projects that will not be implementable.
He pointed out that the method of project used in the country is the problem, especially the incremental project, even as he said adding a certain percent to what budgeted for previous year should be discouraged.
Oyediran said that Budget should be based on the need for the ministry or agency, noting that government needs to be serious on recreation and duplication in the budget.
“There must be commitment on the part on people who want to implement or create the budget, ensuring that it is successful,” he stated.
Also, the managing director of Lancelot Ventures Limited, Mr Adebayo Adelek, wondered why there should be duplication in the budget when it is supposed to be made from the ground up, from every Ministry Department and Agency.
Adeleke said, “Are we saying that as big as Nigeria is and as matured as our budget planning and processing are, we still have processes that were duplicated of budgetary items in the budget plan?
“What I just discovered is that we have a bunch of lawmakers who are extremely lazy at reading. This is one thing the country is suffering from. For example most of the laws passed in spite of the public hearing, people still come out to pick holes in those laws because things will be smuggled into the document and because of the volume of the document, they cannot see it or read it.”
He stated that the basic problem of the country is in the electoral process, saying the country needs to restructure.
“If we fixed the political structure, some of the economic structure will be immediately addressed,” he added.