The National Assembly has expressed grave concern over the disproportionate allocation of funds between Recurrent and Capital Expenditures and the poor fund releases for capital projects under the 2024 Budget.
In a statement issued to newsmen yesterday in Abuja by Chief Kayode Odunaro, Senator Solomon Adeola‘s media adviser, the National Assembly urged urgent action to address the issue.
At a joint session involving the Senate and House Committees on Appropriations and the Presidential Economic Team to discuss the 2025 Appropriation Bill, Senator Solomon Adeola and Honourable Abubakar Birchi, chairmen of the Senate and House Committees, respectively, emphasised the importance of increased funding for capital projects.
They noted that such funding is essential for citizens to feel the tangible impact of government programs, as recurrent expenditure primarily benefits a small portion of the population.
According to a report presented by Mr Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, the overall performance of the 2024 Budget stands at 43 per cent. While Recurrent Expenditures have achieved 100 per cent performance, Capital Expenditures lag significantly at only 25 per cent.
Senator Adeola called for a drastic reduction in the recurrent to capital expenditure ratio, suggesting a shift from the current 80:20 ratio to at least 60:40.
He stressed that implementing capital projects is a key driver of economic growth and directly impacts citizens‘ lives.
“Capital releases to MDAs are the major drivers of economic activities within the nation. The non-release of funds for capital projects is a significant issue in the 2024 Budget’s performance. Efforts must be made to release these funds to prevent abandoned projects and ensure the success of the president‘s Renewed Hope Agenda,” Senator Adeola stated.
He further cautioned that MDAs should not appear for the 2025 budget defence with records of non-performance in their core capital mandates. He urged the Ministry of Finance to expedite the release of funds for ongoing projects.
Hon. Birchi agreed, highlighting the importance of capital projects in education, healthcare, roads, and other social infrastructure sectors.
He suggested that funds allocated for debt repayment could be restructured in the short term to prioritise capital projects.
“Most items under recurrent expenditure, implemented at 100 per cent, only impact about 10 per cent of the population. Capital projects, however, directly benefit the majority of over 200 million Nigerians by providing essential social infrastructure,” he stated.
Responding, the Minister of Finance acknowledged outstanding capital releases awaiting funding but cautioned against unsustainable spending practices that could harm the economy.
The Minister of Budget and National Planning, Alhaji Abubakar Bagudu, explained that the high recurrent expenditure reflects the nation’s developmental challenges, including military campaigns against insecurity.
He emphasised that addressing insecurity is vital for boosting agricultural production and economic activities.
Also, the director general of the Budget Office, Dr Tanimu Yakubu, attributed the sizable recurrent expenditure to legacy issues inherited by the Tinubu administration, such as unpaid pensions and gratuities, which have now been addressed.
He suggested that the National Assembly consider legislation to cap recurrent expenditure in future budgets.
The meeting, attended by the Minister of State for Finance, Dr Doris Uzoka-Anite, and permanent secretaries from the Ministries of Finance, Budget, and National Planning, also discussed the impact of tax waivers and holidays on government revenue.
We’ve got the edge. Get real-time reports, breaking scoops, and exclusive angles delivered straight to your phone. Don’t settle for stale news. Join LEADERSHIP NEWS on WhatsApp for 24/7 updates →
Join Our WhatsApp Channel
