The Federal Government is already making excuses just hours after President Buhari signed the 2016 Budget. The Budget Minister Senator Udo Udoma disclosed to mainstream news reports that it will not be possible for the government to fully implement the 2016 budget.
“Our aim is 100 percent implementation because the budget is a law that must be implemented. But the reality is that we may not achieve this because we are starting late,” Udo Udoma
The Buhari led government has often been accused of making excuses after excuses rather than rolling up its sleeves and getting to work. With about 7 and a half months left to go till the end of the year, Nigerians will be wondering why they cannot fully implement a budget that they claim will stimulate the economy. The government earmarked about N1.8 trillion on capital expenditure in the current budget and many Nigerians will be waiting for a full implementation of its budgetary plans.
Unfortunately, this is not the first time that government officials will be failing to fully implement capital expenditure (even though they fully implement recurrent expenditure). In an article featured in Nairametrics a few years ago, we highlighted how Nigeria has failed to meet up 100% capital expenditure (see chart below).
Back in 2014, former Finance Minister Ngozi Okonjo Iweala also attempted to explain why they could not fully implement budgetary allocation for capital expenditure.
“ In the third quarter we could not cash back a N100 billion of third quarter capital and we have not been able to release fourth quarter capital.Nevertheless, we have managed to keep most of our priority projects going with the support of SURE-P resources. Of the N1.12 trillion in the budget for capital, the sum of N610 billion has been released but we were only able to cash back 465 billion of this amount. And about 84 per cent has been used by MDAs as at the end of October.”
With the latest admission that the budget might not be fully implemented, we have little faith that it will bring the kind of success Nigeria expects. There are also a lot of reasons why this is plausible. For example, the government hasn’t yet figured out how it is going to raise enough cash to pay for recurrent expenditure (which is loves to implement) let alone capital expenditure. Various options have been put forward, however none is cast in stone as the preferred funding option. Considering that cash is not yet in place to fund much of the capex budget it probably will take them months more to secure any major external funding.
The current government has also shown itself to be quite sloppy and slow in executing programs and projects so we do not believe that they will execute some of their plans even if cash becomes available. As things stand the capex budget is already a failure and only time will confirm.
