Acting President Yemi Osinbajo has submitted a virement proposal of N135.6billion to the National Assembly. The money is meant to cover projects across many MDAs, particularly the Ministry of Power,Works and Housing. The acting President had last month signed the 2017 budget, after approval had been given by President Muhammadu Buhari.
Virements are movements of budgetary resources between line ministries, programs, policy areas, expenditure categories or line items. It provides limited standing authority to the executive to make adjustments to the budget to respond to uncertainties.
However, it does not affect the total level of budgeted expenditure and does not fundamentally alter the composition of expenditure appropriated by the legislature. Simply put, a virement is merely shuffling of items within a budget. Moving funds to sectors that need pressing funding. Virements are usually employed to deal with the uncertainties that arise during the course of budget execution and result in the need to vary the allocation of government expenditure.
Why the proposed Virement
The acting president made a request for the re-allocation of N135.6 billion of funds in the budget to cover projects across many MDAs, particularly the Ministry of Power,Works and Housing. As reported, the sum of N46,004,049,292 is to be vired within projects of Federal Ministry of Power, Works and Housing while N66 billion is to be vired within projects of Federal Ministry of Transportation.
Recall that the virement was a condition for securing the assent of the Acting President to the N7.441 trillion budget before it was signed into law.
According to the letter sent to the National Assembly, N3.1 billion will be re-allocated from the ministry of works and housing; N33 billion from the ministry of transportation; N14 billion from the office of the secretary of the government of the federation; N5 billion from the office of the national security adviser, and N5 billion from the ministry of science and technology. In addition, N3 billion will be re-allocated from the ministry of defence; N3 billion from the federal capital territory administration, and N 1 billion from the ministry of health, among others.
Recall that the 2017 budget which was signed into law in June was set at 7.44 trillion naira. It has an oil benchmark of $44.5 per barrel as against $38 in 2016 and has a naira benchmark of 305 per dollar, as against 197 in 2016. Also, the budget, earmarked 30.7% for capital expenditure “to pull the economy out of recession”.