FG Injects N3.9trn Into Economy | Independent Newspapers Limited
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FG Injects N3.9trn Into Economy

president of the federal republic of nigeria, muhammadu buhari
Posted: Oct 12, 2016 at 4:25 am   /   by   /   comments (1)


  • To Release Funds To Productive Sectors


Isuma Mark


Abuja – Not less than 52% (N3.9 trillion) of the N6.1 trillion 2016 budget has been released and injected into the economy so far.

This was disclosed by Kemi Adeosun, the Minister of Finance, on Tuesday during a stakeholders’ forum on reducing the cost of governance.

She said as at September, N3.9 trillion had been released, meaning there has been steady injection of funds into the economy as against regular excuses of lack of finance that might prevent full implementation of the year’s budget.

She was represented by the director, special projects in the ministry at the event during which, she pointed out that only 18 percent of the funds so far released was for capital expenses while 82 percent was for recurrent expenditure.

The capital component of the budget was a massive N1.8 trillion. The minister had said close to N500 billion had been released in a previous forum.

She had in the past said that dwindling oil prices which had continually reduced government’s expected earning was impeding the prospect of properly financing the budget.

Delivering a paper titled, ‘Public Sector Financial Management Reforms as a Strategy for Cutting Cost of Governance in Nigeria’, Adeosun said the government was committed to release funds to the productive sectors of the economy, noting that it remained the highest priority.

According to her, the country’s inability to finance most of its development projects was attributable to high cost of governance in the form of large recurrent expenditure.

“In order to grow the economy and fasten the rate of growth and development, there is the need to reverse the trend,” the minister said.

She added that it was imperative for government to “allocate through the budgeting process, a larger proportion of funds for massive investment in infrastructure and other capital projects.”

Adeosun pointed out that the last two decades had seen an astronomical increase in costs associated with the running of the government in Nigeria.

She pointed out that there was a steady decline in the proportion of the budget allocated to recurrent expenditure.

The minister pointed out that the “reasons for rising cost of governance in Nigeria are issue of inflation, misuse of public funds and corruption, increase in population, extra-large National Assembly, extra-large public bureaucracy and need for accelerated growth and development.

“Others are lack of economic efficiency and lack of well-defined rules and regulations.”

All tiers of government in Nigeria spent far more than they earned, according to her, noting further that between 2011 and 2015, Nigeria had a consistent annual deficit of over one trillion naira in budget execution.

On the issue of the country’s budget, she pointed out that the country’s external and domestic debts amounted to over 30 percent of national revenue during the period.

In his welcome address, Victor Muruako, Acting Chairman, Fiscal Responsibility Commission, said, “It is indeed about prudent management of resources based on fundamental rules of action that provides the framework for evidence based budgeting.”

According to him, the past budgets were prepared not for the necessity and solutions required in the system but in such “careless manner” that agencies only fixed figures on paper.

“This is why we support the zero based budget which is replacing the incremental budget where no critical effort is made to look at issues,” he added.


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