Federal Government has blamed the delay in execution of capital projects as captured in the N6.06trillion Budget 2016 procurement procedure and low level revenue generation.
Minister of Budget and National Planning, Sen. Udoma Udo Udoma, who made the disclosure to the Senate Committee on Appropriation, said the procurement procedure problem arose from the six months requirement for procurement process on execution of new projects as provided for, in the Public Procurement Act.
“No new project is ripe for any capital releases because of the six months of procurement process including advertising and so on.
It is only existing projects which already met the criteria for the various procurement stages that are qualified for capital releases”, he noted.
On the problem of low revenue, he said the overall revenue for the first quarter, was about 55 per cent of the projected revenue expectations which according to him, was caused by agitation in the Niger Delta by militants and earlier difficulties faced by importers in accessing foreign exchange.
“The bulk of the problem of low revenue generation came from militant agitations in the Niger Delta which affected oil production which prevented us from reaching the 2.2 billion barrel even though the price is going up.
At a point production went down to one million barrel but right now, we have been informed by the Minister of Petroleum that it is going up again to about N1.9 billion barrel but that, the revenue will come in three months time because the generation of today is not the revenue of today but of three months time”, he said.
He however assured the committee that many of the new capital projects captured in the budget would be executed , since duration for their implementations has been extended to May next year by the National Assembly, more so, with revenue going up now.
“The National Assembly gave us till May next year to carry out the capital expenditure and we still have 10 months of capital spending to do.
Nevertheless, out of the capital for MDAs, out of N1, 587, 598, 122, 028, we have released N235, 916, 566, 642 ( 15 percent), he added.
In personnel releases, the budget was N1, 723, 819, 398, 198 but was we released was N871, 459, 760, 939 which comes to about 50 percent.
This is the way it should be because we are already in July and we have done six months which is half of the year.
For overhead, the budget is N218, 368, 364, 886 and we have released N52, 913, 047, 226 (25 percent)”, he explained.
The committee chairman, Danjuma Goje in his remarks said the committee will in the remaining 10 months for capital budget implementation, continue to assess the budget performance.