By Omoh Gabriel
Indication emerged yesterday that the 2009 Budget may have performed poorly as the Minister of State for Finance, Mr. Remi Babalola, admitted that only 50 per cent of the capital budget was released as at the end of October 2009, meaning that actual performance of the budget is below 50 per cent, as money released are usually not fully utilised.
A statement from the Minister of Stateâ€™s office confirmed that â€œ50 per cent of the 2009 capital budget has been released to Ministries, Departments and Agencies (MDAs) of the government as at the end of October 2009.” He also stated that â€œthe Federal Governmentâ€™s plans to deregulate the oil sector would bring in more investments into the sector and the economy.â€
Babalola disclosed that â€œthere has been accelerated utilisation of the budget funds by the MDAs in the last two months.â€
He added that the â€œcapital budget implementation was expected to rise to 90 per cent by December 31, 2009.”
He said: â€œThere have been substantial budget releases to the MDAs, since March 2009. About 50 per cent has been released so far. The releases and utilisation of the funds are part of measures to ensure the realisation of the deliverables in the 2009 Appropriation.â€
The minister confirmed an increase of 31 per cent in capital expenditure for 2010, with power accounting for 12.4 per cent.
On measures to ensure proper implementation of the 2010 budget, Babalola stated that â€œministers were required to present action plans on how the funds would be utilised.â€
On oil sector deregulation, the minister disclosed that it had become necessary in order to ensure competitiveness and productivity.
â€œEconomic performance is hinged on competitiveness and productivity. I am yet to see anyone that says it doesnâ€™t make sense for us to make the economy competitive and productive. We need to remove bureaucracy and ensure we get value for money in order to be competitive and productive,â€ he added.
He assured that the oil sector deregulation would yield dividends for the country in terms of investment inflow. Oil remains our biggest blessing but the sector also faces enormous challenges. These challenges have discouraged private sector investments in new refineries and contributed to making existing refineries cost centres.
â€œOur aim is to maximise the opportunities in the industry, grow the downstream and deregulate the sector completely. Full deregulation of the oil and gas sector appears very imperative. This will encourage investment in refining and marketing infrastructures,â€ said Babalola, who is the Chairman of the Federation Account Allocation Committee (FAAC).
Despite the early releases of the First Quarter Capital Warrants on January 9, 2009 for projects, capital budget implementation had averaged 20.68 per cent, as only N33.26 billion out of the N160.84billion was cash backed by the Office of the Accountant General of the Federation.
The National Assembly had, in February, passed a budget of N3.1trillion as against the N2.87trillion proposed by the government.
The 2009 budget is expected to provide 91 per cent of the capital vote to five key priority sectors, namely:
* N361.2 billion for Critical Infrastructure, including capital allocations of N88.5 billion for Power; N15.4 billion for Aviation; N26.5 billion for Petroleum Resources;Â N129.3 billion for Works; N35.2 billion for Transport and N48.7 billion (out of a capital vote of N 64.45 billion) for critical infrastructure within the Federal Capital Territory.
* N131.9 billion for Human Capital Development including N39.6 billion for Health; N33.6 billion for Education; N32.6 billion for MDGs Conditional Grants; N 19.7 billion for MDGs Quick Wins Projects and N6.3 billion for MDGs Capacity Building.
* N91.8 billion for Land Reform and Food Security focusing on Agriculture and Water Resources;
* N 67 billion for Security; and
* N77.12 billion on the Niger Delta, comprising N 27.12 billion for the NDDC and N50 billion on the newly created Ministry of the Niger Delta including provisions for enhancing critical infrastructure, environmental protection, youth development and grass-root empowerment.