By Omoh Gabriel, Business Editor
LAGOS — Budget 2009 in the first quarter of the year recorded a paltry 20 per cent implementation as Ministries, Departments and Agencies (MDAs) failed to fully utilise the funds released to them to execute ongoing capital projects, a budget monitoring by the government has revealed.

A statement from the Minister of Finance signed by his Special Assistant on Communications, Ms Deborah Chinwe Okafor, said “In the first quarter of 2009, N200.37 billion was released, comprising N187.68 billion for ongoing capital projects and N12.69 billion by way of Authority to Incur Expenditures (AIEs).

MDAs’ budget execution  20%

“Despite the early releases of the first quarter capital warrants on 9th  January 2009 for on-going projects, capital budget implementation averaged 20.68 per cent at N33.26 billion out of the N160.84 billion cash backed by the Office of the Accountant-General.

“However, some MDAs, such as the Federal Ministry of Works, and the Ministry of Foreign and Inter-Governmental Affairs had high utilisation rates of 71.68 per cent and 64.19 per cent respectively.

“In an attempt to improve budget implementation rates, the Budget Office of the Federation organised a workshop in March to improve the MDAs’ executive capacity.

”Recent data from the Office of the Accountant-General of the Federation on MDAs’ utilisation of capital funds in April shows improvement from an average of 20.68 per cent in the first quarter to an average of 52.72 per cent as at end of April 2009.

”It is expected that overall budget implementation performance should further improve over the rest of the 2009 fiscal year,” it added.

Oil receipts fall by N52bn

According to the report of the budget monitoring  by the Ministry of Finance “the Federal Government’s first quarter revenue projection in the 2009 budget fell short of target by N182.24 billion as actual oil revenue fell short by N52 billion or 21.86 per cent.

“Even in the face of this, ministries, department and agencies of the Federal Government under-utilised the fund released to them, thus resulting in low performance of the 2009 budget in the first quarter of the year.

“Aggregate actual Federal Government revenue under-performed by N182.24 billion, or 32.18 per cent against the budgeted amount of N566.30 billion.

”Actual Federal Government oil revenue receipts underperformed by N52.97  billion, or 21.86 per cent against the projected N242.27 billion; non-oil tax revenue underperformed by N53.60 billion compared to the projected level of N144.20 billion; and other revenues fell short by N75.67 billion compared to projected aggregate of N179.83 billion”.

Hopes on oil output, prices

According to the minister’s assistant, “as oil output and prices recover, oil revenues are expected to improve, going forward.

”Similarly, non-oil revenue should improve in subsequent quarters with increased efficiency in the collection of some taxes which are seasonal in nature.

”Finally, government is commencing a process audit of revenue-generating agencies, the outcome of which should help enhance non-oil revenue,” she added.

2009 better than 2008

Giving insight into the performance of the economy in the first three months of the year, the statement said: “In the first quarter of 2009, preliminary indications suggest that economic growth was quite favourable compared to the same period in 2008, especially in the context of global economic slowdown.

Interest rates high

”Headline inflation on a year-on-year basis reached 14.6 per cent. Interest rates remained high with the weighted average inter-bank call rate rising to 22.15 per cent.

”The DAS/WDAS rate depreciated by 25.3 per cent year-on-year to N147.7/US$, the BDC rate also depreciated by 46.5 per cent to N174.32/US$ and external reserves fell to US$47.08 billion by the end of March 2009, reflecting adjustments to adverse terms-of-trade shocks.

NASS gets report

According to the statement “the Federal Ministry of Finance recently released the 2009 First Quarter Budget Implementation Report, in line with Section 30 of the Fiscal Responsibility Act 2007.

”The report has been forwarded to the Fiscal Responsibility Commission, the Joint Finance Committee of the National Assembly and other stakeholders. It was also presented to the Federal Executive Council at its last meeting on Wednesday, June 17, 2009.

“As the Budget is a tool for holding the Ministries, Departments and Agencies (MDAs) of Government responsible for the expenditure and revenues over which they exercise control, it is in this spirit of promoting transparency and accountability in public financial management that Quarterly Budget Implementation Reports are prepared and published,” it added.