House of Representatives

*propose 40% annual budget for capital projects

*Bill passes second reading

*prescribes 5 years jail term, N5 million as punishment for offenders

By Levinus Nwabughiogu

Nigeria may soon witness an increase in economic and infrastructural development should a bill seeking to compulsorily appropriate 40% of the annual national budget for the capital project eventually be passed into law and assented to by the President.

The Bill is codenamed “Economic Stimulus bill”.

For many analysts, Nigeria has a bad reputation in underfunding and implementing capital projects while scoring a first in the implementation of recurrent expenditure in every fiscal year.

Also read: 2020 Budget: Senate fails to meet target, to now consider report Next Week Tuesday

This has rather slowed down the infrastructural development of the country which many believe is not healthy for the future.

Jolted by this reality, the House of Representatives yesterday proposed a bill to chiefly make the provision of infrastructure such as motorable roads, good hospitals, schools, among others a compulsory venture for government.

Interestingly, the bill titled “A Bill for an Act to Provide that 40% of Nigeria’s Annual Budget should be earmarked for Capital Projects in the next (10) years; and for Related Matters (HB.4)” successfully scaled through a second reading at Wednesday plenary.

Sponsored by the Speaker, Femi Gbajabiamila, the appropriation of 40% to infrastructure and other capital projects as proposed by the bill will be sustained for the next 10 years before it will be reviewed.

Obtained by our correspondent, the details of the bill indicated that a jail term of 5 years or a fine of N50 million or both as punitive measures await any offenders.

The details read thus: “Be it enacted by the National Assembly of the Federal Republic of Nigeria as follows:

“Without prejudice to any contrary provision as contained in any Act or in any other enactment or law, 40% of the total annual budget of Nigeria for the next 10 (ten ) years shall be earmarked for Capital project commencing from 2017 fiscal hear

“Upon the commencement of this Act, the Accountant-General of the Federation shall submit quarterly reports to the National Assembly in respect of the performance of the capital budget. The reports shall be submitted within two weeks after the end of a corresponding quarter

“The National Assembly shall within two weeks of the receipt of the Accountant-General’s reports considers same and if not satisfied with the performance, pass appropriate resolutions that will ensure full implementation/performance of the capital budget and the resolutions shall be implemented by the President.

“This Act shall be in force for a period of ten years after which it will be reviewed by the National Assembly.

“Any person who performs any act or does anything or refuses, fails and/or neglected to carry out his lawful duties with intention to frustrate the implementation of this Act is said to have committed an offence; and upon conviction shall be liable for five years imprisonment or a fine of N50, 000,000 (Fifty million Naira) or both

“This Bill may be cited as Economic Stimulus Bill, 2019″.

At the plenary on Wednesday, members of the House took turns to debate the general principle of the Bill, giving an overt endorsement of it without any dissenting views.

They underscored the importance of infrastructural development.

For instance, the minority leader of the House, Rep. Ndudi Elumelu from Delta State while moving the motion for the bill to be read the second time on behalf of the Speaker who presided over the plenary session said that the bill if passed into law will correct some imbalances in what is provided annually for capital project.

According to him, the World Health Organization, WHO recommended 10 per cent of the annual budget for capital projects.

He, however, regretted that Nigeria has never complied with that recommendation.

He said that the 40% should cut across all the ministries and sectors of the economy, saying that ” by that, we are addressing the imbalance”.

He added that “It will ensure the dividends of democracy”

For Dachung Musa Bagos from Plateau State, members of the House will be proud of the bill if, at the end of the day, 40% is allocated capital projects.

According to him, without bills such as that to direct the executive, the most budgetary allocation will go to the recurrent expenditure.

“Make sure 40 % will be allocated to the budget, otherwise budget will end up in debt service”, he said.

For Rep. Babatunde Salem from Osun State, one challenge Nigeria has always is a budget deficit.

While he encouraged borrowing to fund the budget, the issue has always been the judicious use of the money.

“It is not wrong to borrow but the issue is what do you do with the money”?

For the deputy minority leader, Rep. Toby Okechukwu from Enugu State, the bill presupposes that 40% of the annual budget be set aside for infrastructure for the next ten years.

He asked the House to be more concerned with the challenges, stressing that it is not out place to have the budget that is 60 % capital projects and 40 recurrent expenditure.

“The challenge is not the appropriation but what do we do with the money that is appropriated? The recurrent deals with civil servants while the capital deals with infrastructure”, he said.

According to him, there are about 2 million Nigerians who are civil servants who are taken the large chunk of the budget.

“This is what the recurrent is trying to address. The 2 million are taken a higher chunk of the budget while the larger proportion of the country gets less. The 40 % for capital is okay but how do we raise the funds? Appropriation is one thing but actual releases is another thing”? He asked.

Rep Segun Odebumi from Oyo State in his own intervention added that the bill was a laudable one but required assurances of adequate funding.

He stated that implementation may not the problem but the availability of funds and the political will of the president to deliver.

Giving the synopsis of the bill, the sponsor, Gbajabiamila said that the bill was to stimulate socio-economic growths.

He said: “Capital project refers to long-term, capital-intensive investment for the purpose of building upon, adding to, or improving an existing asset.

“Capital projects are known for their large scale and large cost, relative to other investments that involve less planning and resources.

“The elements of a capital project can be extracted from the definition above to wit: it is usually for a long term; it is capital intensive with a view to build on an existing project, or add to or improve on it.

“Capital Expenditure simply refers to the funds earmarked for the execution of Capital Projects.
Capital expenditure and capital projects are very important to any economy. Capital Expenditure motivates an increase in investment. Investments lead to production capacity increase and production capacity increase gives rise to increase in goods and services produced in the individual economy activities, which when aggregated, will on the long run increase the Gross Domestic Products.

“Capital projects attract more investments, create jobs and reduce unemployment. Capital projects lead to the empowerment of more people. More people will pay tax to the government thereby empowering the government with more revenue to reinvest in new projects

“Arising from the above and the current economic challenges confronting us as a people, coupled with the decaying state of infrastructure across the country, we cannot undermine the importance of this Bill which seeks to provide 40% of our annual Budget for a capital project for the next ten years.

“The purpose of the Bill is for us to use our legislative instrument, having been empowered by the Constitution, to support the Federal Government to improve on the nation’s infrastructure and drive the economy for the next ten years.

“The Bill consist of 5 sections.
Section 1 seeks to provide that 40% of the nation’s budget be earmarked for a capital project for the next ten year.

“Section 2 creates some forms of the monitoring process to ensure implementation and enforcement by providing that upon commencement, the Accountant General of the Federation shall submit quarterly reports to the National Assembly on the performance of the Capital Budget and must be submitted within two weeks after the end of a corresponding quarter.

“Under subsection 2 of section 2, the National Assembly shall within two weeks consider the report of the Accountant General of the Federation and if not satisfied shall pass the necessary resolution to ensure implementation and performance by the President.

“Section 3 provides that this Bill shall be in force for a period of ten years after which there shall be a review by the National Assembly.

“Section 4 makes provision for a penalty of 5 years imprisonment or a fine of N50 million or both for violation or any attempt by any person to frustrate the implementation of the Bill when passed. This stringent punitive measure suggests that the current state of infrastructure and economy are not such to be handled with kids gloves.

“Under section 5, this Bill is cited as “Economy Stimulus Bill”.

“I call on you my Honorable Colleagues to consider the passage of this bill to stimulate the economy for the empowerment of all those we represent. Thank you.

While putting the question after the debate, Gbajabiamila added that “It is simply an economic stimulus bill. for the Economy. I make bold to say that no nation in the world will be developed when you have 70% of recurrent expenditure. I want to thank everybody that has contributed to this bill. By the time we plug all the loopholes, you will be surprised at how much money we will have to funds the projects.”

The bill was later referred to the House Committee on Finance and Appropriation for further legislative inputs.

Vanguard