N1.2tr cash backed for capital expenditure in 2016 — FRC report

The Fiscal Responsibility Commission (FRC), says out of the N1.58 trillion allocated for capital expenditure in 2016, only N1.219 trillion was cash backed.

According to the commission’s 2016 Annual Report and Audited Accounts obtained, on Tuesday, in Abuja, the cash backed amount indicates 97.75 per cent performance.

It said that in comparison to the 2015 capital budget, the N1.58 trillion appropriated in 2016 was N1.03 trillion more than N557 billion appropriated in 2015.

Of the N557 billion appropriated for capital expenditure in 2015, N387.3 billion was released and cash backed as against actual utilisation of N362.3 billion, indicating 65 per cent budget performance

The 2016 budget which was tagged ‘Budget of Change’ was projected at N6.06 trillion.

The 2016 FRC report stated that according to the Budget Implementation Report (BIR), N436.22 billion, N156.85 billion, N64.42 billion and N27.26 billion were released in the first, second, third and fourth batches respectively.

It also said that N487.75 billion was released as Authority to Incur Expenditures (AIEs).

The report said that the analysis of the BIR revealed that as at May 5, 2017, N1.191 trillion of the annual appropriated amounts released and cash backed had been utilised by Ministries, Departments, and Agencies (MDAs).

It said that of the amount, N173.40 billion was disbursed as at Dec. 31, 2016, while N1.017 billion was disbursed between January and May 2017.

“Out of the 40 MDAs reported upon by the Office of the Accountant-General of the Federation (OAGF), 24 had utilized more than 97.75 per cent of the amount cash backed.

“This is more than the overall average utilization rate. Five out of these utilised 100 per cent of their cash backed funds.

“Sixteen MDAs, however, utilised below the average utilisation rate of their cash backed funds.’’

The report said that implementation of the 2016 budget experienced some constraints which resulted from late passage of the budget and revenue shocks.

Other constraints were uncertainty in the international market and fall in oil production as a result of militancy in the Niger Delta region.

It added that some MDAs experienced delays in their procurement processes or were unable to access their funds.

In all, it said that the capital budget achieved 75.03 per cent performance which when compared to previous years was quite laudable and should be sustained.

It, however, said that to improve on the level of capital budget performance, contract budgeting and award should be consistent with the Medium Term Expenditure Framework (MTEF).

This, it said, was to avoid inconsistency in budgetary provisions for budgets which leads to abandoned projects in the country.

It also said that selective capital expenditure releases in the implementation process should be adequate to ensure meaningful project execution.

The FRA 2007 was enacted to promote prudent management of the nation’s resources as well as ensure long-term macroeconomic stability and transparency in fiscal operations of the national economy. (NAN)

Update news