No New Projects In 2013?
Mon, 16/07/2012 ? 12:46am | LEADERSHIP EDITORIAL Editorial
An interesting glimpse into next year?s budget has been given by the director-general, Budget Office of the Federation, Dr. Bright Okogu. Last week, at a consultative meeting on the 2013 budget with the organised private sector and civil society organisations, she said no new project would be appropriated for. It is a clear departure from the usual practice where successive governments have proposed new projects on a yearly basis which later end up as white elephant projects.
Priority sectors for 2013 would be security, which claimed 24 per cent of this year?s appropriation. Others that would receive 80 per cent of the country?s capital vote with security next year are power, works, agriculture, Niger Delta, aviation, health, education, transport and job creation, according to the DG. Also, the federal government would approve proposals by its ministries, departments and agencies (MDAs) ?based on their internal rate of return and level of completion?. MDAs with huge debts might not receive capital votes in 2013 because their allocations would be used to pay off their debts. Paucity of funds, according to the DG, has made it imperative for the decision on new projects to be taken.
Not many would believe the rhetoric of dwindling resources in a country that claims to be growing faster than projected. Even then, the no-new-project decision is a double-edged sword. It would cut down the excruciating debt burden, but it also has the potential of slowing down development and keeping the country?s infrastructure many years behind. The cost clearly would not be the same as they were budgeted. Many of the abandoned projects were, at any rate, foisted on the masses by political expediencies, especially the 2011 election, corruption and inconsistent government policies.
To date, about 630 MDAs? projects requiring N7 trillion are yet to be actualised. If inflation rates are factored in, about N10 trillion would be needed. That is more than double the total appropriation of N4.6trn in this year?s budget. Much as the fiscal consolidation efforts need to be sustained, prudence in the management of public financial resources does not admit of piecemeal solution. Given resource constraints, we propose that the federal government think through cutting down on wastages arising from political patronage and check corruption in all facets of the economy. Also recurrent expenditure, which was reduced from 74.4 per cent in 2011 to 71.5 per cent in 2012 should be reduced further in 2013.
Perhaps, there should be a combination of measures such as rationalisation of agencies, recovery of excessive claims on subsidy and cautious benchmark of oil prices beyond the unrealistic $75 per barrel that this year?s budget was made. The federal government also needs to come clean on what constitutes the constituency projects of members of the National Assembly and peg the expenses of ostentatious living to avoid all illegitimate and wasteful expenditures in the 2013 budget.
