Hypocritical economic diversification

to limit bank lending,” he said.

According to him, revenue from higher oil prices is limited by net losses from retail fuel sales, while non-oil revenue remains below expectations, with yields from tax administration measures—including the Voluntary Asset Income Declaration Scheme (VAID) and increased tax audits—yet to fully materialise.

Mati said that a coherent set of policies to reduce vulnerabilities and increase growth, there is urgent need for specific and sustainable measures to increase the currently low tax revenue, avoid new tax exemptions and ensure that budget targets are adhered to even in an election year. Budget tardiness

A Lthoughvarious administrations have always been reactive to observed yearly budget irregularities, particularly the recurring repetition of items, ambiguous terms, fictitious project items and the associated bogus allocations, the outcome of the implementations have always justified the allegations.

But the failure to implement capital projects has raised more concerns, especially as the budget component has in the last three years been financed by borrowing, which attracts huge costs running into trillions of naira and calling to question the claims on economic diversification.

The development, which has been described as flagrant display of incompetence, indolence and unending tardiness, caused by late preparation and passage of the yearly budgets, as well as unnecessary lengthy procurement processes, has resulted to incomplete implementation of capital budget. The latest is that N118 billion meant for capital projects for 2017 fiscal plan was returned.

Fiscal governance campaigners, in a chat with The Guardian, said it is a show of irresponsibility for the country to borrow huge funds in the name of capital expenditure items, with associated interest rates, only for the government to keep the fund idle, when the country is littered with parlous infrastructure.

The country’s first Professor of Finance and Capital Markets and Chair, Banking and Finance Department, Nasarawa State University Keffi, Uche Joe Uwaleke, said it is ridiculous that the problem is not usually associated with recurrent spending, as agencies strive to exhaust whatever is allocated to them.

There is observed lengthy procurement process that takes up to six months, in some cases, before a contract can be awarded, causing a snag in the ease of doing business as regards the facilitation of diversification efforts. If the government is serious, this has to be looked into to reduce the chances of having unspent funds by critical agencies of government that require them.

But Uwaleke warned that the late release of funds for implementation of capital projects would also continue to hold the economy down. “The way forward requires amendment of the procurement Act, timely passage of the appropriation bill and release of funds. This also speaks to the need to diversify the revenue base of the government, especially ramping up tax revenue.”

The Executive Director of Abuja-based OJA Development Consult, Jide Ojo, said it is ironical that the little money earmarked for capital projects is not expended in a 12 calendar month budget cycle, necessitating the ugly scenario where the money, which, in the first place, is inadequate to fix infrastructure, is returned to the treasury as unspent funds., querying the claims of infrastructure development for diversification.

“This smacks of incompetence, indolence and incapacity. Imagine Ministry of Works, Power and Housing returning a whooping N66bn when there is yawning infrastructural needs. In fact, many contractors are being owed huge sums of money. This is incredulous,” he said.

A lawyer and fiscal governance campaigner, Eze Onyekpere, was concerned about if such money was actually returned, as a return of unspent fund would actually follow a proper channel, which is an official quarterly or yearly budget implementation reports. Noting that the trend is not the way diversify and stabilize economy.

“The fact that money was available, but had to be returned, tells a lot of story about capacity and management issues. Coming at a time the government complains of lack of resources to implement the budget, it is an unfortunate development which needs to be investigated, especially to confirm the reason(s) for the return of the monies.

“I agree that money must not be spent simply because it was budgeted. I also that procurement challenges may also hamper financial expenditure, particularly if the background technical studies and assessments have not been done before appropriation. But these happen when there are fundamental challenges with the budgeting process,” he said.