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Nigeria needs more transparency in capital expenditures to curb corruption

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The capital projects expenditures as proposed in the 2021 federal government budget is currently marred by opacity, duplications, fragmentations and other critical issues that create loopholes for corruption and misappropriation of limited public funds, BudgIT Foundation has said.

According to a statement by BudgIT Foundation, a civic-tech non-governmental organisation, many capital projects in the 2021 budget had no specific locations in the country for the purpose of encouraging project monitoring.

BudgIT Foundation said the government had offered hope that capital projects in the 2021 FG budget will be accompanied by precise GPS coordinates to encourage project monitoring.

“Not only was this not provided in the budget proposal, but many capital projects also had no specific locations in the country,” the advocacy for fiscal transparency and accountability in budget and public finance said.

“Recall that in June 2020, our analysis of Open Treasury Portal revealed that over N50 billion of public funds were paid into personal accounts; allocating projects without defined location(s) is a loophole for this form of corruption to continue in the fiscal year 2021.”

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Gabriel Okeowo, BudgIT’s Principal Lead, noted that the Federal Government cannot afford to keep pumping the country’s limited resources into new projects while abandoned capital projects suffer inadequate investment.

“We analysed over 13,000 capital projects in the 2021 budget and observed that 55.51 percent of the total allocation for capital expenditure are earmarked for new projects, many of which may end up uncompleted by 2021. This is contrary to the hope Mr. President offered in his budget speech that ongoing projects will be prioritized in the 2021 Budget.”

“Nigeria is currently in recession and strategic spending on capital infrastructure project completion should be a priority.” Okeowo said.

The advocacy group said 0f the 13,343 capital projects it analysed, a sizable number of projects were falsely categorized as capital projects even though in reality they are not. For instance, meetings, allowances, anniversaries and celebrations were miscategorised as capital projects.

Some cases in point include; N3.3 billion for “Posting and Return Entitlement of Ambassadors and Officers” in the Ministry of Foreign Affairs, N74.5 million allocated for “Anniversaries and Celebrations” in the Nigerians in Diaspora Commission (NIDC), N40 million for “Peculiar Allowance” in Nigeria Christian Pilgrim Commission, which are all categorized as capital expenditures.

Furthermore, our analysis showed that projects between the N10 million and N50 million band represent 42.2 percent of capital projects analysed and this might be a deliberate approach to avoid elaborate procurement plans, thereby reducing broad oversight on contracting.

“We think the current structure of capital projects is too wasteful, incoherent, and grossly inefficient. Whilst capital expenditure is higher in terms of value, there is a need to properly ensure that these projects deliver optimal value for Nigeria.

“Duplication, opacity and fragmentation of line items by government agencies could present opportunities for subverting checks and balances meant for accountability.

As a case in point, two line items tagged “Nurse Tutor Training” and “Special Intervention SDG 1” were duplicated in 3 and 2 places, respectively, with different budget codes. These two line items have allocations totalling over N41 Billion earmarked for them, without specific descriptions.

“The fragmentation of capital projects is an urgent conversation that the Federal Government needs to address. In an era of dwindling revenues caused by low oil prices and the current slump in the global economy, it is important for the government to pay attention to a few projects of immense social and economic value” Said Oluseun Onigbinde, BudgIT’s Director and Co-founder.

BudgIT, therefore, implores the Federal Government to allocate more funds to capital projects that directly affect the welfare of the citizens. More importantly, it is expedient that more funds be allocated to ongoing projects to ensure the government’s commitment to their completion. Likewise, MDAs involved in splitting their Capital Expenditure to subvert checks and balances should be identified and made to face the law.

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