has disbursed a sum of N247.98 billon as capital release so far this year.
The Minister, in her presentation to the Senate on Thursday, explained that the disbursements were being made in line with strategic priorities to address infrastructure deficit and drive domestic growth.
The latest figure of N247.98bn, she noted, compares to a sum of N387bn capital spend for full year 2015.
She said that:
- N 21.6bn released for agriculture in 2016 is 4.9 times percent of N4.5bn spent in 2015.
· N118.0bn released so far to the power, works and housing in 2016 is 4.0 time the amount spent for full year 2015 which was N29.3bn.
· N24.0bn was disbursed to Transport ministry so far and that this is 3.6 time of N6.5bn spent for full year 2015.
· N9.5bn released in 2016 to Interior Ministry is 6.2 time the amount spent for full year 2015, which was N1.5bn.
· N32.7bn for Defence Ministry has been disbursed in 2016 and this is 1.3 time ofN26.1bn total release for 2015.
Adeosun said that debt owed to contractors has slowed the pace of implementation, saying however that contractors and cash call arrears totalling N5bn Joint venture funding arrears are being addressed.
The Minister said that in order to achieve the objectives of capital spending, the Ministry of Industry, Trade & Investment is also working on government’s soft infrastructure (N465.12m in capital spend released to date). She listed one of the objectives to include improvement in Ease of Doing Business ranking to 100thposition from current position of 169th.
The Minister said that the current stability in oil price has raised hope for Nigeria,noting that Oil prices are up 75% per barrel since hitting a 12-year low of around$27barrel.
Adeosun said that oil production volumes are expected to rebound in the nearterm and that ongoing fiscal reforms are bearing fruit.
According to her, the Federal Government is making a N8bn savings on payroll to date, while a N14bn in estimated savings on overhead is expected by year end.
“While production volumes have increased, the damage to oil facilities are concentrated on onshore oil fields from which we get our greatest volumes and revenues. The gap in production volume is being plugged by production in off-shore fields (Production Sharing Contracts) from which we incur higher costs. This therefore, minimizes the effect of increasing production in revenue terms.”
The Minister stressed that Investment in critical infrastructure is key to unlocking economic growth, while Cost reductions being achieved through fiscal reforms create head room for capital investment.
The Federal Government, she said, is effectively managing debt overhang; forming strategic alliances with private sector to implement key projects with limited budgetary provision; restructuring of outstanding PPPs to address legacy issues and initiate New PPPs to ensure efficient delivery of infrastructure and value for money efficiency gains.
The Minister explained that current FAAC disbursements are low due to the three-month lag in sharing of oil revenues. “Crude oil proceeds in April are being shared in June and therefore, do not reflect recent increases in production volumes.
“Our revenues are looking well; FIRS and Customs are doing well in terms of this” Adeosun said, adding: “our spending is being targeted to stimulate the economy and achieve positive GDP Growth. There is a trade-off between growth and inflation. “The objective is to target growth while keeping a close eye on inflation.
“We will invest in key infrastructural upgrades to stimulate the economy.” [myad]
