“BudgIT highlights corruption loopholes in the budget process, calls for urgent budget reforms,” the Lagos-based firm said in a statement released by its Communications Associate, Iyanu Fatoba.
The statement noted:
‘‘We analyzed all 19,036 capital projects in the 30 2021 federal budget out of which 316 duplicate projects were detected within 74 federal agencies spread across 23 ministries and the Presidency with cumulative allocation of N39.5billion. For example, the Nigeria Institute Of Oceanography and Marine Research had an allocation of N300m for “Supply and Installation Of All-in-one Solar Street Light, 10,000 Lumens With Lithium Battery Pri Ats Across The Six Geo-political Zones”, yet the National Agriculture Seeds Council received an allocation of N400m to implement the same “Supply and Installation Of All-in-one Solar Street Light, 10,000 Lumens With Lithium Battery Pri Ats Across The Six Geopolitical Zones.
‘‘Worth noting in this specific instance is that it is outside the mandate of both agencies to provide solar street lights across Nigeria. Another example is the Border Communities Development Agency (BCDA) HQTRS which received an allocation of N237.5m for an ongoing project: “Construction Of Bridge Across River Rima From Bubuce To Augie LGA Kebbi North Senatorial District Kebbi State” whereas the Federal Ministry Of Environment Headquarters also got an allocation of N150m for to start a new project for “Construction Of Bridge Across River Rima From Bubuce To Augie LGA Kebbi North Senatorial District Kebbi State.
"In yet another manifestation of duplicated projects, we observed 195 instances amongst the 316 duplicates where 31 otherwise unique ERGP budget codes were assigned to more than one project. The risk inherent in this manifestation is that once one project is reported as completed, the duplicate project(s) with the same ERGP code can potentially be assumed to be completed even though it may or may not have been implemented. As an example, budget code, ERGP78712459 was allotted to “Special Training And Empowerment On Transport And Logistics To 12 Senatorial Zones And 40 Federal Constituencies” with a N3.26bn allocation, in the Nigerian Institute of Transport Technology whereas the same budget code ERGP78712459 was also allotted to a smaller project “Renovation Of School Blocks In Nkum Ekajuk Ukelle And Okpoma In CRS” with a N250m budget allocation within the same agency.
"Recall that in June 2020 our OpenTreasury 32 report analyzing government expenditures detected that over 2,900 payments totalling N51bn paid into personal accounts in FY 2019 as opposed to being paid to corporate contractors. Duplicate projects in the federal budget could create a wide loophole for corrupt diversion of public funds,’’ the further report reads in part.
As a result, only 11 of the 36 states invested up to 50% of their capital expenditure budgeted for 2019, indicating that the affected states focused less on social infrastructure.
The state of Kaduna had the highest capital expenditure implementation rate, spending N97.5 billion out of a total of N152.3 billion, while Cross River had the lowest. In 2019, the state had invested just 2.78 percent of the N1.04 trillion set aside for capital expenditure.
“Spending pattern is not sustainable as this has opened gaps in providing quality healthcare services and educational systems, thus slowing down social development as well as growth in other key areas of the economy.
“State governments’ recurrent costs have increased significantly over the years with only a small portion of collected revenue and loans dedicated to meet capital expenditure. In 2019, 36.73 per cent or N1.93 trillion of the N5.26 trillion total expenditure in 2019 was dedicated to capital expenditure while 63.27 per cent or N3.33 trillion went to recurrent expenditure and loan repayments,” it pointed out.
This is a concerning indication, according to Budgit, because Moody's Investors Service estimates that Nigeria's infrastructure, which lags well behind that of emerging market peers, would need $3 trillion in investment over the next 30 years to close the gap.
This is the equivalent of spending N38 trillion per year for the next 30 years, according to the study.
The civic group demanded that the government audit security spending and close budget gaps that could lead to corruption.
“2021 has been a horrifying year for Nigerians concerning security as the country combats mutating forms of crime and terror across all its 36 states; this is despite allocating over N10.02 trillion to security between 2015 and 2021. In the 2021 budget, the entire security sector’s allocation was N1.97 trillion, representing a 14 per cent increase from the N1.78 trillion allocated in 2020.”
Mr Tunde Oyediran, an economist and stockbroker with Calyxt Securities Limited, told LEADERSHIP yesterday that the government should try as soon as possible to break up all the relations.
He stated that the country's project methodology, especially incremental projects, is an issue, while also stating that adding a certain percentage to what was budgeted for the previous year should be discouraged.
“There must be commitment on the part on people who want to implement or create the budget, ensuring that it is successful,” he stated.
“Are we saying that as big as Nigeria is and as matured as our budget planning and processing are, we still have processes that were duplicated of budgetary items in the budget plan?
“What I just discovered is that we have a bunch of lawmakers who are extremely lazy at reading. This is one thing the country is suffering from. For example most of the laws passed in spite of the public hearing, people still come out to pick holes in those laws because things will be smuggled into the document and because of the volume of the document, they cannot see it or read it.”
“If we fixed the political structure, some of the economic structure will be immediately addressed,” he added.