Cash Crunch Hits Ministries And Agencies As Revenue Nosedives

The grim reality of a depressed economy appears to be staring many ministries, departments and agencies (MDAs) of the federal government in the face, as they are hamstrung by paucity of funds to meet their obligations, including recurrent expenditure.
The cash crunch may not be unconnected to the disclosure by the Secretary to the Government of the Federation (SGF), Babachir Lawal, to the Senate recently that there has been a 40 per cent drop in revenue in the last five months largely due to the activities of militants in the Niger Delta.
At the 2016 budget breakdown on May 12, the Minister of Budget and National Planning, Senator Udoma Udo Udoma, and his finance ministry counterpart, Mrs. Kemi Adeosun, had assured Nigerians that the release of N350 billion slated for capital projects would commence the next day.
When the promise was not kept, Udoma had explained that the delay was informed by the resolve of the incumbent administration to religiously embrace due process.
But the Minister of State, Budget and National Planning, Mrs. Zainab Ahmed, a few weeks ago disclosed that of the N350 billion, N280 billion had been released to six ministries and about 50 or 60 agencies.
She named the beneficiaries as the Ministries of Power, Works and Housing, Agriculture, Interior, Education, Information, and Environment, but the name of the agencies were not disclosed.
THISDAY investigations revealed that outside the N350 billion earmarked for capital projects in order to reflate the economy, many MDAs are currently unable to meet their recurrent obligations.
A top official of one of the ministries told THISDAY that for over two months, his ministry had not received any funds for recurrent expenditure, thereby making it near impossible to meet crucial overheads.
He expressed concern that the situation was grim, adding that if the release of funds for recurrent expenditure was posing a problem, that of capital votes was almost hopeless.
Echoing the same sentiment, the chief executive of one of the top agencies disclosed that his agency actually received some funds to meet pressing recurrent obligations, which fell short of the agency’s needs.
According to him, the agency was still expecting some funds for about a month, which had not been forthcoming. The situation appears to be the same in many MDAs.
While the cash crunch bites, the military is not left out as the Nigerian Navy, Army, and Air Force are also reeling from the absence of funding for capital expenditure.
It was also unclear how much the six ministries that benefitted from the N280 billion got, as officials of the Ministry of Power, Works, and Housing, for instance, were evasive as to whether or not they actually got funds for capital projects.
However, a terse statement made available to THISDAY after much prodding, said the federal government had released funds to finance ongoing capital projects across the country.
The statement quoted the Minister of Power, Works and Housing, Babatunde Fashola, to have said this, as well as speaking on the resumption of work by contractors at various federal highways.
It was signed by Olusegun Ogunkayode, a senior information officer in the ministry, and explained that Fashola made this known while delivering a keynote address at an insurance conference organised by the Insurance Industry Consultative Council in Abuja to mark the 2016 annual National Insurance Conference.
Fashola, according to the statement, said that with the information available to him, the contractors handling various types of road projects left the construction sites about three years ago because they were being owed by the government.
He stated that they had now been paid and work resumed fully in those affected locations like the Lagos-Ibadan Expressway, which was stalled by lack of payment and legal issues.
On the government’s pledge to pay the backlog of debt owed road contractors, THISDAY learnt that some of the contractors, mainly big players like Julius Berger, RCC, Dantata and Sawoe had been paid part of what is owed them, while others were yet to get paid.
When contacted, Mr. Solomon Ogunbusola, President of the Federation of the Construction Industry, an umbrella body for construction companies in the country, refused to take his calls or respond to a text message.
The Federal Road Maintenance Agency (FERMA) on its part said it was relying on the ministry to undertake its job of repairing dilapidated federal roads across the country.
The agency said the ministry was comprehensively in charge of everything related to roads in the country and that it would align with whatever plans the ministry has.
But information available to THISDAY indicated that some of the federal roads that are in a terrible state of disrepair were yet to get funds for their repairs.
They include the Lokoja-Okene-Okpella, Lagos-Ore, Enugu-Umuahia, Enugu-Onitsha and Enugu-Port Harcourt roads, among others.