MDAs May Get 3 Months Extension To Execute 2020 Capital Budget

The Federal Government may extend the execution of the capital component of the 2020 budget from the expiration date of December 31 to the end of March next year.

The development, according to findings, was necessitated by the lockdown caused by the COVID-19 pandemic, which delayed the implementation of the capital component of the budget.

It was learnt that the delay in capital budget execution was also caused by difficulties in obtaining Certificates of No Objection from the Bureau for Public Procurement by the Ministries, Departments and Agencies.

The 2020 budget which was signed into law by President Muhammadu Buhari on December 17, 2019 had a projection of N7.2tn for recurrent expenditure while capital expenditure was put at N1.94tn for Ministries, Departments and Agencies of Government.

The projections in the 2020 budget had been revised by the National Assembly to take care of the negative impact of the Coronavirus pandemic on the economy.

The National Assembly had raised the budget size from the initial N10.59tn to N10.8tn as a result of the need to accommodate more expenditure to tackle the negative impact of the Coronavirus pandemic.

Before the revision, the Federal Government had projected to spend N560.47bn for statutory transfer, N538.72bn for gratuities and service wide pension, and N302.43bn for overheads.

Also, the sum of N396.23bn was planned to be spent on other service wide votes, N65bn for presidential amnesty programme and N350bn for special intervention programmes.

There was also plan to spend N2.72tn on debt servicing; while fiscal deficit was estimated at N2.28trn.

Figures obtained from the Ministry of Finance, Budget and National Planning showed that out of the N1.94trn allocated for capital projects, about N1.2trn had been released. This had resulted into a funding shortfall of about N740bn.

The National Assembly had returned the country to a January-December budget cycle with the 2020 Appropriation Act, making this year’s budget to expire on December 31, with the 2021 Appropriation Bill presently before the National Assembly expected to take effect from January 1.

But sources at the Budget Office confided in our correspondent that while implementation of the recurrent budget is expected to end on December 31, the capital component would be allowed to go on till after that date.

It was gathered that all unspent balances in the recurrent expenditure cash books at the end of the 2020 financial year will be closed.

Specifically, the official stated that the Government Integrated Financial Management Information System platform will be closed by 12 midnight of December 31, this year while MDA balances will be mopped into the Consolidated Revenue/Treasury Single Account.

It was also learnt that the unexpended recurrent votes of MDAs on TSA sub accounts under the CBN/Remita gateway for the 2020 financial year would similarly lapse at 12 midnight of December 31.

The source said, “Capital allocation and statutory transfer for the financial year ended December 31,2020 will not be closed but extended to maybe March 31,2021.

“This would enable all MDAs to have access to their capital funds and statutory transfers up till March 31, 2021 as may be applied by the National Assembly.”