Exclusive: Increased Capital Budget Has Not Translated to Practical Funding, Implementation – Senator Hunkuyi

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Lawmaker representing Kaduna North Senatorial district at the Red Chamber, Senator Suleiman Othman Hunkuyi is a vibrant, brilliant and eloquent federal lawmaker who does not shy away from making his position known in every topical national discourse.

In this interview with Sundiata Post Assistant News Editor, Chibuike Nwabuko, Senator Hunkuyi, a one-time commissioner of Finance in Kaduna State during Governor Ahmed Makarfi government, looked at the 2019 budget Proposal of N8.8trillion presentated by President Muhammadu Buhari to the 8th senate and  observed that though, the All Progressives Congress (APC)  government since inception, has made a departure from other governments by providing a sizable percentage of the entire budget into the capital stance, he however expressed concern that increased in capital budget has not translated to practical implementation of capital projects.

He therefore called for a synergy between the ministry for economic planning and indeed the National Assembly along with the performing ministries to sit down and assist government in seeing where we got it wrong.

Sit back and enjoy his erudite analysis.

Excerpts:

Qstn: President Muhammadu Buhari has presented the 2019 budget amid rowdiness, what is your reaction to the boos and cheers?

I think the event though rowdy, the aim has been simply accomplished and successful because the essence of an event like that is to allow the President through the medium of the right and privileges of the chamber to come in and lay his budget estimates for the year 2019. Yes, it was rowdy, but the president had laid the budget.

Qstn: Can you do a comparative analysis between the 2018 and 2019 budgets?

I can assure you the executive being led by Mr. President has come to agree that even though in almost all the cases in the years past, whatever the budget is, is a proposal but good enough if you look at the figure for 2019 in comparison with the figure for 2018, the figure has come down drastically from what it was over N9trillion to what has been presented now at a little above N8trillion. That tells you we are graduating to accepting that even though they are budget proposals of revenue and expenditure for the preceding year, expectedly, we are beginning to cut our coat according to our size.

It may interest you to know, when you make comparison of the two total figures of 2018 and 2019, being dressed down instead of expectedly, it should have gone up. Because the indices of what has been used for the 2019 budget for example, the 2.3million barrel per day for 2018 has been maintained. But $60/barrel is what has been adopted for 2019 as the benchmark in comparison to $51 or thereabout that has been adopted for the year 2018. So you would have expected that the total budget package would have been higher than last year. Because the estimated revenue is higher evidently from the indices and benchmark that has been adopted for the 2019 in comparison to 2018. So it would interest you to see, even though,  more amount of revenue in anticipated, is expected under the same volume and value but the expenditure pattern for the year 2019 has been clipped down to size, that to me is the reality of the day, to me is the reality to what executive need to carry because again one item of comparison you quickly have to take is that, between I and you, the National Assembly in 2018 in our oversight, in our assessment of the performance of the budget from the expenditure guideline  of the capital budget back up has been abysmally, extremely very uncompetitive. So government is now realizing that these resources though in 2019, more is anticipated into the coffers of government but the expenditure is coming down but the deficit gap which was anticipated in the year 2018 is also coming down in 2019. These to me, is shaping down to reality of what the economics may refer to as the practicalities of events in the fiscal measures of our nation.

Qstn: Sir another parameter the president used in designing this budget proposal is the issue of N305 exchange rate to the dollar. Do you not have any fear of future fluctuation?

There is no reason to fear other than that the only two indices like I have told you which are fluctuating, is the benchmark and the volume of barrel of oil per day which through exploration, government is expected into its coffers as revenue. The issue of the N305 has been something that has been static for almost three years, yes there are anticipations that the dollar can be stronger or weaker, but that is the reason the government has all these while, if you go into the parallel market, it is up to N360 or more yet government has maintained that line as N305 which tells you it has been provided to cushion that unforeseen fluctuation in the value or depreciation of the naira against the dollar over time.

So the only two indices may be you can add outside that, is the local revenue provision mechanism and procedure of government within the economy which the president has stressed.  Yes, he lamented, performance of such collection of non-oil revenue has been so largely highly competitive. And again, the two major agencies- the Nigerian Customs Services (NCS) and indeed the Federal Inland Revenue Service (FIRS) have otherwise even within the 2018 largely been able to score an excellent mark in the collection procedure of the revenues of government. So you still come back to know those things that will determine the fluctuation; those things that will largely determine the collection of revenue and indeed it is what you collect that you plough back otherwise, you will end up with a deficit which you may have to go lending.

You could see part of the worrisome nature of the budget. I would have thought you would have raised is the local debt burden which over two trillion has been earmarked and 80% of that is going into local debt reconciliation. These to me is a little worrisome, this to anybody is a worrisome trend because it is part of what we should have expected to eliminate or to narrow, because we can’t eliminate it completely, yes agreed. But you can narrow and compare that with the total expected capital expenditure outlay compared to the local debt issue, it appears there are close competition – one is about 30% the other one is about, may be 25 to 26%.

I think in my own opinion, we need to look at that now and in the near future and definitely in the implementation of the budget now and the extreme budget procedure possibly the revenue of government we know, part of the issue is, you transfer some of these funding into addressing your reserves which makes it more comfortable for you as a nation, which gives viability as a nation economically in comparison with other nations of the world.

The whole thing is a large crystal ball but honestly speaking these are the areas in my own opinion, we could be a little brinkmanship of course with the intent, good intention of the executive along with the national assembly in balancing some of those things. You could more drive what I am saying home, when you look at, yes the president has delivered, he has given the performance of the oil sector, where 2.3million barrel per day is projected and the performance averagely is about 1.9million barrel per day over the period under review in 2018.

Everything being equal, you are expecting to either maintain or improve on that performance hence part of the budget slice has been given for that stability for the region over time so that with the stability, you are expected to earn better, higher volume of prospecting in oil and definitely more revenue to come into the coffers of government but even at that 1.9 million barrel averagely per day over a period of time yet, we come back and see the performance of our capital budget back up for the year 2018.

Qstn: You know he emphasized on the completion of projects, but this is the first time about N2. 7trillion is being budgeted for capital Project.

No it’s not the first time, this has been the trend even in 2018 and 2017. It has been like that, averagely that is what they  have been allocating and that is why we have been saying is worrisome, worrisome because the period under review 2018 evidently, confidently practically is on the review table that the budget backup for the capital budget 2018 has been abysmally low. So now that we are maintaining that slice, semblance of percentage, over 2019, what has changed?

Or what are we anticipating should change so that we will be able to, at the end of the day, say that our capital budget performance has really gone sizably over time. And very quickly, if you review the performance of the 2017 budget particularly the capital budget performance, particularly the cash backing of the capital funding of the 2017 budget when the country was in a harder economic stance, the performance of the capital budget is at par with the capital budget in 2018. So like I am saying, the ministry for economic planning and indeed the National Assembly along with the performing ministries should have sat to assist government in seeing where did we get it wrong. How do we evidently put head together in making sure that performance of the capital budget as a matter of deliberate policy, is not only captured in numerical strength but is captures in practical implementation through defending backup of the capital budget.

Because this government has made a departure from other governments by providing a sizable percentage of the entire budget into the capital stance but it is not enough to earmark, it is not enough to provide, it is in all in all to make sure that capital funding  is practically made a reality by the end of the year so that out of what you have provided, you are able to say that the performance of that practical project is sizably up enough to the percentage that you would say yes, you are home dry.

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