In December, 2018, President Muhammadu Buhari presented a budget proposal of N8.83 trillion for the 2019 fiscal year to the joint session of the National Assembly – a figure lower than the current fiscal year’s budget by N300 billion. In 2018, the president signed into law, a budget of N9.12 trillion, which was a 6% (N508 billion) increase from the N8.61 trillion proposed to the National Assembly in 2019.
Budget share for roads, housing and power
The Ministry of Power, Works and Housing manages Nigeria’s largest capital fund allocation, responsible for 17% of the total capital budget and 30% of capital budget directly managed by ministries. With a total capital budget of N408bn, the ministry has the capacity to make a mark in closing the infrastructure gap in Nigeria.
There is immense interest in funding a second runway for Abuja Airport, transmission lines to boost the current capacity at approximately 7,000MW, road projects such as Kano-Maiduguri Road, Abuja-Abaji Road, Obajana-Benin Road, Enugu-Port Harcourt Road, Ibadan-Ilorin Road, Ilorin-Jebba Road and Abuja-Keffi Road.
The 2019 budget for the Federal Ministry of Power, Works and Housing (PWH) is a total sum of N408.028 billion. This proposed sum represents a 5% of the overall 2019 FGN budget proposal of N8.826 trillion. The proposed sum (N408.028 billion) represents a 2.84% decrease from the actual sum allocated to the Federal Ministry of PWH in 2018 (N682.959 billion) and also represents a 2.88% decrease from the actual sum allocated to the ministry in 2017 (N553.713).
In terms of capital to recurrent allocation balance, the ministry’s trend of budgetary allocation, between 2016 and 2018, has been between 92-96% for capital expenditure and between 4-8% for recurrent expenditure. For 2019, the proposed sum is disaggregated into 92.41% and 7.59% for capital and recurrent expenditures respectively. This trend of allocation is in order considering that the constituents sectors under this ministry require huge capital investments.
The power, works and housing (PWH) sectors play vital roles in the growth and development of any economy such that getting it right in these sectors (alongside a few other sectors like education, health, agric., transport and services) almost guarantees the development of such economy.
These three sectors (PWH) represent a huge share of the infrastructural needs of Nigeria as a country and rightly so, there have been investments into these sectors by way of budgetary allocations and through Public-Private Partnerships (PPPs).
The document showed that N346, 166,726,658 was budgeted for the Federal Ministry of Power Works & Housing (excluding agencies under the ministry). Out of this amount N10, 281,446,795 was allocated for recurrent expenditure while N335, 885,279,863 was allocated for capital projects.
Out of the N335.8bn allocated for capital projects N124bn has been proposed for ‘Construction/Provision of Roads’ in 2019. This amount is lower by N14.7bn compared to N138.8bn budgeted for the same purpose in 2018.
Further analysis showed that the budget for road repairs in 2019 also got a massive cut, dropping by N56bn. The sum of N103.3bn was budgeted in 2019 compared to N159.5bn proposed in 2018.
The budget details showed that some road projects tagged ‘new’, which government plans to execute are: the “Design and construction of bridge across the Cross River at Uwana (Ebony State) to Nkomoro (Cross River State) at the cost of N1bn, Dualisation of Akure to Ado Ekiti Road’ at N800m, ‘Construction of Rijiya-Gusau Road’ for N270m, and the ‘Rehabilitation of Potiskum-Bajoga-Gombe Road in Yobe and Gombe states’, at the cost of N600m.”
Other new projects for 2019 are the ‘Construction of road with asphalt, culvert and drainage from Kwanar Yawurma to Garandiya in Albasu Local Government, Kano State, at the cost of N200m.
Further analysis of the budget proposal showed that about three road projects described as ‘ongoing’ got the highest capital allocation of N3bn.
They are ‘Counterpart funding for the dualization of Makurdi-Enugu Road in Benue and Enugu states; Counterpart funding for the dualization of Akwanga-Jos-Bauchi-Gombe Road in Nasarawa, Plateau, Bauchi and Gombe States’.
Other on going critical road infrastructure that will get government’s attention this year include the ‘Construction of Bodo-Bonny road with a bridge across the Opobo Channel in Rivers State,” which will gulp N2.5bn.
The ‘Dualization of Ilorin-Jebba-Mokwa/Bokani Junction Road in Kwara and Niger states’ N2.1bn; ‘Early Works IV for the Construction of 2nd Niger Bridge in Anambra/Delta states,’ for N2bn.
The sum of N1bn was budgeted for ‘Emergency Rehabilitation/Maintenance of Third Mainland Bridge in Lagos, Part I, (Restoration of Defective Substructure Piles (Underwater) while the ‘Dualisation of Suleja-Minna Road Phase II in Niger State will cost N1bn.
The sum of N2bn was proposed for the following ongoing road projects: Abuja-Lokoja Road Section III (Abaji-Kotonkarfe); Abuja-Lokoja Road Section IV (Kotonkarfe-Lokoja); Kano-Maiduguri Road (Section I, Kano-Wudil-Shuari); Kano-Maiduguri Road (Section II, Shuari-Azare) and Kano-Maiduguri Road (Section III, Azare-Potiskum).
Others roads that will gulp N2bn in 2019 are the Kano-Maiduguri Road (Section IV, Potiskum-Damaturu); Kano-Maiduguri Road (Section V, Damaturu-Maiduguri); the ‘Dualisation of Obajana Junction to Benin Phase 2: Section 1 (Obajana Junction to Okene)’; ‘Dualisation of Obajana Junction to Benin Phase 2: Section II (Okene to Auchi)’; Dualisation of Obajana Junction to Benin Phase 2: Section III (Auchi to Ehor) and the ‘Dualisation of Obajana Junction to Benin Phase 2: Section IV( Ehor-Benin).
However, unlike in the road construction and repair proposals, government plans to pump in more money into the housing sector in 2019.
In 2019, government plans to spend N30, 969,671,325 on ‘Construction/Provision of Housing’ compared to N3, 598,363,868 voted in 2018. The money for Construction/Provision of Housing will be spent mostly under the Federal Government’s National Housing Programme nationwide, which was captured as ‘Ongoing’ project.
Meanwhile, apart from the Federal Government’s National Housing Programme nationwide on which over N30bn has been proposed for the construction of houses nationwide, there are some other schemes aimed at housing delivery in the country that have been captured in the 2019 budget.
For instance, the Federal Government Staff Housing Loans Board, an agency under the Office of the Head of the Civil Service of the Federation (OHSCF) plans to spend N100m this year on Housing Loans Scheme.
The OHSCF also allocated N146.9m for its ongoing Federal Integrated Staff Housing (FISH) Programme. It recently commissioned 151 housing units in the first phase of the FISH estates in Kuje, FCT, expected to address the housing needs of civil servants who are unable to own houses due to the prohibitive costs of land acquisition, building or purchase.
The sum of N1 billion was earmarked for the expansion and reinforcement of electricity distribution networks as against the initial N72 billion proposed for this course.
Also, in the proposed budget, the Federal Ministry of Power, Works and Housing set aside the sum of N5 billion for settlement of Ministry Departments and Agencies (MDAs) electricity debts.
Also, N1.4bn was set aside for settlement of outstanding power liabilities.
N1, 280,191,208 for generation of 700MW from Zungeru hydropower project consultancy services for project supervision and management.
N1, 030,014,236 for project management services, and N2, 014,000,000 for provision of infrastructures (roads, electricity and water) by special intervention program.