A bill seeking to make it compulsory for the Federal Government to allocate 40 per cent of funds to capital expenditure in the national budget for 10 years passed the second reading at the House of Representatives on Wednesday.
The bill, which was sponsored by the Speaker, Femi Gbajabiamila, seeks to make non-compliance with the proposed law a criminal offence.
While Gbajabiamila presided over the plenary in the absence of the Deputy Speaker and the Majority Leader, the Speaker asked the Minority Leader, Ndudi Elumelu, to lead the debate on the bill, on his behalf.
In the debate that lasted over one hour, several lawmakers expressed their support for the bill, especially at a time when most of the ministries, departments and agencies, who came for budget defence on the 2020 Appropriation Bill demanded for more funds to executive their projects.
The lawmakers also noted that only 40 per cent of the capital component of the 2019 budget would be implemented, despite that the capital expenditure was far lesser than the recurrent.
Elumelu said, “If you look at this 2020 budget, you will discover that by the time you calculate it in terms of percentage, the capital budget against the annual budget, you will find out that it is less than 10 per cent of the annual budget. So, what this bill seeks to do is to correct that anomaly.”
In his ruling, Gbajabiamila stated that countries around the world allocate more resources to capital projects.
He said when the bill becomes law and is implemented, it would raise Nigeria’s Gross Domestic Product, stimulate the economy, create jobs and “bridge the infrastructural deficit that we have all been talking about; that would take us trillions and trillions of naira to meet over the next 20 years.”
The Speaker further said, “The reason why we have abandoned projects, which we all talk about, is because of the paltry sum that is voted to capital budgets on a yearly basis.
“We are all witnesses to the fact that practically every agency or ministry in every budget cycle will come and – for lack of a better word – waylay the National Assembly, asking for funds.”
While noting the issue raised by contributors on how to fund 40 per cent capital budget, Gbajabiamila stated that it only required the political will by the government.
He said while private organisations set targets for their employees, the government could also set targets for its agencies, especially those generating revenue.
He also asked the government to block leakages.
The legislation is titled ‘A Bill for an Act to Provide that 40 Per Cent of Nigeria’s Annual Budget should be Earmarked for Capital Projects in the Next 10 Years.’
The proposed law provides for a penalty of five years imprisonment or a fine of N50m or both for violation or any attempt by any person to frustrate the implementation of the bill when passed.
“This stringent punitive measure suggests that the current state of infrastructure and economy are not such to be handled with kid gloves,” the draft bill read.
The bill defined capital project as a long-term, capital-intensive investment for the purpose of building upon, adding to or improving an existing asset.
It further explained that capital projects are known for their large scale and large cost, relative to other investments that involve less planning and resources.