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Power, works, housing ministry gets 700% budget increase

By on December 28, 2015

The budget for the Federal Ministry of Power, Works and Housing in 2016 is over 700 per cent higher than the combined budgets of the ministries of Power, Works, and Lands/Housing/Urban Development as captured in the 2015 Appropriation Act.

President Muhammadu Buhari had merged the three ministries into one when he appointed the former Lagos State Governor, Babatunde Fashola, as the substantive Minister of Power, Works and Housing.

An analysis of the 2016 Appropriation Bill shows that the enlarged ministry’s budget is 707.64 per cent higher than the combined budgets of the three ministries as contained in the Appropriation Act of 2015.

Although the Federal Government has yet to give details of what will go to each arm of the ministry, findings show that its N467.65bn budget is N409.74bn higher than the amount budgeted for the three ministries in 2015.

In the 2015 Appropriation Act, the ministries of Power, Works and Lands/Housing/Urban Development got a budget of N9.61bn, N40.98bn and N7.31bn, respectively.

Their recurrent expenditures for 2015 were as follows: Power, N4.48bn; Works, N21.17bn; and Lands/Housing/Urban Development, N5.65bn.

Their capital expenditures for the same year were: Power, N5.13bn; Works, N19.81bn and Lands/Housing/Urban Development, N1.66bn.

But in the Appropriation Bill for 2016, the enlarged ministry’s recurrent (non-debt) expenditure is N34.25bn, while its capital budget is N433.4bn, indicating a sharp difference from what was budgeted as capital spending in the preceding year.

Industry analysts lauded the budget, although they expressed fears about the government’s plan to finance the 2016 Appropriation Bill.

The Chairman, Hortigraph Nigeria Limited, a real estate firm based in Abuja, who doubles as Chairman, Publicity Committee, Real Estate Developers Association of Nigeria, Mr. Ahmed Abubakar, said the budget was okay but noted that the performance of the minister would go a long way in determining the success of the ministry.

He said, “One of the most important things which this government needs to address is the issue of power. If power is fixed, more industries will spring up and many graduates will be employed. In the case of housing, once you put substantial money in this sector, you are directly creating jobs.

“The housing sector can create more than 10 million jobs per annum. The government has announced plans to create about one million housing units annually, and if that will work, the number of people that will be employed will be huge. So, I think the budget for works, power and housing ministry is fair for now.

“However, this depends on the performance of the minister in charge of the sector. Although the minister is a trusted hand, it is important that he performs. But I believe he will do well because he will not want to disappoint the President who has merged the three ministries into one.”

When contacted to comment on the amount budgeted for the ministry, the Assistant National Secretary, Nigerian Electricity Consumer Advocacy Network, Mr. Obong Eko, said, “The minister of finance needs to give the budget breakdown sector by sector; it is only then that you can make informed comments on the N433bn budget for power, works and housing ministry.

“However, we are alarmed by the proposal to borrow N1.84tn to finance capital projects in Nigeria. Every informed commentator is waiting to hear how they want to go about that. We need to know the projects that that money is going into; how they intend to recoup the money, and from what source it will be recouped. At what rate will they be getting the loans? These and many more are questions that should be asked the government.

“Now, is borrowing the most viable option available to us when it comes to financing capital projects? Can’t we explore public private partnership? If is about building roads, can’t we give it to construction companies to build under the Build Operate and Transfer arrangement after a specified number of years, rather than go aborrowing?”

Eko urged the government to ensure that it utilised whatever funds that would be borrowed judiciously, stressing that the country’s debt should rather decrease than increase.
[Punch]