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Zero budgeting policy may render some MDAs redundant in 2016

By BusinessNews Staff on September 28, 2015

There are indications that the new zero-budgeting policy of the present administration may render several ministries, departments and agencies of government (MDAs) idle in 2016 as they could be denied of capital votes for project implementation.

It followed government’s decision to dump the hitherto envelope or incremental budgeting system, whereby capital votes were indiscriminately allocated to agencies and parastatals annually for projects, with minimal results often achieved.

But faced with serious fiscal challenges occasioned by the drastic drop in oil prices, which had more than halved government revenues, the present administration of President Muhammmadu Buhari has resolved to cut costs and prioritise spendings to projects that would have immediate impact on Nigerians.

THISDAY gathered that as a result, government has decided that only MDAs which fall within its prioritised programmes would be allocated capital votes in 2016.

By implication, other MDAs would be left without funding to undertake capital projects next year and this has already caused anxiety for most of them.

The fears stemmed from the fact that such agencies could fall victim of the proposed move to rationalise public institutions, it was further gathered.

Speaking in an interview with THISDAY on the new zero budgeting policy of government, Secretary to the National Planning Commission (NPC), Mr. Bassey Akpanyung, said it would not be business as usual for project implementation in the country.

He said: “We are not going to use incremental where you have to add on the budget you had from the previous year and go on; what it really means is that we are just starting as if there was no programme at all and then we look at specific sectors that are priority to government and decide which project we want to implement, look at the pros and cons, the multiplier effects of that project and linkages to the economy and then decide that it is worth implementing and then we set money on it with the feasibility study that has been done and then the proper costing and then we put money on it and implement it to the end.”

He said rather than give small amount of capital allocations to all the MDAs “which ends up not getting any project completed” government would now select specific core MDAs and core sectors and consider projects that’ll actualise the policy of government.”

According to him: “If the MDAs are those that are priority-and that’s where the thrust of the government is-surely, they’ll get their capital budget but if it’s those ones that are not on the priority, then maybe not in 2016, may be in 2017 because there’s no MDAs that’s not essential to the economy.

“But then we are going to be facing the implementation of the capital project to just ensure that it is those essential projects and programmes that speak directly to the policy of government that are implemented.”

Continuing, he said: “We pick a particular policy like the social protection policy; what specific programmes are we going to be doing there-we do the costing-how many people are going to be covered and once we decide that these are the numbers we are going to cover, this is the amount of money and then government budgets directly on it irrespective of what had happened in the past.”

[ThisDay]

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