Half of 2009 budget has been implemented, Babalola says

The Federal Government has released about 50 per cent of the funds for capital projects in the 2009 budget, the Minister of State for Finance, Remi Babalola, said yesterday.

Mr. Babalola's rating, which was contained in a press release, is the first official figure released by the executive arm of government after the Speaker of the House of Representatives, Dimeji Bankole, said House committee on Finance figures showed implementation to be about 70 per cent two weeks ago.

By the model usually used by government officials to assess budget implementation, this would mean 50 per cent of the total budget has been implemented. The model assumes that the ratio of released funds to the Ministries, Departments and Agencies (MDAs), determines the percentage of execution of projects named in the annual budgets.

The minister said there has been "accelerated utilisation" of the budget funds by the MDAS in the last two months and that the capital budget implementation was expected to rise to 90 per cent by December 31.

"There has been substantial budget releases to the MDAs, since March 2009," Mr. Babalola said. "About 50 per cent has been released so far. The releases and utilisation of the funds are part of measures to ensure the realisation of the deliverables in the 2009 Appropriation."

The minister's response to government's strategy to ensure full implementation of the next budget was no different from the conventional tactic which has been criticised as not being workable. He said ministers and departmental heads are only required to present action plans on how the funds for 2010 will be utilised.

In the release, signed by his Special Assistant on Communications, Oluyinka Akintunde, Mr. Babalola said the nation should remain assured that the Power Holding Company of Nigeria has the capacity to generate 6,000 mega watts by December 2009.

Deregulate petroleum sector

Mr. Babalola, who is also the Chairman of the Federation Account Allocation Committee, added that deregulation of the downstream oil sector has become necessary as this would lead to competitiveness and productivity.

"Economic performance is hinged on competitiveness and productivity," he said. "I am yet to see anyone that says it doesn't make sense for us to make the economy competitive and productive. We need to remove bureaucracy and ensure we get value for money in order to be competitive and productive.

"Oil remains our biggest blessing, but the sector also faces enormous challenges. These challenges have discouraged private sector investments in new refineries and contributed to making existing refineries cost centres.

"Our aim is to maximise the opportunities in the industry, grow the downstream and deregulate the sector completely. Full deregulation of the oil and gas sector appears very imperative. This will encourage investment in refining and marketing infrastructures."