The Minister of Finance, Budget and National Planning, Mrs. Zainab Usman, has directed Federal Ministries, Departments and Agencies, MDAs, not to introduce new projects in their 2020 budget.
The directive was contained in the 2020 Budget Call Circular marked: BD/2000/EXP/S.800/I/3/27, issued by the minister.
According to her, the thrust of the federal government’s capital expenditure programme in 2020 will be the completion of as many ongoing projects as possible, rather than starting new projects.
She said: “MDAs are, hereby, advised that new projects will not be admitted into the capital budget for 2020 unless adequate provision has been made for completion of all ongoing projects.
“As a general rule, MDAs may not be allowed to initiate new projects/programmes unless they can demonstrate that adequate provisions have been made for ongoing projects. In addition to alignment with the objectives of the ERGP, the likelihood of completion within the medium term, i.e., not later than 2022, should be taken into account in prioritizing capital projects.”
No new vehicles, unless…
She also said only expenditures on programmes/projects that were truly of a capital nature would be admitted into MDAs’ capital budget proposals.
“Except where absolutely critical to the functioning of respective MDAs, proposals such as expenditure on vehicles, furnishing, construction/purchase of office or residential buildings and equipping of non-critical offices will not be accommodated in the 2020 budget,” Mrs. Usman warned.
Capital N1.877 trillion
The minister said in the circular that of the aggregate expenditure projected at N10.002 trillion, N1. 877 trillion would be devoted to capital projects.
Details released indicated: N1,010 trillion for MDAs’ capital expenditure; N234.19 billion for Capital Supplementation; N36.39 billion for Grants and donor funded projects; N80 billion for Special Intervention Programme, of which N50 billion is for the core Special Intervention Programme (same as in 2019) and N30 billion for the Family Home Fund.
In addition, N188.23 billion was provisioned for top Government Owned Enterprises (GOEs); while N328.13 billion has been provided for Multi-lateral and Bi-lateral Project-tied loans.
N2.452 trillion for debt service
According to her, N2. 452 trillion was provisioned for debt service. It would be made up of N1.732 trillion for Domestic Debt and N719.88 billion for Foreign. In addition N296 billion was provisioned for Sinking Fund to retire maturing loans.
Maintain 2019 ceilings
Overhead budget ceilings were retained at 2019 levels, with additional provisions made for only newly created Ministries.
“All MDAs are required to work within their 2019 expenditure ceilings for the purpose of preparing their 2020 Overhead budget submissions. For the avoidance of doubt, BOF will advise each MDA on its overhead ceiling, the minister said.
She advised the MDAs to keep to their capital ceilings of last year and warned that any of them that exceeded its ceilings could have it figure reviewed downwards without recourse to it.
“The Capital budget ceilings for 2020 are as shown in the schedule (attached to the circular). The capital budget ceilings reflect FGN’s commitment and effort, since 2017, to stay faithful to the stipulations to the ERGP 2017-2020, despite prevailing fiscal challenges. Where any indicated ceiling is exceeded, MDAs are to note that the BOF will use its discretion in adjusting down to within the approved ceiling without any recourse to the MDA,” Mrs. Usman said.
Pricing
The minister asked MDAs to be guided by the Approved Price List in procurement provisions in their budget proposals and directed that the list be followed religiously.
“MDAs are required to be guided by information from the Price Checker Portal of the Bureau for Public Procurement (BPP). Accordingly, the Budget Office of the Federation (BOF) reserves the right to adjust the price(s) used by any MDA if considered unreasonable. For avoidance of doubt, any project/programme costing not based on the Price Checker Portal will be inadmissible, except where information on the specific item is not available on the Portal.
“MDAs are also enjoined to desist from the practice of specifying the models/brands of assets they propose to acquire in the budget. As much as possible, generic specification of items should be made in accordance with the Public Procurement Act,” she said.
Mrs. Usman said that by 2020, all MDAs would be on the Integrated Personnel and Payroll Information System (IPPIS) and MDAs not yet on IPPIS may not be able to access their personnel cost provisions in 2020.
Overhead costs cuts
She added MDAs’ overhead budget proposals with respect to printing, adverts, gifts, honorarium, and membership/subscription to international organizations must be subjected to the reasonableness test and the ZBB philosophy.
Travels and Tours
On travels and Training, the minister enjoined MDAs to restrict their travels, training and capacity development programmes to locations within the country and as close to their office locations as possible. It said that foreign travels and training should be limited to exceptional cases.
List of Ongoing, Stalled, and Abandoned Projects
In line with government’s efforts to complete ongoing projects and improve its Public Investment Management, MDAs were advised to provide a list all on-going, , stalled and abandoned projects and consider such projects in their respective portfolios. Taking account of their state of completion and status, MDAs could include such projects in their capital budgets.
Budgets on MDAs’ websites
Further to the Open Government Partnership principles endorsed by the FGN, ALL MDAs, the minister advised all MDAs to upload their respective 2020 budget proposals on their respective websites, within one week after the 2020 Budget proposal is submitted to the National Assembly.
