The National Assembly and the Executive have agreed to establish a N10trillion Infrastructural Fund to address the problem of infrastructural deficits across various sectors in the country.
Both arms of the government came to the agreement during the budget defence session of the Federal Ministry of Works with the joint committee of both the Senate and the House of Representatives based on request made to that effect by the Minister of Works and Housing, Mr. Babatunde Fashola.
Fashola had in his submissions before the committee, called for the launching of national infrastructure bonds of N10trillion to close gap of fund releases and yearly deficit capital budgets financing.
According to him, the infrastructure bond should be backed by law as well as being with a very competitive coupon rate.
He said people, ministries and government agencies would feel secured to put in their monies if given legislative treatment.
“What I will recommend which I have addressed during my confirmation here was that we should launch the national infrastructure bond and this would be the responsibility of the ministry of finance and debt management office.
“I think that is one way to entice and inspire agencies like the pensions fund to invest money in a secured Government backed instrument.
“They are investing in Treasury bill because it is Government instrument and it is secured,’’ he said.
In their separate responses, virtually all the members of the joint committee concurred with the Minister by promising to explore the idea, legislatively.
This according to them, will help the federal government to finance the 540 roads projects planned for completion during the 2020 fiscal year.
Specifically, chairman of the Senate Committee on Works, Senator Adamu Aliero noted that the previous presentations made by Fashola indicated there are 540 ongoing road projects the federal government planned to complete under the 2020 budget.
He said based on Fashola’s submission, the 540 roads would require the same size of 2020 budget of N10 trillion to fund their completion.
“We require N10 trillion to build these roads. Our country is where roads are built by the government.
“People are interested in investing in the road project and requires to be encouraged, by allowing them to construct, maintain while they build toll gates to recover their funds.
“Thereafter, such roads are returned to the federal government.”
Earlier in his submissions on 2019 budget implementation and 2020 budget proposals for the ministry, Fashola disclosed that out of the N428.4 billion, the works sector received N251.7 billion, with N223.3 billion allocated for capital projects.
But as at October 15, 2019, only N53.3 billion was released to works sector which amounts to 23.88% capital budget performance.
Besides, N45.3 billion of the N53.3 billion released, which was utilized for payment of part of the outstanding certificates on roads, bridges and maintenance works.
“The sum of N273, 919,607.18 was released to the ministry for overhead costs for the period January-June, 2019, which represents 57% of the budgetary provisions of N480,186,739.13.’’
The minister also said out of the N287.2 billion proposed 2020 budget for his ministry, N197.0 billion is for capital projects.
“Given the wide disparity between the facilities in an unpaid certificates in the total sum of N321.1 billion and the budgetary provisions over the years, it has become imperative that the ministry prioritizes its 2020 budget proposals in order to make appreciable impact within the period 2020-2022,’’ Fashola said.