…proposes N162bn Sukuk fund for 45 roads
Minister: Why there’re abandoned road projects
Nigeria’s total public debt stock comprising the external and domestic debt of the Federal and State Governments and the Federal Capital Territory (FCT) will rise to N38.68 trillion by December 2021.
Minister of Finance, Budget and National Plan-ning, Zainab Ahmed, who disclosed this yesterday at a budget defence session, said the debt portfolio, which stood at N31.01 trillion ($85.90 billion) as at June 30, 2020, is projected to hit N32.51 trillion by December 31, 2020.
Ahmed, who appeared before the Senate Committee on Local and Foreign Debts, said that the 2021 Appropriation Bill has provided for new borrowing to the tune of N4.28 trillion, which translates to N2.14 trillion domestic borrowing and N2.14 trillion external borrowing.
Consequently, she said, a provision of N3,124.38 billion for debt service, broken down to N2,183.49 billion (domestic) and N940.89 billion for external debt service, has been made. The minister, who was taken up on the issue of numerous abandoned road projects across the country, said efforts were on to use the current Sukuk fund of N162 billion for the construction of 45 roads spread across the six geopolitical zones.
“I’m one person that feels that we should just do this and take one major road in one geopolitical zone and finish it. “We were not able to do that because of the processes in which appropriation is made both at the executive as well as the legislative arms of government. But truly, if we were able to just take one or two projects at a time and complete it before going to the next one, it will be better. “Today, what the contractor does is the bit that has been cut out for him to do in that particular area.
Once the fund is released and it is finished, we will stop again. That’s the consequence of these numerous projects that we put in the budget. It is not related to Sukuk-funded projects alone; it cuts across all the projects. “You will see a road that costs, maybe, N5 billion, and you will see a provision for N100 million, N200 million or 300 million. Of course, the project will never finish. After two years, the contractor comes back and asks for variation, and the amount keeps growing.
“I wish that we get to a point when we sit down as government and agree that let us select a few projects, finish them in 2020, and then in 2021, we select the next. So that on a geopolitical basis, those selections are done as a collective process,” she said. Ahmed said that work on the legacy projects, namely the Lagos-Ibadan highway, 2nd Niger Bridge, East-West road, and Abuja- Kaduna-Kano road, would continue non-stop because funds have been made available for them.
“The Nigeria Sovereign Investment Authority (NSIA) was assigned four major road projects to do. These projects are Lagos- Ibadan Expressway, 2nd Niger Bridge, East-West road, and Abuja-Kaduna- Kano road. “After the President gave approval, the appropriation for that year, 2019, was remitted to the NSIA, and then added its own fund.
“The projects are going on because there is funding on the ground and because they are few, they are concentrating on them and work is ongoing,” she said. Ahmed explained that the delay in releasing Sukuk funds to contractors for executed projects was because the fund is protected and there are procedures put in place to verify claims before making payments.
“There is an audit process. The first batch has been released; the second batch is being released as we speak. “There are some checks that we have to put in place to make sure that the claim that is being made is actually valid.
There are parties that have been engaged to do a second level of verification in addition to the claims the Ministry of Works sends as invoices due for payment,” she said. The minister said that a batch of claims amounting to about N58 billion has been released while another N35 billion was undergoing due process.