By Ikechukwu Okaforadi and Musa Adamu
Overwhelmed by the problem of infrastructural deficit afflicting the country across the various sectors amidst scarce resources to fix them, the National Assembly and the Executive agreed Thursday, for a bond of N10trillion to address the problem .
Agreement by both arms of government for the bond came up during budget defence session the Federal Ministry of Works had with 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 , Babatunde Fashola .
Fashola had in his submissions before the committee , called for the launching of national infrastructure bonds of N10 trillion 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 , the Chairman of the Senate Committee on Works, Senator Adamu Alero noted that the previous presentations made by Fashiola indicated there are 540 ongoing road projects the federal government planned to complete under the 2020 budget.
He said base on Fashiola’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.
‘’In countries like Malaysia and Morocco, private investors are directly involved in the construction of roads, with toll gates also built on the roads to recoup their investments.
‘’Thereafter, such roads are returned to the federal government “.
Earlier in his submissions on 2019 budget implementation and 2020 budget proposals for the ministry, Fashiola 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 amount to 23.88% capital budget performance.
Besides, N45.3 billion of the N53.3 billion released, was utilized for payment of part of the outstanding certificates on roads, bridges and maintenance works.
Fashiola further said that as at October 15, 2019, federal government is owing contractors on the site to the tune of N321.1 billion on the ongoing highways construction projects.
‘’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.
‘’The ministry is currently undertaking a total of 540 highway projects at a total contract sum of N4.8 trillion spread over six geo-political zones in the country.
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 priotizes its 2020 budget proposals in order to make appreciable impact within the period 2020-2022’’, Fashiola said.