2024 Budget: Umahi seeks N1.5 trillion budget for works ministry

Senator David Umahi, the Minister of Works, is pushing for a budget increase to N1.5 trillion in 2024 to address the shortage of funds impacting road project delivery across the nation.

He said the increase is critical to the completion of at least 10 selected critical roads and bridges in each of the six geo-political zones of the country.

In the 2023 fiscal year, the Ministry of Works and Housing, including its Parastatals, received an appropriation of N534,455,695,989, out of which the Works and Housing Sectors within the Ministry were allocated a total capital of N453,255,980,966.

After the demerger of the Ministry, the Federal Ministry of Works received an allocation of N383,351,656,449 as capital, Overhead expenses amounted to N525,362,343.96, and personnel costs totaled N6,916,751,203

Umahi, while appearing before the joint National Assembly joint Committee on Works on Monday for the defense of the Ministry’s 2023 budget and the presentation of the 2024 budget, said the current Appropriation for the Ministry is significantly insufficient, while highlighting the inclusion of new projects in the 2024 Budget, amounting to a total cost of N102,956,624,538

He emphasized that without the requested increase, the Ministry might encounter challenges in completing crucial ongoing projects that have already reached significant stages of completion among the proposed 693 new projects for 2024.

He told the lawmakers that 693 new projects have been proposed in the 2024 budget, which is critical to improving road network connectivity and thus enhancing traffic circulation on the Federal Road network, necessary for boosting socio-economic activities in the country. 

According to him, the Ministry has prioritized several projects for completion between 2022 and 2024 while noting that the primary goal of enabling the Ministry to fulfill its mandate of establishing a high-quality Federal Road network conducive to the socio-economic growth of the country, the Minister expressed concern about the main obstacle to highway development—insufficient funding.

He informed the lawmakers that the Ministry has prioritized various projects slated for completion between 2022 and 2024. Stressing the primary goal of enabling the Ministry to fulfill its mandate in establishing a high-quality Federal Road network conducive to the socio-economic growth of the country, the Minister expressed concern about the ongoing main challenge in highway development—insufficient funding.

He said: “In spite of all odds, 21 major road and bridge projects have been completed and some were commissioned, while others are ready for commissioning.

“The total cost of the completed major road and bridge projects is in the sum of N498,802,362,642.46 with a total length of 489. 97km.

“Also, to be completed in 2024 is the 260 emergency repair works in the 2023 Supplementary Appropriation at a total cost of about N260bn”.

“As at date, Government is committed to highway contractors to the tune of about N13.835 trillion with a total of about N1,507,873,365,516.02 unpaid certificates for executed works.

“Secondly, the dearth of younger Engineers/Technical Officers in the Ministry as a result of embargo on employment is affecting effective project supervision at the sites”.

He said the prevailing realities have made it imperative that more sources of funding for highway projects be explored.

While calling for the lifting of the embargo on employment of needed Engineers/Technical officers at the middle level to enhance supervision of projects, the Minister said, “From the foregoing, I would like to recommend as follows: The provision of an Emergency Fund of about 30% of the Budget Provision to cater for unforeseen emergencies that regularly occur on the road network, especially during the rainy seasons;

“An increase of the Ministry’s present budgetary allocation to about N1.5tr to complete at least 10 selected critical roads and bridges in each of the six geo-political zones of the country.

“An urgent review of all certified debts to contractors and if possible, convert same to Promissory Notes to contractors so that we can get properly focused on using any fund appropriated to us to pursue the Ministry’s set objectives.

“Inflation- Many contractors are presently out of sites because they have exhausted their contract VoPs and needed the project’s unit rates to be reviewed.

“It will be good that all VoPs and augmentations of all the projects are reviewed and those that are owed be converted to Promissory Notes, while the unit rates regime will take effect on contractors in line with the current realities of the construction industry.

“More eligible companies should be encouraged to key into the Road Tax Credit Scheme to increase the number of private sector interventions. This means front-loading their tax liabilities to solve our present challenges.

“Raising of Bonds from the Capital Market to finance road development in the country.

“Creation of an enabling environment by fixing the roads so that the deployment of the Highway Development and Management Initiative (HDMI) can be effective.

“And that appropriations for projects be such that no projects when started should last for more than four years”, he added.