Group Blames Economic Hardship on Failure to Release 2024 Capital Budget Funds

Oghenevwede Ohwovoriole in Abuja

The National Coalition on Accountability and Probity in Governance (NCAPG) has blamed the current economic hardship in the country on the Federal Government’s inability to release funds for the 2024 capital budget.

The group said this delay has resulted in significant economic challenges, including stalled projects, increased unemployment, and reduced consumer spending.

The group expressed their concerns over government’s inability to release capital to contractors and its ripple effects on the economy at a press conference on Tuesday in Abuja.

The national coordinator, of NCAPG, Igwe Umanta, who read the text of the press conference, said many businesses, particularly those owed by the government for contracts executed, face severe financial difficulties, including defaulting on loans and laying off workers.

“Evidently, the Federal Government’s failure to make capital releases to contractors is at the heart of this economic stagnation. Capital projects are crucial drivers of economic activity, and the absence of funding for ongoing and new projects has led to significant setbacks, putting Capital release as missing catalyst which is very important to saddle the economy forward.

“Firstly, it is a pitiable realisation that contractors have been unable to complete critical infrastructure projects, from roads to healthcare facilities, which are vital to national development. Secondly, it is observed that the lack of liquidity in the economy has limited the purchasing power of citizens, further compounding the challenges of inflation and unemployment.

Speaking further he said, “It Is indeed acknowledged that the federal government is currently grappling with significant fiscal constraints. However, it is imperative for the FG to recognise that capital releases are not merely expenditures—they are investments that stimulate economic growth, create jobs, and improve infrastructure.

“Apparently, Nigeria’s economy is presently experiencing significant challenges, exacerbated by limited liquidity, and a lack of substantial capital releases to contractors on projects execution.

According to him, “It is very unfortunate that this worrisome reality has created a ripple effect across various sectors, leading to reduction in economic activity, largely contributing to stalled projects, and creating a surge in unemployment ratio.

“Realistically right now, Businesses, particularly those owed by the government for contracts executed, are facing dire straits. Many companies which are unable to recover payments are defaulting on loans, thereby leading to mounting debts, layoffs, and, in some cases, closures.

In addition he said, “While we recognise and commend the Federal Government’s efforts to implement policies and reforms aimed at revitalising our economy, it is evident that much more needs to be done to achieve stability and sustainable growth,”

The NCAPG urged the Federal Government to prioritise economic stability and transparency in governance. As it also emphasised that government must take immediate action to address the nation’s challenges, including prioritising capital releases to stimulate economic activity and create jobs.

The group in its recommendations to the federal government said, government should develop a clear and transparent repayment plan for contractors and businesses owed by the government.

The group commended the President Tinubu-led administration for its efforts to implement policies and reforms but emphasised the need for tangible results.