Nigeria Content Online

To cut leakages in
the system and ensure efficiency in the utilisation of capital
expenditure, the federal government will soon sign up to be a member
nation of the Construction Sector Transparency Initiative (CoST).

This is a
multi-stakeholder initiative to increase transparency and
accountability in the construction sector. Finance minister, Olusegun
Aganga, who disclosed this, said the way public construction projects
are handled in Nigeria is inefficient and allows for corruption to
thrive.

Speaking at the
sidelines of the one-day interactive session with the organised private
sector in Lagos on Tuesday, he said the initiative would allow local
communities to monitor projects in the area and help to plug wastage in
the system.

“One other way to
make it transparent is to join the CoST. Only a few countries, United
Kingdom taking the lead, have actually established that process and I
want us to join. That way, we bring public and private sector involved
in how we monitor our project. It introduces accountability and
transparency,” Mr. Aganga said.

He said the
process, when fully established, would allow independent committee to
monitor ongoing government projects across the country.

Constituency monitor

“The projects will
be on the internet so if there is a road construction in Nnewi to
Umuahia, you will know the roads that are being constructed in an area
and the constituents will know when the project is supposed to start
and end, and they will be able to report back at that local level,” he
further said.

He said the
independent committee would investigate and challenge projects which do
not meet the time lines. The minister said this is part of ways of
ensuring fiscal discipline. Observers are however wondering when this
would come into operation when government contracts are shrouded in
mystery.

CoST is already in
operation in seven countries: Ethiopia, Malawi, the Philippines,
Tanzania, United Kingdom, Vietnam, and Zambia.

Explaining the depletion in the foreign reserves, he said government is making effort to reduce the trend in the 2011 budget.

“In overhead, the
proposal which we sent to the National Assembly was reduced by 30 per
cent. The whole of last year we were shouting about borrowing, but we
really should have shouted when the budget was being put together.
Really, when you have an unnecessarily expansionary budget, that
deficit has to be funded and the only way is from your savings or from
borrowing,” the minister said.

Sovereign fund

Mr. Aganga said
there was need to reduce the level of expenditure and the level of
borrowing and the government is ready and prepared to introduce
discipline in how public finances are managed. Part of this, he said,
is the push to establish the Sovereign Wealth Fund to be managed by an
agency of competent professionals, some of whose services would be out
sourced.

“The Sovereign
Wealth Fund will have three boxes. One will be inter-generation fund
for future generation, and that will be invested in fixed income
securities and equities. The second box will be stabilisation box which
will be made available when there is a fall in revenue,” Mr. Aganga
said.

The third component of the fund, he said, is the infrastructure fund
which will invest in local infrastructure such as rail, roads, power,
and ports.