During the fiscal year 2025 the Ministry of Health prepared a budget for the National Hospital Upgrade Programme (NHUP). The total approved budget is $\text{₦}2\,500$ million, of which capital expenditure (building, equipment) is allocated to three projects: Project A ($\text{₦}300$ million), Project B ($\text{₦}450$ million) and Project C ($\text{₦}250$ million). The remaining budget is recurrent expenditure (staff salaries, maintenance).

(a) What percentage of the total NHUP budget is allocated to capital expenditure?

(b) The government policy states that capital expenditure must not exceed $30\%$ of the total budget for any health programme. Does the NHUP comply with this policy? Justify your answer with a brief calculation.

Question

During the fiscal year 2025 the Ministry of Health prepared a budget for the National Hospital Upgrade Programme (NHUP). The total approved budget is $\text{₦}2\,500$ million, of which capital expenditure (building, equipment) is allocated to three projects: Project A ($\text{₦}300$ million), Project B ($\text{₦}450$ million) and Project C ($\text{₦}250$ million). The remaining budget is recurrent expenditure (staff salaries, maintenance).

(a) What percentage of the total NHUP budget is allocated to capital expenditure?

(b) The government policy states that capital expenditure must not exceed $30\%$ of the total budget for any health programme. Does the NHUP comply with this policy? Justify your answer with a brief calculation.

Accepted Answer

(a) 40 %; (b) No, it exceeds the 30 % limit

Neco 2021 Government Question 25

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