Subsidy: FEC Approves 2022 Appropriation Amendment Bill
The Federal Executive Council (FEC) has approved a request for amendment of the 2022 appropriation batch to be transmitted to the National Assembly. The meeting of the council, presided over by President Muhammadu Buhari, on Wednesday in Abuja, also approved N52.8 billion for the completion of three roads across the country.
The Minister of Finance, Dr Zainab Ahmed, who alongside the President’s Senior Special Assistant on Media and Publicity, Malam Garba Shehu, revealed these when they briefed State House correspondents on the outcome of the council meeting.
According to Ahmed, part of the requests of the executive in the proposed 2022 appropriation amendment is for clauses 10 and 11 to be repealed because they contravene provisions of the fiscal responsibility and finance Act 2021.
She said: “The memo we presented to council today has to do with a request for approval of the 2022 Appropriation Amendment.
“If you recall, when the President signed the 2022 Appropriation into law on Dec. 31, he had raised some concerns in some of the provisions in the budget and had indicated that he will be submitting an amendment proposal to the national assembly for them to effect improvements in what has been done to the budget.
“So today, the council took that amendment proposal and I just want to report that part of the requests that council has approved today is for the national assembly to repeal clauses 10 and 11.
“Clause 10 is referring to a provision that has been made that will enable the EFCC and NFIU to be able to take 10 per cent of whatever collections that they recover.
“We’re asking for that to be repealed because this is in direct contrast to the Acts of these two agencies and also, it is in contravention of the Fiscal Responsibility Act and the Finance Act 2021.
“Clause 11, on the other hand, is a provision that has been made that says that the Nigeria embassies and missions are now authorised by this Appropriation Act to expend funds allocated to them under Capital Components without the need to seek approval of the Federal Ministry of Foreign Affairs.
“This again, in a view, and council agreed, is inconsistent with financial regulations and also inconsistent with the provisions of the Public Procurement Act. So, we are asking for this to be repealed. ”
On the much-debated removal of subsidy on Premium Motor Spirit (PMS), the minister said about N3 trillion would be required to continue paying for subsidy. She, however, stated that the government was looking at ways of scaling down the amount.
“The Petroleum Industry Act (PIA) had required that all petroleum products should be deregulated within six months of signing the PIB into law. And the six months would have meant from August to February. But when we were doing the budget we stretched that to June.
“But having to step back and take into account the realities of today, what it means is we have to go back and amend the PIA. So, the Ministry of Petroleum Resources will be leading on that.
“They had indicated that they will be asking for an amendment to extend it to 18 months from six months. And then it means we can now also amend the budget. So the two processes will go side by side,’’ she said.
The minister revealed that the council agreed with the view of the State Governors, that there was a need to scale down on the (N3 trillion) size.
She added: “So even as the government is not immediately removing the fuel subsidy, we have to make sure that what the nation is incurring is efficient, and that it is a real cost that has been consumed by the country.
“How do we fund it? So we’ll have to reduce it from that N3 trillion and that is one. Secondly, also we have been running reconciliations with NNPC to reduce the cost.
“But also we have several reconciliations with NNPC and NNPC itself owes in some cases, government. So, we want to be able to settle some of the subsidy costs through this reconciliation process.
“So, when we’re done with that, whatever is left that we’re not able to apply to what an NNPC is owing the Federation will not be increasing the deficit. And that means increased domestic borrowing.” Ahmed also disclosed that the council approved the ratification of Customs Mutual Administrative Assistance Agreement between South Africa and Nigeria.
“That memo has to do with the confirmation of ratification of Customs Mutual Administrative Assistance Agreement between South Africa and Nigeria. The importance of this for us is, cooperation between Nigeria and South Africa, as it has become even more important now with the Africa Continental Free Trade Agreement.
“It will also help to increase trade relations between the two countries and facilitate exchange of information as well as strengthen our bi-national cooperation,” she maintained. Read: Subsidy Removal to Hike Petrol Price without Alternative Energy
The senior special assistant to the President on media and publicity told the correspondents that the council approved the N52.8 billion for the completion of three road projects across the country
Shehu who spoke on behalf of the Minister of Works and Housing, Mr Babatunde Fashola, listed the benefiting states to include Akwa Ibom, Abia, Imo, Kwara and Cross River. He disclosed that 11 other contracts were also approved, across the six geo-political zones of the country.
“He (Fashola) presented a request for the 15 highway projects, including roads and bridges all of which were approved but I will just give details of two or three of the roads that he got approval for.
“One of which was the award of contract for the construction of phase II of Ikot-Ekpene border, Aba to Owerri dualisation road project at the cost of N40, 157,000 000, with a completion period of 30 months.
“Another project for which he got approval is for the construction of the Offa bypass road in Offa Local Government Area of Kwara , for N4, 335, 000, 000 and is due for completion in 12 months.
“Another one is the revised estimated cost for the rehabilitation of the Alesi-Ugep road section in Cross River. The initial cost was N11.221 billion but the cost has now gone up to N14.740 billion with an additional completion period of six months. Eleven other roads are spread across various geo-political regions of the country,” he said.
On his part, the Minister of the Federal Capital Territory (FCT), Mohammed Bello, said the council approved N5.4 billion for the construction of a road in Bwari Area Council of the FCT.
“Today, I presented one memo at the Federal Executive Council meeting in respect of the contract for the completion of the road called; Mpape-Galuyi-Shere within the Federal Capital Territory, in Bwari Area Council at a total cost of N5, 454, 536, 230.67 only, to be completed within 18 months.”
The minister further stated that the road had been under construction for some time but the contract was terminated when it was realised that the contractor could not perform and it was re-awarded to a new contractor.
The Minister of Communications and Digital Economy, Prof. Isa Pantami, said the council approved the Nigerian Communication Commission for the deployment of Revenue Assurance Solution (RAS) to block leakages in the telecommunication industry particularly as it applied to annual operative levies.