The Federal Executive Council (FEC) Wednesday approved request for the amendment of the 2022 Appropriation Act to be forwarded to the National Assembly.
Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said this while briefing State House correspondents at the end of the weekly FEC meeting presided over by President Muhammadu Buhari.
She said part of the request of the executive is for clauses 10 and 11 to be repealed because they contravene provisions of the Fiscal Responsibility and Finance Act 2021.
“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 the 31st of December, he had raised some concerns that he had 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 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 be able to take 10% 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“We’re asking for that to be repealed because this is in direct contrast to the Acts of these two agencies and also it is in contravention of the Fiscal Responsibility Act and the Finance Act 2021.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 authorized 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 So, we are asking for this to be repealed.”
Petrol SubsidyOn the much debated removal of subsidy on Premium Motor Spirit, the Minister said about N3 trillion would be required to continue paying for subsidy but government is looking at ways of scaling it down.
She said: “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 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.
“In the case of the budget, we’re looking at extending to December in the first instance, because this budget year is January to December and we’re going to engage NNPC to further interrogate the request that they presented with a view of trying to see how we can scale it down so that the country is not incurring N3 trillion for a fuel subsidy.
“We agreed with the view of Governors, that there is a need to scale down on the size. So even as 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 real cost that has been consumed by the country.
“How 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,” he said.
The minister also told journalists that the council also 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 and the purpose for us is for the customs law in the respective territories to be properly observed to prevent and also enhance investigation and to combat customs offenses and to afford each country mutual assistance in cases concerning the delivery of documents regarding the application of customs laws in two countries.
“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 binational cooperation,” she said.
