Fuel subsidy: Reps query N222.1bn extra-budgetary spendingBy Bobricky 10:12 Wed, 23 Sep 2015 Comments
Speaker, House of Representatives, Yakubu Dogara
The House of Representatives Ad-Hoc Committee on the Non-Implementation of the 2015 Capital Budget has queried the executive expenditure of N222.1bn on fuel subsidies from January to July, 2015.
Chairman of the committee, Aliyu Pategi (APC Kwara), expressed the committeeâ€™s position during a public hearing in Abuja on Tuesday.
Pategi said the money was neither appropriated nor approved by the National Assembly, noting that such extra-budgetary expenditure had become a source of concern to legislators.
â€œAppropriation is an Act, and we insist on its implementation. We want to know where there are challenges but to spend monies such as the N222.1bn without recourse to the parliament is not acceptable to us,â€ the lawmaker said.
The committee also queried a loan of N615.96bn taken from the Ways and Means Account at the Central Bank of Nigeria without recourse to the National Assembly.
The committee chairman directed the Ministry of Finance to provide details of these transactions in a position paper which he said should be submitted to the Clerk of the Committee within two days.
On the issue of the Treasury Single Account, Pategi said the National Assembly would consider a review of the laws establishing some revenue generating agencies, so they could retain a portion of their revenue.
He cited an example of the Nigeria Customs Service which retains seven per cent of its revenue and remits 93 per cent to the Federation Account.
â€œFor instance, last year the Nigeria Ports Authority collected N161 bn, they spent all of it and remitted only N1bn. These agencies belong to the people; you cannot spend these monies without recourse to parliament,â€ he said.
Earlier, the Permanent Secretary in the Ministry of Finance, Mrs. Anastasia Daniel-Nwaobia, had told the committee members that the Federal Government spent N222.1bn on fuel subsidy between January and July, 2015.
She said that the money was neither appropriated in the 2015 Appropriation Act nor was approved by the National Assembly.
Daniel-Nwaobia, who was represented by the Director-General, Budget Office of the Federation, Mr. Aliyu Gusau, said he did not have sufficient information on the expenditures.
Commenting on the loan secured from the CBN, Gusau said, â€œThis is an item under contingency funds, but it allows room to take loans and things like that, but I am not too conversant with the details.
â€œIn January 2015, J.P Morgan placed Nigeria on an index watch as a result of their concerns in the operations of our foreign exchange market, namely liquidity for transactions, plus the fluctuations exchange rate and lack of a fully functional two-way forex market.
â€œHowever, the finance ministry, the Central Bank of Nigeria and the Debt Management Office will continue to ensure a stable forex market.
â€œWe have assured J.P Morgan and other investors that the markets for FGN bonds remain strong and active due primarily to the strength and diversity of the domestic investor base.â€
He explained further that the recent S&P rating scored Nigeria B+ due to transparency in doing business, and that the Fitch rating was being awaited.
In his presentation, the Deputy Governor, CBN, Mr. Sulaiman Barawu, explained that the Ways and Means Account was approved by law as contingency for the Federal Government to borrow from to fund its deficit up to five per cent of the preceding yearâ€™s revenue.
â€œWhat JP Morgan wanted us to do is to allow uncontrolled devaluation of the currency. We think that is harmful to the economy,â€ he said.
The director also said that the CBN believed the Naira was appropriately priced at N197 to one United States Dollar.
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