•36 states approve N585bn for projects
(THIDAY) From Juliana Taiwo and Kunle Aderinokun in Abuja, 06.14.2008
President Umaru Musa Yar’Adua yesterday in Paris, France announced that his administration would formally declare a state of emergency in Nigeria’s power sector next month.
The 36 states of the federation have equally agreed to withdraw N585 billion (the equivalent of $5 billion) from the excess crude account to support the financing of power projects across the country during the emergency period.
A statement signed by Special Adviser to the President on Communica-tions, Mr. Olusegun Adeniyi, said Yar’Adua, who was on a visit to France, disclosed this while responding to concerns expressed by prospective French investors over current power supply problems in Nigeria.
The President said under the emergency which would be in force for three years, the federal and state governments would set aside $5 billion for the rehabilitation and expansion of Nigeria’s power generation, transmission and distribution infrastructure.
The President told the gathering of French businessmen that after the three-year emergency period, Nigeria’s generation and distribution infrastructure would be privatised while its transmission infrastructure will remain under the control of a state-owned company.
He said Nigeria would seek additional financing from international finance institutions for the rehabilitation and expansion of its power infrastructure, adding that his administration intends to establish a proper framework for the incremental increase in Nigeria’s power generation capacity to about 50,000 megawatts by the year 2020.
President Yar’Adua invited the French businessmen to take greater advantage of the immense investment opportunities thrown up in all sectors of the Nigerian economy by the deregulation and privatisation policies of the Federal Government.
Before leaving Paris for Abuja, President Yar’Adua met with African Ambassadors to France.
He told them that as Africa’s representatives in one of the world’s major economies, they have a duty to make the continent’s case for equity to its development partners and to present its perspectives on the critical socio-economic, developmental and political issues in a fast-globalising world.
The President said: “In the reality of today’s world, you have a responsibility and obligation as Africans to form yourselves into a functional, pro-active and effective synergy to drive our continent’s quest for regeneration.”
In the meantime, as the Federal Government is concluding arrangements to declare a state of emergency in the power sector, the 36 states consented to withdraw N585 billion from the excess crude account to support the financing of power projects across the country.
The total amount in the excess crude account stood at $18 billion as at May this year.
Although details of how the funds will be withdrawn were not disclosed, the amount for each state will be released to the Federal Government for the projects according to the revenue sharing formula.
The Federal Government will meet with the 36 states of the Federation on June 19 and unveil the framework and the financing details for the much-awaited state of emergency in the power sector.
Finance Minister of State, Mr. Remi Babalola who disclosed the consensus reached by the states after the monthly meeting of the Federation Account Allocation Committee (FAAC) held in Abuja yesterday, said the state governments unanimously agreed to withdraw the money from the account and such will not repaid, until the proceeds which will be shared according to the revenue formula after the assets are privatised.
“We are going to take $5 billion from the excess crude account. It has been approved by theFAAC that it should be put into power projects based on the inputs that will come from Mr. President and if that is done, the three tiers will own a substantial part of the power infrastructure according to their share of the revenue formula.
“There will be no repayment. But once those assets are privatised, the proceeds will be shared according to their revenue formula.”
Babalola also said the 36 states and the Federal Government unanimously agreed that the Nigerian Customs Service (NCS) and the Federal Inland Revenue service (FIRS) should not debit the Federation Account with bank charges charged them.
Meanwhile, the three tiers of government shared a total of N436.51 billion for the month of May as against N431.75 billion distributed in the previous month.
A communiqué signed by the Accountant-General of the Federation (AGF), Mr. Ibrahim Dankwambo stated N316.73 billion was shared as statutory revenue allocation and N31.90 billion as value added tax (VAT) while N87.87 billion was used as budget augmentation for the month.