Wednesday, July 18, 2012

Budget deficit: FG to cut domestic debts –NEC

Abuja — The Federal Government, yesterday,
indicated that it would cut domestic debts in order
to ensure that the level of deficit in the nation's
budget is reduced significantly.
Similarly, lawyers for the Federal Government and
the 36 states of the federation have been given two
weeks to finalise the positions of both parties on
the Excess Crude Account to find a solution before
the next National Economic Council, NEC, meeting.
These were the highlights of the National Economic
Council meeting held at the Presidential Villa,
Abuja, yesterday.
The meeting which was presided over by Vice
President Namadi Sambo had in attendance some
governors of the 36 states, the Governor of the
Central Bank of Nigeria, Minister of National
Planning and Minister of State, Finance.
Addressing State House correspondents after the
meeting, Minister of State for Finance, Yerima
Ngama, said: "A review of the present state of
indebtedness and facilities by various international
financial institutions such as the World Bank
through the IDA window, ADB, Islamic
Development Bank, ECOWAS Bank for Investment
and Development and also the China EXIM Bank,
was done.
"We also discussed the borrowing plan going
forward in the next three years. The Federal
Ministry of Finance is going to provide the
information of all the facilities that state
government can access especially those under the
IDA window and the state will now apply for
whatever project it wants to finance with the funds
and this will be articulated and a meeting will be
called with the National Assembly for the defence
of these facilities and after approval then, the state
will access.
"The Federal Ministry of Finance will also make
separate presentation on the borrowing plan in the
next NEC and this presentation will actually give a
summary of the indebtedness between now and
the next NEC with the Federal Ministry of Finance
and various state governments on all the facilities
that we need to borrow for th-e next three years.
"On a policy level, we want to slow down on the
domestic debts. In fact, we want to ensure that
going forward, that the level of deficit in our budget
is reduced significantly so that we don't add on to
the domestic debts. So, we are actually mindful of
our debts level."
Ultimatum to FG, states' counsel
On the decision of the NEC for the Federal and
state governments counsel to reach a settlement
before the next meeting, CBN Governor, Sanusi
Lamido Sanusi, said the meeting agreed that the
Ministry of Finance and the governors should sit
and agree before the next NEC meeting, though
the date was not disclosed.
According to Sanusi, "this solution is important
because the Supreme Court has given us till
September 2 for an out-of-court settlement to be
reached. If it is not reached then, the trial will
continue."
But from all indications, both parties are willing to
arrive at an understanding of what is due to each
party and also an understanding of how the
indebtedness of any party to the other will be
settled."
Sanusi said the sub-committee set up to fashion
out out-of-court settlement had submitted its
report.
"It is an interim report, the lawyers representing
both parties have been discussing, there has been
significant progress in terms of harmonising
positions.
The major issues that were the subject of
contention were the excess crude account, the
signature bonuses; collection cost; waivers and
concessions; other dividends and Internally
Generated Revenue (IGR); CBN charges which has
been sorted out; NLG dividends; proceeds on sale
of government properties; privatisation proceeds;
establishments and operation of federation account
and incidental matters- FG expenditure on state
and LGAs"he said

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