- Â Nâ€™Assembly yet to receive presidential communication on presentation
Omololu Ogunmade in Abuja
The Federal Executive Council (FEC) Thursday approved the 2018 Appropriation Bill.
Briefing journalists after the weekly FEC meeting, the Minister of Budget and National Planning, Senator Udo Udoma, who did not disclose details of the estimates proposed for the next fiscal year, said the disclosure could only be made by President Muhammadu Buhari.
He also said the federal government in liaison with the National Assembly would resolve the date of its presentation.
THISDAY had reported Thursday that the bill would be presented by the president on Tuesday. But lack of presidential communication to the National Assembly to that effect as at Thursday made the scheduled presentation technically impossible.
The minister, however, said the executive remained committed to its promise to make the estimates available this month.
Udoma said: “Council approved a draft 2018 budget proposal. So, we will be liaising with the National Assembly on a date in which the president will formally submit the budget to them.
“It is the president’s prerogative to submit the budget, submit the proposals and give the details. I will be operating above my brief if I do that; the Constitution gives that authority to the president.
“We did promise that the budget will be ready in October and it is ready in October. We are liaising with the National Assembly because they have to approve the date for the president to come and address them to submit the budget.
“Before now we use to submit in December but now the budget is ready in October so there is a very big difference.”
Also, briefing State House correspondents, the Minister of Finance, Mrs. Kemi Adeosun, said capital release for 2017 had increased to N450 billion from the less than N350 billion that it was as at June.
Adeosun said FEC also approved a Road Trust Fund (RTF) to facilitate private sector involvement in the provision of federal road infrastructure, explaining that investors who participate in the initiative would recover their investment through tax credits to be worked out with the federal government.
She described the fund as “a form of public-private partnership that will accelerate the provision of federal roads by allowing private sector operators to collectively fund road provision in exchange for tax credits.”
Adeosun listed the benefits of RTF to include: accelerated road development across the nation; reduction in pressure on the federal budget by allowing private engagement and cost reduction through the provision of a new benchmark in road costing.
She also said the fund would foster private sector participation in hitherto federal government monopoly by creating more efficient delivery of road projects.
Other benefits listed by her were: better negotiation and the promise of prompt payment to contractors; provision of alternate funding to the government for road infrastructure development and creation of a platform for collaboration among private sector players and between the private sector and government.
She explained that: “Federal roads are critical in unlocking socio-economic development. While they account for just 17 per cent of the total national road network, federal roads carry more than 80 per cent of national vehicular and freight traffic. (Nigeriaâ€™s road network consists of 200,000 kilometres of which 33,000 kilometres are federal roads according to the Ministry of Power, Works and Housing.
“The deficit in roads is so large that there is a need to mobilise additional funding sources. The Road Trust Fund is a revision of the existing infrastructure tax relief scheme that allows for tax relief to companies that incur expenditure on public infrastructure.
“To date, just two companies have been able to take advantage of this provision. The reason being that few companies are large enough to solely undertake road projects. The RTF, being a collective model, can mobilise funds from a range of taxpaying companies, irrespective of their location or sector. RTF is, therefore, expected to mobilise significant capital into road provision.
“RTF uses a collective model to mobilise private capital from companies of all sizes to undertake road projects through a series of Road Trust Funds. Each fund will be a stand-alone Collective Infrastructure Fund (CIF) using a Special Purpose Vehicle (SPV).
“We have already consulted with the private sector in the development of the RTF and some companies have already identified roads they wish to reconstruct and are organising their funding. However, this scheme is designed such that financial intermediaries will be promoting Road Trust Fund projects and soliciting commitments from interested companies.
“Companies will be allowed to recover 100 per cent of costs incurred on road infrastructure as a tax credit against total tax payable (including up to 10 per cent for cost of funds); accelerated depreciation to enable recovery in three years rather than four years for standard assets; and ability to directly intervene in roads that are critical to their businesses which drive competitiveness.”
The minister, who said once the roads were completed, they would be handed over to the federal government, added that the Ministry of Finance would develop detailed guidance notes on the provision of the new infrastructure tax incentive within the next 30 days.