In response to challenges in the power sector, especially in the generation sector, the Federal Executive Council (FEC) on Monday approved the extension of the current Central Bank of Nigeria (CBN) interventions to the sector.
The extension is in furtherance of government’s continued efforts to support the power sector, specifically the generation arm of the sector, according to Zainab Ahmed, minister of Finance.
The minister disclosed this on Monday while briefing State House correspondents after the extended Federal Executive Council meeting presided over by Vice President Yemi Osinbajo.
The move is part of government’s palliative measures to sustain power generation with the CBN’s intervention.
“This is based on a commitment that we signed into as a country, where we have several guarantees to the generation companies (GenCos) to bridge any gap that they have after the Nigerian Bulk Electricity Trading Plc (NBET) has settled them,” Ahmed said.
“The facility that we got approval for today is to pay the GenCos for any financing shortfall that they have after the bulk trader NBET settles them. So it is a cost on government, it is a loan government will be paying it back to the central bank. The essence is to meet the contract obligations that government signed with the GenCos on the assurance we gave them on off-taking any power that they generate after payment is made from the NBET,” she said.
FEC also approved 0.2 percent import levies on some goods to fund Nigeria’s membership subscriptions in the Africa Union (AU).
“It approved a rate of 0.2 percent as a new import levy on Cost, Insurance, and Freight (CIF) that will be charged on imports coming into Nigeria but with some exceptions. The exceptions include goods originating from outside the territory of member countries that are coming into the country for consumptions,” Ahmed said.
“It also includes goods that are coming in for aid and also goods that are originating from non-member countries but are imported through specific financing agreements that ask for such kinds of exemptions. It also exempts goods that have been ordered and are under importation process before the scheme was announced into effect,” she said.
The purpose of this new levy, she said, is to enable the AU member countries to pay on a sustainable basis their subscriptions to the Union.
“The council also approved that for Nigeria, knowing that what will accrue from this new levy will be more than what is required as subscriptions to the African Union, the balance that will be left will be put in a special account in the Central Bank of Nigeria and will be used to finance her subscriptions to multilateral organisations as the World Bank, African Development Bank, Islamic Development Bank and institutions like that. And if there is any excess left from that in the revenue pool, it will be used to finance the budget,” she said.
“On the AU levy, the African took this decision to enforce this levy and so all AU member countries are to implement this decision. So what we are trying to do in Nigeria is to domesticate and implement this decision that was taken in Kigali on the 27th Assembly of the Heads of State and Government of African Union meetings.
“The decision council took today is that we will open a central bank account for that particular purpose so that all the funds collected by the Nigerian customs will be pooled into that account. And when the AU raises a subscription invoice, we will settle from that account and whatever is left, we can use it also to settle our subscriptions to other multilateral institutions and if there is anything left, the balance is used to finance the budget,” she said.
The minister revealed that FEC also approved the setting up of the steering committee to be chaired by Vice President Osinbajo for the design and implementation of a national single window.
“The national single window is a web portal that would be able to integrate all the government agencies that are implementing in the port business or trading in the port system. The trading platform will enable better efficiency of port operations and we project that it will significantly increased government revenues,” she said.