Juliana Taiwo
19 December 2007
Abuja — The Federal Government has halted the last minute rush for award of contracts by ministries and parastatals, saying presentation of contracts at this time of the year is inappropriate and against budgetary practice.
At the weekly Federal Executive Council (FEC) meeting yesterday, the government, however, rectified the presidential anticipatory approval for the contract for repair of the Third Mainland Bridge in Lagos.
The contract was awarded in favour of Messers Borino Prono Company Limited in the sum N766, 672,500 with the completion period of five months.
It was also revealed at the meeting, the last for 2007, that a total of $3.3 billion (about N390 billion) concessional foreign loans were taken from various world lending organisations between 1999 and 2007.
FEC, at the meeting chaired by President Umaru Musa Yar'Adua, therefore warned of the consequences of Nigeria relapsing to a debtor nation soon after settling her Paris club debts.
Briefing State House correspondents at the end of the meeting, the Minister of Information and Communication, Mr. John Odey, and his Finance counterpart, Dr. Samsudeen Usman, said FEC reviewed the situation and the various loans, raising concern that the Federal Government alone took $1.3 billion of the loan while the states took $2 billion.
Usman expressed the council's fear that Nigeria stood the risk of relapsing to a debtor country except conscious effort was made to halt the trend of borrowing.
He said 27 of the 34 papers presented to FEC at the meeting were for last minutes contract consideration but because of the President's strong disapproval, the ministers withdrew the memos.
Usman said: "It is important to mention a paper that was taken; it was an information memo and details of all the concessional credit that Nigeria has taken from the lending agencies like the World Bank, African Development Bank (ADB), Islamic Development Bank and IFAD from 1999 to date. Nigeria has got concessional credits to the tune of about $3.3 billion. out of this, $1.3 billion has been taken by Federal Government directly and the $2 billion has been lent to states basically on a number of projects in the education sector, health sector and infrastructure development.
"Obviously there were some concerns that Nigeria should not slide back into a debtor nation and these concessionary credits were given the details to show that there are basically providing additionality.
"The resources that are available at the state and federal level no matter how much money we think we have at the moment we simply do not have enough to do everything that needs to be done even by the governments not to talk of the private sector.
"But there is still the caution that these loans when they are taken. one, it must provide additionality and two, it should also be used effectively. The point was made that with the involvement of development partners; there should be a very valid and lucid implementation mechanism and monitoring to ensure that the loans are used for the purposes for which they are taken.
"The second area FEC considered is that out of the 34 council papers presented today, about 30 were to do with contracts but of those, 27 had to be stepped down because the President and Council felt its quite inappropriate to be approving 2007 budget projects or contracts to be done out of the 2007 budget when in fact the 2007 itself is due to expire in the next few days. "Assuming the National Assembly approves the budget before the end of the year, then the 2007 appropriation Act will literally be over. So it was felt it was really inappropriate because its really not good budgetary practice and therefore we are going back to doing things the right way unlike what was done in the past, which means that by December 31, all ministries, departments and agencies are going to be asked to return all unspent money from 2007 budget. And its only what is appropriated by the government in the 2008 budget that will be spent in 2008. So we are getting back to the legal way of doing things and to the proper budgetary practices that should be observed."
Asked to put a figure to what the government was expecting to be returned by the ministries and parastatals, Usman said: "At this time, we cannot put a figure but we are working with the office of the Accountant-General and before the end of December, we will be in a position to do that."
The finance minister also said discussion was on for the plans next year to improve budgetary performance. "We are going to be looking at all the bottlenecks that exist in the system today whether its from the due process office, or the accountant-general's office or the Ministries, Departments and Agencies (MDAs) wherever. We shouldn't be approving 2007 contracts at this time of the year and that point was made very strongly by Mr. President and it was the ministers themselves that voluntarily withdrew the papers they had earlier submitted for this meeting.
"We are going to improve all the monitoring of the budgets so that by September/October, a large chunk of the budget would have been implemented and not just approving projects and not giving money or approving projects when we know in reality it will not be implemented in the year in which the approval was taken", he said.
Odey said the meeting was brought forward because of the Sallah holidays.
He said FEC considered a memo from President Yar'Adua seeking the release of funds to states for the Millennium Development Goals (MDGs) projects and programmes under the conditional grant scheme and release of funds to the Ministry of Health to cover funding gap for the 2007/ 2008 rounds of immunisation against the wild polio virus.
"You will recall that some savings accrued to the Federal Government through the negotiated debt relief deal with the Paris Club group of creditor nations, the President directed that the savings be utilised to scale up poor projects and programmes that will fast track the achievement of the MDGs in the country.
"Council rectified the anticipatory approval for the release of N1,567,983,146 only to the Ministry of Health to fund the November round of polio immunisation day.
"Council received and approves another memo from the Ministry of Health seeking approval for the payment of 100,000 doses of cerebrum spinal meningitis vaccines for the 2007 Hajj pilgrims in the sum of N109,156,250 in favour of GlaxoSmithKline Pharm-aceutical Nigeria Limited.
"Council also rectified the presidential anticipatory approval for the contract for the repairs of the Third Mainland Bridge in Lagos in favour of Messers Borino Prono Company Limited in the sum N766, 672,500 only with the completion period of five months.
"FEC in its 31st meeting today extends its felicitation to all Nigerians on the triple occasion of Ed-Kabir, Christmas and New Year celebrations in 2008," he said.
Be the first to Write a Comment!
Copyright © 2007 This Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
