Economy

FG approves N600bn facility for power sector

The Federal Government has approved a N600billion assurance facility for the power sector until June 2020.

The amount, which is contained in the 2020 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), is as a result of the failure of the Power Sector Recovery Programme (PSRP).

The document added that additionally, an accountability framework has been finalised by the federal government which will guide the drawdown of a $2billion World Bank Facility to support the implementation of the PSRP over the Medium Term.

The document said the federal government may consider a Tariff review over the medium term, subject to the Nigerian Electricity Regulatory Commission (NERC) review of the Multi-Year Tariff Order (MYTO).

According to the MTEF/FSP: “A N600billion payment Assurance Facility extension has been approved by the Federal Executive Council until June next year.

“In addition, an accountability framework has been finalized with conditions precedents which will guide the drawdown on the $2billion World Bank Facility (of which $1billion is a performance-based loan) to support the implementation of the FGN PSRP will be finalized over the medium term.

“Tariff review shall also be considered over the medium term, subject to NERC’s review of the Multi-Year Tariff Order (MYTO).”

The document also revealed that the federal government maintains a N20billion balance in the Ecological Fund for emergency response in the event of an unforeseen natural disaster in any part of the country.

“Aside flooding, there is no imminent natural disaster warning for Nigeria from any of the relevant agencies monitoring such. Nevertheless, the FGN maintains a N20billion minimum balance in the ecological funds accounts for immediate emergency response in the event of a natural disaster in any part of the country,” the MTEF said.

The MTEF/FSP document noted that the federal government as a result of the failure of revenue-generating agencies to meet non-oil revenue projection is working on the collection efficiency of major revenue generating agencies to be improved upon.

The federal government, the document said is carrying out ongoing efforts to improve Government Owned Enterprises (GOEs) through a Performance Management Framework whole reviewing their operational efficiencies and cost-to-income ratios.

“The FIRS is working to increase the taxpayers’ database from the current 20million to 45million before the end of 2019.

“In addition, efforts are ongoing to improve GOEs revenue performance by full implementation of a Performance Management Framework for the GOEs whilst reviewing their operational efficiencies and cost-to-income ratios and generally ensuring they operate in a more fiscally responsible manner,” the document said.

On tackling insurgency in 2020, the federal government said it shall deploy its strategy of dialogue and military force in the event of an upsurge in major security breaches.

According to the MTEF/FSP document: “The mitigation action largely remains the same from the previous year, a twin-track approach of dialogue and military force shall be deployed in the event of an upsurge in major security breaches.”

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