Federal Legislators Pass ETF, Sovereign Wealth Bills

[TGD]

The two chambers of the National Assembly yesterday separately passed the Education Trust Fund (ETF) Amendment and the Sovereign Wealth Fund bills.

With the passage of the new ETF bill by the Senate, the agency is expected to focus more on the funding of Federal Government-owned tertiary institutions.

And, ahead of the June 7, 2011 election of its Presiding Officers, the House of Representatives also yesterday changed its voting pattern to open-secret balloting.

Due to the failure of the House to put its Electronic Voting Machine into use, it had been electing its presiding officers by the open balloting method of voting since 1999 when it was first inaugurated.

Finance Minister Olusegun Aganga has declared that the passage of the Bill on the Nigerian Sovereign Investment Authority (NSIA), remains the defining moment for country because it signifies the dawn of a prosperous nation.             

The Senate had last week also passed the Bill introduced by the Executive Arm of Government. The Bill seeks to enforce financial discipline in the management of Nigeria's crude oil revenue within approved budgetary and prudential guidelines.

Unlike what happens at the moment under the management of the Excess Crude Account (ECA) where resort is made every time, there is revenue shortfall for sharing among the three tiers of Government, withdraws from the NSIA would be strictly for critical infrastructural and investment purposes.       

The implication is that the three tiers would have to redefine their priorities and operate very tight monetary strategies to manage whatever is available. Only last week, over N100 billion was withdrawn from the ECA and shared at the monthly FAAC to the three tiers because of revenue shortfall.

But Aganga yesterday while commending the passage of the Bill by the House of Representatives said the party was over.

The House of Representatives also yesterday asked the Federal Government to name some streets in the Federal Capital Territory (FCT), Abuja after the 10 members of the National Youths Service Corps (NYSC) who were killed during the post election violence.

It equally asked that a more befitting compensation be worked out for families of the slain NYSC members.

Adopting a motion sponsored by Representative Dino Melaye, (ANPP, Kogi State), the House equally urged Governors of all the States of origin of the slain NYSC members to name prominent streets after them in those states.

Melaye argued that the some of five million naira given to each of the families of the slain NYSC members was not enough to compensate their families.

Hitherto, the ETF had been providing funds to the tertiary institutions, which was why it was established. It had also been providing intervention funds to basic and secondary schools in states, states ministries of education and their agencies. The latest development means that only federal and states government-owned tertiary education shall benefit from ETF intervention in the form of grants.

The bill however, empowers the ETF to set aside 10 per cent of its annual tax accruals for loans and scholarships to Nigerian students in tertiary institutions. The bill also made provision for tertiary institutions owned by the federal government by way of funding researches, equipping libraries and laboratories as well as award of scholarships.

Companies and individuals who fail to remit taxes commit an offence under the act that is punishable with six months jail term or N1 million fine or both – for first offenders – and 12 months jail term with N2 million fine for second time offenders.

It was noted that private universities will only benefit from the bill by way of having access to facilities created for research and publications by the government owned institutions.

The Bill sought among others to establish the Nigeria Sovereign Investment Authority charged with the responsibility of building a savings base for future generations, enhancing the development of infrastructure in Nigeria as well as aiding fiscal stability.

Having been passed by the Senate last week, the Bill will now go for the Presidential assent.

The fund will help the country save more of its oil revenue, which accounted for about 95 per cent of the nation's total revenue.

The sovereign fund, to be based in the capital, Abuja, will have a governing board headed by the president. Other members include governors of the 36 states, the ministers of finance, justice and planning, the governor of the Central Bank and the chief economic adviser.

Also yesterday, the House of Representatives condemned the Central Bank of Nigeria, (CBN's) new policy which pegged deposit and withdrawal of money at  N150,000 per transaction for individual and N500,000 for corporate body.

Adopting a motion by Representative Jumoke Thomas-Okoya (ACN, Lagos State), the House urged Federal government to prevail on the CBN to suspend the policy.

It advised that sufficient enlightenment be carried out before the policy could be introduced.

Defending her motion, Okoya stated that:

"If this implementation is successful, small scale businesses will automatically collapse, agro allied businesses will remain stagnant, thereby making the banking sector to completely suffer patronage.

" I urge the Executive to stop this policy or alternately raise the bar to a reasonable sum. Cattle sellers should be put into consideration, pretty traders, butchers market women. When people refuse to patronise banks crime will be on the increase and all of us will suffer", she added.

Source: Federal legislators pass ETF, sovereign wealth bills