The controversy of funding NIPP and the economy - Business Day

Presenting the 2008 federal budget to the National Assembly on November 8, 2007, President Yar'Adua made it crystal clear that the federal Government planned to fund the National Integrated Power Projects (NIPP) scheme with alternative funding. By this, the government did not contain the NIPP funding plan in the federal budget. The major alternative source scheduled for funding this scheme happened to be the excess crude oil account jointly owned by the three tiers of government in Nigeria.

Meanwhile the excess crude oil account is an account specially created for the excess revenue accruable to Nigeria from oil sale above the budget benchmark, which in the 2008 budget is pegged at $53.8 per barrel. However the minister of state for energy (power), Fatima Balabe Ibrahim recently disclosed that the plan by the Federal Government to fund the NIPP scheme with the excess crude oil money had been distorted by the court injunction obtained earlier in the year by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC). This was just to buttress President Umaru Musa Yar'Adua’s comment that funding of the NIPP scheme would no longer be feasible with the excess crude oil account, in view of a court order restraining the government from utilizing the excess crude account.

Specifically, the NIPP scheme was initiated by the immediate past Administration as a strategic initiative to boost power generation in the country by 65 percent of the required output by end of 2010. It could be recalled that Obasanjo's administration had estimated the required funds for implementing the NIPP scheme and Manbila Hydroelectric Power Plant Project in Taraba State at $7.3bn, with the NIPP scheme gulping $4.1bn for projects scheduled to come on stream at end of year 2007 and the Manbila Project taking the balance of $3.2bn. In line with the construction schedule, the NIPP plants are supposed to be generating power output with a total combined generation capacity of 4,500 megawatts on completion. Invariably, other sectors would drastically improve on their total output of goods and services while the value of our imports will be reduced this the value of naira and the overall Gross Domestic Product (GDP) will improve substantially. Full Story