The Federal Executive Council (FEC) on Wednesday approved a policy recommendation to extend the usage life of government assets.
The assets include plants, equipment, lands, properties, and machinery.
The Minister of Works and Housing, Babatunde Fashola, who made the disclosure at the end of the Federal Executive Council (FEC) presided over by President Muhammadu Buhari, said the new recommendation will ensure proper disposal while saving government expenditure.
According to the minister, the purpose of the policy is to seek better enforcement of the financial regulations of the government, especially the revised 2009 regulations with regards to valuation process for plants, equipment, land, property and machinery, and also how they are disposed of when they become disused.
He said: “This policy is premised on Executive Order 11 that enthrones maintenance as a conscious government policy. And we think that because of that, government assets should last longer than the life cycle usually prescribed in the existing financial regulations, such as four years and nine years for other classes of machinery.
“The other context behind the policy was also in order to help the government manage expenditure in the face of revenue challenges on certain items of governance. For example, if you slow down the depreciation policy on vehicles, your replacement rate slows down as well.
“With the new approval, the depreciation threshold for vehicles changes from four to six years. Plant and machinery would also have a 10-year depreciation period instead of the existing timeframe in the financial regulation.
“Also, the ministry proposed a strategic percentage depreciation rate per year for vehicles with two litre-engines and those above two liters.”
To ensure proper accountability, Fashola said Ministers will now be fully involved in the procurement process as they must now sign off requests for valuation of properties of their respective ministries, departments and agencies.
“We also proposed that heads of the Ministry as accounting officers must sign off now on request for valuation of properties, especially when agencies are trying to buy properties.
“We have seen that sometimes ministers are not even aware that proposals are being made for acquisition of some type of assets. Essentially, the council approved all of the policy recommendations.
“They should go to the Ministry of Finance, which is in charge of making the financial regulations in order to effect the necessary regulation,” Fashola added.
The Council also approved the sum of N28.1 billion for the augmentation of road and other infrastructural projects in Wasa District of the Federal Capital Territory (FCT).
The Minister of the FCT, Mohammed Bello, explained that the augmentation was as a result of inflation which has overtaken initial approval of N56 billion for the Wasa District projects.
He put the total project sum at N85 billion with a completion period of 42 months.