By Oscarline Onwuemenyi
ABUJA -THE Revenue mobilisation Allocation and Fiscal Commission (RMAFC) on Friday warned that the execution of the joint venture cash calls (JVCC) initiated by the Nigerian National Petroleum Corporation (NNPC) was having an adverse effect on the nationâ€™s economy.
This warning was contained in a statement signed by the Chairman, Indices and Disbursement Committee of the commission, Alhaji S. M. Jega, a copy of which was obtained by our correspondent in Abuja .
It noted the â€œalarming effects of deductions for the JVCC payments on the Federation account,â€ pointing out that continued implementation of the joint venture contracts between the NNPC and multinational oil companies was obstructing the performance of the budget.
According to the commission, the country â€œmust first survive economically before it could think of any meaningful investments. The Federation account must always take precedence over any other commitments including that of JVCC.â€
It said that in spite of this appeal, the NNPC insisted on deducting the budgeted amount for the JVCC despite the continuous fall in production and reduced revenue inflow from the oil sector.
â€œThe commission is worried about the continued indifference of the NNPC to sustain the JVC deduction. For instance, in the month of August 2009, available records show that the NNPC did not only take the entire export crude earnings of $562 million, but also took another N13 billion from the domestic crude to pay JVC.
â€œThis implies that Nigeria did not benefit from the crude oil exported for the3 month under review. Invariably, the nation seems only to be serving the JVC,â€ it added.
RMAFC further noted that it â€œcould not understand the disconnect between the declining crude oil production and a sustained budgetary provision for the funding of the JVC.â€
It added, â€œIn simple economic sense, there should be a correlation between the declining crude oil production and the corresponding effects on both the countryâ€™s budget as well as the cash call funding.
â€œAfter all, profiteering is the basis for any investment and this does not seem to be the case for the joint venture investments in Nigeria .â€
Furthermore, the commission said it was equally worried about the monthly augmentation from the Excess Revenue Account, which might not be sustainable as the account may one day be exhausted.
It said while the outcome of the Presidential committee set up last month is awaited, the NNPC should return to the Federation account more than $17 million being the difference between the JVC budget and the amount currently deducted for the month of August, 2009.
â€œAlso, the N12.64 billion deducted from the Domestic Crude Account to pay for the joint venture contracts should equally be returned to the Federation account, and pending the outcome of the committee, there should be a moratorium on further JVC payments,â€ it stated
The commission further noted that it had requested an audience with President Umaru Yarâ€™Adua to discuss the disturbing trend, alongside the Minister of Petroleuem, the Minister of Finance, the Group Managing Director of the NNPC, and the Accountant-General of the Federation.
It said the President had appreciated the concerns of the commission and constituted an inter-agency committee under the chairmanship of the minister of petroleum, with representation from the ministry of finance, RMAFC, NNPC and the Nigeria Labour Congress.
â€œThe committee was directed to specifically examine the level of JVCC funding in relation to accruals into the Federation Account, adding that in the interim, the committee should meet and negotiate the amount to be deducted in respect of the JVCC for the month of July, 2009,â€ the statement added.