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NEITI audits federation account

By Oscarline Onwuemenyi
ABUJA—CHAIRMAN of the Nigeria Extractive Industries Transparency Initiative, NEITI, Prof. Assisi Asobie, said, yesterday, that the agency has begun a comprehensive audit of the Federation Account, to determine the impact of its management on the lives of Nigerians.
Asobie, who said this in an interview with Vanguard in Kaduna, noted that between 1999 and 2005, more than N15.9 trillion was shared among the three tiers of government.

He said that the Federal Government was allocated N5.138 trillion, 32.5 per cent, of the amount, while the states and local governments got N10.671 trillion, 67.5 per cent.

Prof. Assisi Asobie

Asobie who noted that despite the excess wealth generated from the abundant mineral resources in the country, many Nigerians still wallowed in abject poverty, stressed that the initiative would audit “why money that goes into the Federation Account and allocated through the states and local government don’t reach the communities that need them most.”
Constitutional empowerment

He said the constitution mandated the agency to ensure accountability and transparency in the application of resources, especially those from extractive and exploration activities, adding: “The Nigeria Extractive Industries Transparency Initiative Act 2007 mandates NEITI to promote due process and transparency in extractive revenues paid to and received by government as well as ensure transparency and accountability in the application of extractive revenues.

“We want to conduct this audit to find out how much actually goes to the Federation Account; is every part of the Federation getting its fair share, and how it is allocated. We are interested in finding out if such allocations are done according to the law.”

He noted that the audit would be done in conjunction with the Revenue Mobilization, Allocation and Fiscal Commission, RMAFC, since that is their primary responsibility, noting: “We want to ensure that when these funds are allocated, the receiving party expend them on priorities that lead to development. It is going to be a revolution, and we are determined to do this within the year.

“It is a well known fact that the bulk of Nigeria’s revenue emanates from extractive industries, especially oil and gas. The revenue from this sector is swept into the Federation Account and allocated monthly to the three tiers of government.

“Clearly, there is no correlation between the proportion of revenue received from the Federation Account and the reduction of the level of poverty for the entire regions of the country.”

Asobie lauded the Federal Government’s initiative to directly distribute 10 per cent dividends derived form the sale of oil products to host and impacted communities in oil producing areas of the country.

He, however, added: “There is a difference between simply sharing money and making the citizens share in the oil wealth which is derived from their lands. The later case not only compensates for the devastation of their environment, but ensures that they become part and parcel in the business of protecting installations and other equipment in their areas and making sure that they do not get vandalized.”

Asobie who noted that poor management of the wealth generated from the exploitation of oil and other mineral resources had left the country worse off than its contemporaries, said: “Nigeria is a victim of resource curse. Nigeria is a rich country of very poor people. It has the largest proven reserve of petroleum in Africa, and boasts of no less than 35 solid minerals, much of which is largely unexploited. Yet, Nigerians living in extreme poverty constituted 70 percent of the population in 2003 and 54 percent in 2007.”

The NEITI chief also noted the recent Presidential directive to probe the NNPC was a direct result of activities of the organization over the years to ensure a proper audit of how national revenues from the nation’s oil and gas resources are collected and used.

He said: “If you look at what they are doing, they are going to use the audit report that we produced covering 1999 to 2004, and 2005. If you look at the report, you will find that the NNPC has not been paying all the money it gets from sale of domestic crude into government’s account.

“Although the NNPC has given reasons for this, saying that they are also owed subsidy payments, but we insist that is not the way it should be done. There are things we discovered in the audit which call for more inquiries into how these revenues are collected and allocated.”


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