FG draws down $3bn from Excess Crude Account

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Prof. Ukwu I Ukwu of Ebonyi State University (left) discussing with Chairman of Fiscal Responsibility Commission Alhj. Aliyu Jibril Yelwa (right) while Director of Finance Ministry of Power Ahj. Yusuf Muhammed Agabi (middle) looks on during meeting to undertake study on budget implementation. PHOTO BY Gbemiga Olamikan

By Emma Ujah
ABUJA — THE  appetite for more funds by the three tiers of government has forced the Federal Government to draw down a $3 billion in one fell swoop from the Excess Crude Account, leaving behind a mere $460 million.
Accountant-General of the Federation, Alhaji Ibrahim Dankwambo, disclosed at the monthly Federation Account Allocation Committee, FAAC, meeting, in Abuja, weekend, that $1 billion of the amount was set aside for the Sovereign Wealth Fund.

An unprecedented N704.273 billion was shared among the three tiers of government as representing revenue for July which would be used to meet August expenditures.

The decision to share $2 billion from the Excess Crude Account in addition to the monthly federally collected revenue was indication of the large spending portfolios across the three tiers of government.

Some fear this money would, in actual fact, go into political campaigns rather than development purposes.

Revenue  mobilisation

Interestingly, it was agreed by the three tiers of government and the Revenue Mobilization Allocation and Fiscal Commission, RMAFC, in 2007 that at least N1 trillion should always be left in the excess crude account.

According to the document, N413.710 billion was realised into the federation account from mineral revenue accruals largely dominated by the contribution of the Nigerian National Petroleum Corporation, NNPC, and other mineral revenues. But the AGF told journalists that “the NNPC brought in excess of N500 billion to federation account, noting that the excess as stipulated by the law will be saved.”

For the month of July, N407.426 billion was approved for disbursement but N404.273 was shared among the units which represented about N3.153 less than what was shared in the previous month.

Earning from the Value Added Tax declined to N42.840 billion to create a short fall on what was expected to be shared for the month of July.

According to the AGF, “The increase (distributable statutory revenue) was attributable to the higher prices of crude oil in the international markets and improved tax drive (even when VAT did not met its target).

Dankwambo added that for the month of July, “there was no exchange gain (forex) and augmentation because the prevailing exchange rate of N147 per USD is lower than the N150 per USD set as bench mark; and the revenue inflow for the month is higher than the monthly approved figure.”

The Nigerian National Petroleum Corporation, NNPC, deducted N44 billion from 504 billion oil revenue.

The nine crude oil producing states were allocated N35.735 billion as 13 percent derivation. Eventually, the Federal Government went home with N171.579 billion; states N87.027 and local councils N67.094 billion.

The Federal Inland Revenue Service, FIRS, also got N2.556 billion as (four percent of its total collections for the month) as cost of collection and Nigeria Customs Service, NCS, was given N1.899 billion (seven percent of its collections) as cost od collections.

In her remarks, the new Minister of State for Finance, Hajiya Yabawa Wabi said the Federal Government would “reposition the nation’s economic performance as we get along with the global trend of events”.

She charged members of the FAAC to imbibe the spirit of togetherness and be seen to be guided by the need to look beyond the short time horizon, which the present economic reality seems to impose on them and take decisions that would transform policies into actions would in sustainable economic growth.

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