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Excess crude spendings illegal – Fiscal Com boss

Yelwa, told Vanguard that the Federation Accounts Allocation Committee, FAAC, had not been adhering to provisions of the law.

FAAC not adhering to provisions of the law

By Omoh Gabriel, Business Editor

LAGOS—THE consistent withdrawal of funds from the excess crude account by the Federal Government for sharing among the three ties of government has been described as illegal and against the provisions of Section 35 of the Fiscal Responsibility Act which provides that money in the account can only be withdrawn if the price of crude maintains a consistent fall below the budgeted benchmark for at least three months.  
Chairman of the Fiscal Responsibility Commission, Alhaji Aliyu Yelwa, told Vanguard that the Federation Accounts Allocation Committee, FAAC, had not been adhering to   provisions of the law.

Yelwa said: “This is where I talk about discipline and self respect. This law was passed by our own legislative organ of government, which means it is binding on all of us. To derive the benefits of this law, we must respect the law ourselves.

”The law says we should put the excess over and above the pre-determined price of the commodity aside. Nobody says it is not your money. It is your money. But the law says you can fall back on it if there is a drop in price below the pre-determined price for three months, consecutively.

“And, even if you have to draw down from the account, do not draw for party campaigns. Do not draw down to pay salaries. The law provides that this money can only be drawn down for capital and human development projects. But, I wonder when we would have the honesty to stick to that law.

Pushes for more fund accumulation

”I told someone that I am not concerned about the sharing of the money but about the accumulation. As far as I am concerned, the division should be based on the formula for sharing the federation revenue among the beneficiaries of the Federation Account.

The law provides that this money can only be drawn down for capital and human development projects, but I wonder when we would have the honesty to stick to that law; Alhaji Aliyu Jibril Yelwa, Chairman of the Fiscal Responsibility Commission intoned.

“But I do not see how each state would say, ‘let me have a separate account and put my own excess crude oil proceeds in it.’  This is why we have aggregated investment. Even in terms of economics, if you are saving N1 million and I am saving N2 million, I am likely to have higher interests on my deposit.

”Let us be honest with ourselves. The law has made clear provisions on the utilisation of the funds. If you have any issue with revenue, the first thing you do is to look at the budget afresh. You may find that certain items could be delayed to a latter time. But simply because this money is in the account, everybody is saying, ‘bring the money it is already raining. Let’s bring out the whole money and share.”

Yelwa said: “What is a budget?  It is a covenant between the governed and the governors.  Yes, we are going to have so much and we are going to do this and this and this for you. The law provides that the budget implementation must be published.  And, that publication has to be in the print (newspapers) and the electronic media.

“Well, I know for certain that government agencies are producing the reports because we insist they must be produced. But publishing is what we do not have yet. When you look at the MDAs, there are about 28 ministries and other agencies of government. The agencies are also expected to produce their annual accounts and publish them.

Agency threatens court action

”According to the Fiscal Responsibility Act, the accounts must be produced and published within three months of the end of their financial year. There are some of them that just produce for their boards. There are even some of the agencies and departments that think they do not need to be accountable to the public. Our duty is to ask them and to the extent of contemplating suing them if they fail to follow the law.

”To us, the most important provision of the law with regard to transparency is Section 51 which gives every member of the public the right to take the Federal Government or any of its agencies to court and seek to know what is being done.

Right now, I know there is one such on-going at the High Court in Lagos where an individual has taken the President and the Federal Government to court.”

“This,” Yelwa said, is ”seeking to know what is being done about the implementation of the budget. In the past, the chief executive officer of a government agency can shrug his shoulders and say ‘what is your business?  After all you are not the only Nigerian.’  That has changed. Now the law has given every Nigerian the right to seek to know how far government and its functionaries are complying with the covenant between government and the people.

”This is a nation with vast resources but incapable of marshalling those resources for Nigerians. There was a time when we used to think that money was not our problem at all, it was how to spend it. There were times we didn’t plan how to spend the money.

We didn’t consider that nature has provided two seasons for Africa. We have the rainy season and we have the dry season.  In the dry season, you harvest cocoa, you harvest groundnut, and you harvest everything.  When the rains come, everything comes to a stand-still.”

See detailed interview in Financial Vanguard

Don’t draw down on excess crude account for election campaigns


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