The Federal Government has taken a final step to liquidate the Excess Crude Account (ECA) whose management has been an issue of controversy, especially between states and the central government.
Following the decision, which was taken after a meeting President Muhammadu Buhari held yesterday with the Permanent Secretary, Ministry of Finance, Mrs. Anastasia Nwaobia, and Accountant General of the Federation (AGF), Mr. Ahmed Idris, among other top officials, the Federation Account Allocation Committee (FAAC) is set to distribute among the three tiers of government about $1.7 billion (N391 billion) left in the account by the administration of former President Goodluck Jonathan.
Yesterday’s decision came barely a week after Buhari, while inaugurating the National Economic Council (NEC) in Abuja, directed that henceforth; all revenues accruing to the country should be remitted to the Federation Account before distribution among the three tiers of government. The administration of former President Olusegun Obasanjo had in 2004 set up the ECA where surplus from the defined oil benchmark as fixed in the budget would be saved for augment of the federation revenue in case of disruption in the stream of income, largely from the oil sales.
As a result of the sharp rise in oil price, funds in ECA ballooned to over $20 billion by November 2008, from $5.1 billion in 2005. But by June 2010, the account had dropped to about $4 billion due to budget deficits at all levels of government and the steep drop in oil prices. States were not happy with the establishment of ECA and had queried the power of the Federal Government to force them to save with some arguing that the government did not seek their consent before setting up ECA. State governors, under the aegis of the Nigerian Governors’ Forum (NGF) had taken the fight over the establishment of ECA to the Supreme Court for adjudication.
They had asked the Supreme Court to declare ECA illegal but the case has made no headway in court as it has suffered many adjournments.
FAAC members, com-prising commissioners of finance of the 36 states of the federation and the Accountant-General of the Federation met yesterday in Abuja where they were expected to consider the funds remaining in the ECA account for sharing among the Federal Government, 36 states and the 774 local government councils. Idris told State House correspondents after the meeting with the president that the amount would be distributed based on approved formula. The $1.7 billion to be distributed is, however, less than the $2 billion, which Edo State Governor, Mr. Adams Oshiomhole, had told reporters at the NEC inauguration was remaining in the ECA. On the current state of the ECA, Idris said: “It is hovering between $1.6 and $1.7 billion and that is what we are going to distribute among all the three tiers of governments, the federal, states and local governments based on the approved formula.” On the sharing of the money, he said: “Even today (yesterday) we are going to meet.
The FAAC is going to meet and we are going to distribute as agreed and directed during the NEC meeting last week, and the position is very clear. What we met on ground is what we are going to distribute.” The NEC, at its inaugural meeting with Vice- President Yemi Osinbajo, had also directed FAAC to distribute funds in the ECA to the tiers of government to cushion the effects of the financial crisis facing the country, especially states many of which are in arrears of paying workers’ salaries. Idris said in line with the directive of the president, his office was working to ensure prudent management of all revenues accruing to the country.
“Well, the general message is clear; Mr. President had a clear direction and we all have to fall in line. This entails prudence management of resources and identifying more alternative ways of generating revenue, which we are set to do and to manage very efficiently and effectively the meagre resources we have for the betterment of the economy,” he added.
Nwaobia had earlier led Idris to the meeting with the president where they made further clarification of the handover notes from the ministry as presented by the immediate past administration. Nwaobia, in an interaction with State House reporters, said: “We are basically here to brief the president on the activities of the Ministry of Finance. Well routinely, we go on with our work, our functions as the Ministry of Finance have not stopped. Government is a continuum so all our mandates and functions we will continue to implement them as required.”
She assured Nigerians that the state of the nation’s finances was stable and not as shaky as being insinuated in some quarters. “The state of Nigerian finances is okay; our finances are still okay, though we are still going through challenges of revenue stream to government and this you know obviously is from the oil shock as the price of oil has dropped. “It has significantly reduced the revenue stream to the government, but we are working in other ways to see how we can shore up the revenue so that we will be able to meet our expenditures,” she stated.
Asked on what was the reaction of the president on their briefing, the permanent secretary said: “Obviously when you brief the president, he will tell you what he expects in certain aspects of your operations and we gave our briefings in that regard.” On the payment of fuel subsidy to marketers, she said: “We did not say that we will not pay subsidy; like the former minister said, there is a liability on subsidy, which is being verified by the Central Bank of Nigeria (CBN) and the Budget Office of the Federation.
“The issue had to do with the forex differentials which they were claiming and this committee is looking into it and as soon as it is resolved, we will be able to pay the verified amount also.” Nwaobia, however, dismissed allegations of looting in some ministries as a result of absence of ministers. “If people have evidence that there is a large-scale looting going on, they are free to come with such and the Freedom of Information Act allows that you ask questions so if there are ministries they are suspecting of embarking on a large-scale looting, which I think is not true, everybody is free to ask,” she added.
Credit: New Telegraph
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