Federation Account records N36bn deficit

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The reduction in Nigeria’s oil production quota by the Organisation of Petroleum Exporting Countries (OPEC) has cost the nation N35.54 billion as the three tiers of government shared N250.04 billion and $1.5 billion excess crude fund.

 

The amount was approved for sharing by the Federation Accounts Allocation Committee (FAAC), at a meeting held at the weekend.

 

The FAAC meeting, which was held in Makurdi, Benue State, was chaired by the Minister of State for Finance, Mr. Remi Babalola and attended by the Accountant General of Federation (AGF), Alhaji Ibrahim Dankwambo and state commissioners for finance and accountants-general.

 

Representatives of the Revenue Mobilisation Allocation and Fiscal Commission, Central Bank of Nigeria, the Nigerian National Petroleum Corporation (NNPC), Nigeria Customs Service, Federal Inland Revenue Service, Departments of Petroleum Resources and the Debt Management Office also attended the closed-door meeting.

 

The AGF, speaking at the end of the meeting, attributed the deficit of N35.54 billion in the revenue allocation to the three tiers of government, when compared with the revenue shared in January 2009, to the decline in crude oil prices in the international market and the reduction in production quota of OPEC, a body to which Nigeria belongs.

 

According to him, Nigeria ’s production quota was cut back to 1,673,000 barrels per day (bpd) in January 2009 from 2,050,000 bpd in December 2008.

 

“In addition, there was also a complete shutdown of Tebidaba flow station and subsequent loss of about 30,000 bpd as a result of another attack by militants,â€ÃƒÆ’ƒâ€šÃ‚ he added.

 

A statement signed by him revealed that N2.77 billion and N1.51 billion were paid to Federal Inland Revenue Service and Nigeria Customs Service, respectively, being four and seven per cent cost of collection.

 

Out of the statutory allocation of N215.86 billion, the Federal Government received N102.53 billion (about 52.68 per cent), a decline of N12.15 billion when compared with the N114.68 billion it received in the preceding month.

 

The 36 state governments got N52 billion (about 26.72 per cent) from statutory allocation, a drop of N6.17 billion as against the previous month’s receipt of N58.17 billion, while the 774 local government councils were allocated N40.09 billion.

 

The 13 per cent derivation accounted for the balance of N21.24 billion and was distributed among the nine oil producing states of Abia, Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Ondo and Rivers.

 

The states received the lion’s share of the VAT amounting to N17.09 billion (about 50 per cent), a decrease of N5.03 billion when compared with the preceding month’s level of N22.12 billion.

 

The states were closely followed by the local government councils which received N11.96 billion (about 35 per cent), while the Federal Government’s VAT amounted to N5.13 billion.

 

Babalola, who told journalists that the amount distributed was made up of statutory allocation of N215.86 billion and five per cent Value Added Tax of N34.18 billion, also disclosed that the three tiers of government had in the preceding month shared N285.58 billion, made up of statutory allocation of N241.33 billion and VAT of N44.25 billion.

 

He said, “The total amount declared and recommended for distribution is N250.04 billion in addition to the sum of $1.5 billion. The $1.5 billion was proposed for distribution from the Foreign Excess Crude Savings Account to all tiers of government.â€ÃƒÆ’ƒâ€šÃ‚

 

The National Economic Council (NEC) had on March 10, 2009 approved that $1.5 billion be shared among the federal, state and local governments from the excess crude account.

 

The release of the money is aimed at cushioning the effects of the slide recorded in the federal allocations in January and February.- Tribune

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