Nigeria’s Excess Crude Account depletes 73% in three weeks

Nigeria's Excess Crude Account depletes 73% in three weeks

December 20, 2018 Olufemi Aduwo 

Nigeria's ministry of finance building

Controversy trailed Wednesday's revelation by the Federation Accounts Allocation Committee (FAAC) that the excess crude revenue account savings has been depleted to only $631 million within three weeks.

Barely three weeks ago, Minister of Finance, Zainab Ahmed, disclosed at the end of the committee's meeting in Kaduna on November 25, 2018, that the balance in the account stood at about $2.319 billion.

It was not clear how about $1.688 billion, almost 73 per cent, left the account in a space of three weeks.

Excess Crude Account is a special account established to warehouse excess revenues from the prevailing crude oil price at the international market. Income generated above the approved crude oil benchmark price in the annual budget is saved in the account.

Withdrawal from the account is subject to the approval of the three tiers of government and the Executive Council of the Federation (FEC).

It was not clear when the decision to draw from the account was taken and for what purpose.

But, at the end of the FAAC meeting for December in Abuja on Wednesday, Permanent Secretary, Federal Ministry of Finance, Mahmoud Isah-Dutse, said the money was withdrawn to settle the last tranche of the Paris Club loan refund to states.

Mr Isah-Dutse, who disclosed that a total of N812.762 billion was distributed between the federal, states and local governments for November 2018, announced that the balance in the excess crude account stood at $0.631billion as at December 19, 2018.

Asked how the savings in the account was depleted from $2.319billion in late November and to $0.631billion on December 19, Mr Isah-Dutse said the decision was taken that the final payment for Paris Club loan refund to states be drawn from the account.

When his attention was drawn to the apparent illegality in drawing money from the ECA without approval, the Permanent Secretary said the approvals came from the President and the FEC.

The decision was taken that the refund should be funded from the excess crude account, and the right approvals were obtained," he said.

Pressed further for clarification on who exactly gave the approval, the Accountant General of the Federation, Ahmed Idris, asked PREMIUM TIMES to approach the National Assembly to confirm if they were not aware of the approval to withdraw the money from the account.

Meanwhile, a communiqué by the Technical Sub-Committee of the FAAC showed gross statutory revenue stood at about N649.629 billion, which is lower than about N682.161 billion realised in the previous month by N32.533 billion.

Details of the total distributable revenue of N812.762 billion comprised the Statutory Revenue of N649.629 billion, Gross Value Added Tax of N92.079billion, foreign exchange equalisation of N70 billion and exchange rate gain of N1.055 billion.

From the gross statutory revenue, the federal government received N280.913 billion, representing 52.68 per cent; states N142.483 billion, or 26.72 per cent; and local government councils N109.848 billion, or 20.60 per cent.

About N47.882 billion went to the oil producing states as 13 per cent derivation revenue.

The distribution of the Value Added Tax (VAT) showed the federal government got N13.259 billion, or 15 per cent; states N44.198 billion, or 50 per cent, while the local government councils got N30.938 billion, or 35 per cent.

The communique said revenue from company income tax (CIT) increased significantly during the month, while revenues from Value Added Tax (VAT), Import Duty, Petroleum Profit Tax (PPT) and Foreign Oil and Gas, Domestic Oil and Gas Royalties all decreased.