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Issues In The News

Excess Crude Account rises to $6.9bn

[Daily Times] Nigeria’s Excess Crude Account (ECA) increased to 6.9 billion dollars in July from 5.8 billion dollars in June, Dr. Yerima Ngama, the Minister of State, Finance said on Thursday.

Ngama and Babayo Shehu, Director of Fund, Office of the Accountant-General of the Federation, made the disclosure in Abuja at the monthly Federation Accounts Allocation Committee (FAAC) meeting.

Ngama, who spoke at the media briefing, said a total of N207.86 billion was transferred to the account in June, compared with N86.391 billion the previous month. With the addition, he said, the balance of the Excess Crude Account  stood at 6.9 billion dollars, bringing the country closer to the target of 10 billion dollars, as recently recommended by the National Economic Council.

“Once we reach that comfort level, then we can afford to do whatever we want to do with the money. But whoever examines the books will see that the government is strong financially, internally and externally–we have a reserve which is strong,” he said. “And this is the essence of the policy we are pushing in the Ministry of Finance to ensure that this country is financially sound and outstanding as far as financial management is concerned.”

On his part, Shehu explained that the naira account was a combination of both the exchange gain difference and the excess amount from non-oil revenue. He put the amount saved in the ECA at N115 billion.

Earlier, the minister had announced that the federal, states and local governments shared N526.6 billion from the Federation Account in June, a figure N6.876 billion higher than the amount shared in May.

Ngama said the country received a total revenue of N763.553 billion, compared with N579.301 billion in the previous month. He attributed the increase to revenues from company income tax, import duties and petroleum profit tax on production sharing contracts and modified carry arrangements.

Total revenue shared to all tiers of government include revenues from oil, Value-Added Tax (VAT), Subsidy Re-investment and Empowerment Fund Programme (SURE-P) and refunds by the NNPC.

Giving a breakdown of the distributable revenue among the tiers of government, the minister said that N467.007 billion was distributed as statutory revenue, after N88.66 billion was transferred to non-oil excess revenue.

He said that N35.5 billion was distributed among the three tiers of government under the SURE-P, while N7.61 billion NNPC refund was distributed to state and local governments.

A breakdown from the distributable revenue showed that the Federal Government received N218.3 billion, states received N110.73 billion and local governments N84.635 billion.

The total revenue distributed from VAT was N59.21 billion, compared with N60.084 billion distributed in the preceding month.

Under the VAT distribution, the Federal Government received N8.5 billion, states N28.4 billion, and local governments N19.8 billion.

A total of N41.8 billion (13 percent derivation) was shared among the oil-bearing states for the month of June.

The Minister said there was no exchange gains in June because the prevailing exchange rate of 154.87 to the dollar was lower than the 155 to the dollar budgeted for 2012.

On the SURE-P, the minister reiterated his earlier appeal to states to set up committees to monitor implementation of the funds.

SURE-P was initiated earlier this year, following the partial removal of subsidy on petroleum products. The Federal Government has received about N90 billion since then.

According to Ngama, the Federal Government’s share of the subsidy fund was being reinvested on healthcare, public transportation, vocational training and infrastructure projects.

“For the states and the local governments, what they do with their money is what their Houses of Assemblies decide. For the Federal government, we have a committee that is administering the use of the SURE-P and this has already started with the mass transit and public works programme,” he said.

He said the Federal Government would speed-up completion of some ongoing road projects, including the Abuja-Lokoja road and the East-West Road in Rivers, with SURE-P funds.

The Federation Account contains all federally-collected revenues, including receipts from oil and gas sales locally and internationally, royalties and VAT. The FAAC, which is chaired by the Minister of State for Finance, distributes revenue from the Federation Account monthly among the three tiers of government.

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About TransformationWatch

TransformationWatch is an online news site founded by Henry Omoregie It is focused on keeping tabs on the Transformation Agenda set out by the Nigerian leadership in the Local, State and Federal Governments. My mission is to observe, analyze and report milestones or slowdowns in promised service delivery in all the facets of governance in Nigeria (2011 and beyond). Readership is open to all Nigerians and friends of Nigeria alike, regardless of Tribe, Religion or Political divide. We are all in this together

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