Nigeria's Minister of Finance, Ngozi Okonjo-Iweala
A Forum of Concerned Members of Federation Accounts Allocation Committee (FAAC) has slammed the federal government for misinformation and mismanagement concerning the federation accounts, including the failure of the NNPC to remit a whopping N2.983 Trillion into it in the past two years.
In a statement today, the group called on the National Assembly to investigate what it called “this apparent fraud” in Nigeria’s oil revenue, citing a level of impunity so high that no reference is now required to be made to the National Assembly by the Minister before the law could be varied.”
The Concerned Members described the latest report on the Federation Accounts credited to the Minister of State for Finance, Dr Yerima Ngama, as a calculated attempt to confuse the public regarding the revenue accrued to the Federation Account and give the impression that the government is under pressure to augment revenue shortfall, while in actual fact, the shortfall is as a result of poor management.
They said the revenue profile of the Federation as painted by the Honourable Minister of State is incorrect and amounts to a gross distortion of facts and empirical data of revenue accruing to the Federation Account.
“Specifically, while the Minister put the revenue earned in the month of July 2013 at N497.98 billion, the Central Bank of Nigeria (CBN) economic report for the same period stated that revenue from oil rose by 0.2 per cent to N645.65 billion, while gross non oil receipt (corporate taxes, custom and excise duties and custom’s special duties) was put at N404.53billion a total of N1090.18Bn revenue which was higher than the budget estimate of N702.54 billion approved by the National Assembly for July 2013,” the committee said.
They also drew the attention of the public to what it called “key outstanding and recurring issues” concerning revenue into the Federation Account Allocation Committee since 2011 especially the failure of NNPC to fully account and remit into it proceeds of all exports.
“The question the Honourable Minister of State for Finance need to fully address without further delay is whether the N2.983 Trillion held back by NNPC is not part of the revenue earned into the Federation Account meant for the three tiers of government,” FAAC stressed. “Why is the Minister not demanding full remittance into the Federation Account by NNPC and who are the people profiting from the fund held by NNPC in foreign accounts through delayed remittance and/or non-remittance to the Federation Account in most of the cases listed above?”
The group also drew attention to other serious issues of substantial non-compliance with the 2013 Budget and non-adherence to disbursement agreed at the monthly FAAC meetings, including the huge outstanding shortfalls agreed at our various FAAC meetings in line with 2013 budget pending disbursement as well as the very poor level of handling of FAAC meetings and the usually noticeable level of unpreparedness of the officials handling the Federation Account.
With reference to the latter, the group drew noted the situation in the last two years where FAAC members across the Federation make a minimum of two to three trips for the usual one day meeting, with scheduled meetings repeatedly cancelled at short or no notices at all and at grave travelling dangers to members.
“This allows officials including NNPC to have their ways at will with serious impact on finances of the three tiers of government,” the Concerned Members said.
They further stated that the Budget 2013 like all budgets in the past is an appropriation act of the National Assembly with the approved bench mark of $79pb.
“Currently, oil price is $114pb and at no time this year has the price of oil fallen below $95pb and with increases in our quota and production, there is no doubt that something is greatly amiss with the management of Nigerian Oil resources that requires sustained urgent attention by all parties, especially the National Assembly. We are grossly concerned and wish to state that this mess should not be allowed to continue.”
They also dismissed excuses by federal officials that Nigeria loses a total 400,000 barrel per day given the level of policing and the multi-billion dollar contract to ex-militants to ensure safety of oil pipelines and cargoes, expressing the hope that the alleged losses are not an organized theft of the country’s oil resources.
“We are equally disturbed with the gross level of impunity that has characterized non-adherence to the appropriation act as passed by the National Assembly and are further concerned that this level of impunity is now such that no reference is required to be made to the National Assembly by the Minister before the law could be varied,” the Concerned Members said.
FULL TEXT OF THE PRESS RELEASE
FG’s Insincerity over Revenue Earnings into the Federation Account
Our attention has been drawn to the reported plan by the Federal Government to abandon the revenue framework upon which the 2013 budget was prepared alleging persistent decline in the gross federally collected revenue accruing to the Federation Account and insisting that revenue will only be shared based on amount actually earned rather than what is budgeted.
The latest report which was credited to the Minister of State for Finance, Dr Yerima Ngama, and which is well circulated in the media is a calculated attempt to confuse the Nigerian citizens on the revenue accrued to the Federation Account and give the impression that the Federal Government is under pressure to augment revenue shortfall, while in actual fact, the shortfall is as a result of poor management.
This has necessitated our decision to put the record straight for members of the public. We wish to state that the revenue profile of the Federation as painted by the Honourable Minister of State, Finance is incorrect and amounts to a gross distortion of facts and empirical data of revenue accruing to the Federation Account.
Specifically, while the Minister put the revenue earned in the month of July 2013 at N497.98 billion, the Central Bank of Nigeria (CBN) economic report for the same period stated that revenue from oil rose by 0.2 per cent to N645.65 billion, while gross non oil receipt (corporate taxes, custom and excise duties and custom’s special duties) was put at N404.53billion a total of N1090.18Bn revenue which was higher than the budget estimate of N702.54 billion approved by the National Assembly for July 2013.
The attention of unsuspecting public is drawn to the key outstanding and recurring issues with revenue into the Federation Account Allocation Committee since 2011 especially the failure of NNPC to fully account and remit proceeds of all exports into the Federation Account.
For example, NNPC outstanding / underpayment to the Federation Account since 2011 to date are captured in the table 1 below:
Table 1: NNPC Outstanding to Federation Account
| SN | YEAR | Amount (NBn) |
| 1 | 2011 | 780 |
| 2 | 2012 | 930 |
| 3 | 2013 | 859 |
| Sub-Total | 2,569 | |
| 4 | NNPC Trade Debts | 414 |
| Total Outstanding from NNPC | 2,983 |
The question the Honourable Minister of State for Finance need to fully address without further delay is whether the N2.983 Trillion held back by NNPC is not part of the revenue earned into the Federation Account meant for the three tiers of government. Why is the Minister not demanding full remittance into the Federation Account by NNPC and who are the people profiting from the fund held by NNPC in foreign accounts through delayed remittance and/or non remittance to the Federation Account in most of the cases listed above.
More importantly there are also serious issues of substantial non compliance with the 2013 Budget and non-adherence to disbursement agreed at regular monthly FAAC meetings. The huge outstanding payment representing shortfalls agreed at our various FAAC meetings in line with 2013 budget pending disbursement is captured in the table below:
Table 2: Outstanding disbursement from 2013 FAAC Allocation
| SN | Month | Amount (NBn) |
| 1 | June 2013 Augmentation | 121 |
| 2 | July 2013 benchmark deficit | 140 |
| 3 | Balance unpaid on the approved N115bn August 2013 FAAC | 115 |
| Total | 376 |
Another serious major concern of members is the very poor level of handling of FAAC meetings and the usually noticeable level of unpreparedness of the officials handling the Federation Account.
In the last two years, FAAC members across the Federation make minimum of two to three trips for the usual one day FAAC meeting. It is on record that FAAC meetings are repeatedly cancelled at short or no notices at all and at grave travelling dangers to members.
This allows officials including NNPC to have their ways at will with serious impact on finances of the three tiers of government. Majority of members of FAAC are fully of the opinion that the current disruptive nature of FAAC meetings is a major strategy of the officials concerned to ensure lack of cohesion at our meetings and address critical issues in view of our usual busy schedules.
We wish to state that the Budget 2013 like all budgets in the past is an appropriation act of the National Assembly with the approved bench mark of $79pb. Currently, oil price is $114pb and at no time this year has the price of oil fallen below $95pb and with increases in our quota and production, there is no doubt that something is greatly amiss with the management of Nigerian Oil resources that requires sustained urgent attention by all parties, especially the National Assembly. We are grossly concerned and wish to state that this mess should not be allowed to continue.
Excuses by federal officials that the Nation loses a total 400,000 barrel per day is suspect giving the level of policing and the multi billion dollar contract to ex-militants to ensure safety of oil pipelines and cargoes. We hope this alleged losses is not an organized theft of our oil resources.
We are equally disturbed with the gross level of impunity that has characterized non-adherence to the appropriation act as passed by the National Assembly and are further concerned that this level of impunity is now such that no reference is required to be made to the National Assembly by the Minister before the law could be varied.
We therefore call on the National Assembly to investigate this apparent fraud in our oil revenue.
Signed:
Forum of Concerned Members of Federation Accounts Allocation Committee (FAAC)
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