Excess Crude Account nosedives to $3.59b …was nearly $10b in December 2012

Nigeria’s Excess Crude Account (ECA) yesterday fell to $3.598 billion from nearly $10 billion in December last year.
The crash in the figures was as a result of several withdrawals including the latest $1 billion withdrawn by the federal government to sustain the diminishing Federation Account which has dropped for over six months now.
The ECA is the joint Federal Government-States Account where excess budget benchmark crude oil price revenue earning is monthly being warehoused for special intervention at critical times.
The development is indicative of the financial glitch which has assailed the country following crude oil theft and shut-ins in the Niger Delta region as a result of activities of pipeline vandals.
The Co-ordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, recently alerted the nation that if the trend continued, crude oil revenue loss might grow up to about $12 billion.
The high revenue loss forced a compromise between the Federal and State governments to abandon the budgeted monthly revenue estimate for the distribution of funds to states as the estimate had hardly been met for a long time, making the Federal Government to look for funds from other sources to augment the amount for distribution by the three tiers.
Following the understanding reached in August, it was agreed that revenue distribution should be based only on available revenues generated for that month and not the monthly budget estimate. However, it was also agreed that the pending revenue shortfalls before that August compromise be settled fully.
As of yesterday, the pending revenue shortfall still being owed by the Federal Government was N146 billion.
As it has been the case for sometime now, the generated revenue for the month, though slightly higher than the previous month’s by N13.936 billion, fell below the budgetary monthly estimate. The estimate was fixed at N623.768 billion while available generated revenue is below at N458.901 billion
The approval by the President for the withdrawal of the $1 billion from the ECA yesterday excited the states which have been groaning under financial difficulties following the reduction of the oil revenue generation.
The Chairman of the States’ Finance Commissioners ‘ Forum, Mr. Timothy Odah of Ebonyi State, yesterday expressed their appreciation to the President for the intervention.
He said: “We are grateful to the President for his magnanimity in the approval of this $1 billion. This is not revenue augmentation because we have stopped that since August this year. What the President just did is to boost our take-home revenue following the dismal financial performance by the NNPC. This intervention would greatly boost our revenue bases and enable us to meet some of our obligations.
“On our own part, we are diversifying our revenue bases so that we don’t continue to depend on NNPC because it has failed to meet our expectations.”
The FAAC yesterday approved the distribution of N568.413 billion being statutory revenue generation for the month of October; the Value Added Tax (VAT) receipt; the N35 billion SURE-P fund and the N7 billion NNPC N450 billion earlier withheld revenue which it has been repaying since last year.
A breakdown of the distribution of the FAAC revenue indicated that the Federal Government’s 52.68 per cent share as outlined in the sharing formula amounted to N213.825 billion, less by N78.392 billion of the amount it collected last month.
The states’ 26.72 per cent share was N108.455 billion also less by N39.762 billion in comparison with last month’s receipt while the local councils are to share N83.614 billion,   representing their 20.60 per cent of their entitlement to the statutory revenue. Their collection went down by N30.655 billion when compared with last month’s.
The oil-producing states are to share N47.112 billion being 13 per cent of the entire oil revenue production for the month.
From the VAT revenue window, the Federal Government is to receive an additional N9.554 billion; the states N31.846 billion and local councils N22.292 billion.

- Guardian

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