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Economic Confidential, April 2008

 

Power Scam: Facts on Withdrawal from Excess Crude Account 2005-2007

By Labaran Saleh

 

In a Memorandum dated 15th June 2006 submitted the same day by the Revenue Mobilisation Allocation and Fiscal Commission on Alleged Withdrawals of Funds from the Federation Account, the Chairman of the Commission, Engr. Hamman Tukur informed the Joint Senate Committees of Appropriation and Finance investigating the Withdrawals of Funds from the Federation Account that the Excess Revenue Account, from which all the withdrawals have been effected, is made up of: Federation Export  Crude, Oil, Excess PPT, Excess Royalty which are in dollars while there also exists, another account for excess revenue known as the Excess Domestic Crude Account for amounts over and above the budgeted benchmark for crude oil allocated to the Nigerian National Petroleum Corporation for domestic consumption.

 

In a document exclusively obtained by the Economic Confidential magazine, it has been discovered that since 2003, the Federal Government has been maintaining these accounts.  The reasons may be that the Federation is saving for a rainy day or that the Federal Government wishes to ensure macroeconomic stability by controlling money supply, mopping up excess liquidity as well as building protective mechanisms against inflation and fluctuations in oil prices.

 

On the withdrawal from the Excess Revenue Account, the Commission submitted that Section 162(3) of the 1999 Constitution of the Federal Republic of Nigeria provides that only the Federal, States and Local Government Councils shall directly benefit from the Federation Account which was reinforced by the Supreme Court judgment in the case of Attorney-General of the Federation Vs Attorney-General of Abia & 35 others (N0. 2) (2002) 6, NWLR, Part 764.  In spite of this Constitutional provision, there were arbitrary withdrawals to fund some projects withdrawals from the Federation Account, particularly the Excess Revenue Account.

 

While the Commission said it was deeply concerned by the epileptic nature of energy supply, which invariably, is the fulcrum of our desired economic development, however, it observed that: “deductions have continued unabated from the Federation Account in the name of developing power in the Niger-Delta which should have been from the Federal Government of Nigeria’s budget. If these withdrawals are advance payments, it is hoped that each is supported by a due process bank bond guarantee.  There is no time limit for the deductions considering the speed at which some of the deductions were made. The terms and conditions of the “loans” have also remained unclear.

 

“The amounts are said to be loans as consented to by the stakeholders, but the Federation Account Allocation Committee, has not received any formal document indicating that the stakeholders have agreed to give out loans from the Excess Revenue Accounts. Obviously, a Governor of a State has no legal right to commit the funds of his State without the express approval or appropriation by his Assembly. Is ALGON an authority to agree/approve committing Local Governments’ funds as loan of any description?

 

“Why is it that there is change of name from Niger-Delta Power Holding Company to National Integrated Power Project? It may be necessary to find out who is actually being paid these huge deductions from the Federation Account.”

 

As at that period and records from FAAC files show that the sum of $1,045,259,903.23 was drawn from either the Excess Crude Fund or from the Excess PPT Revenue Fund for financing the power projects under three different titles, as follows:

 

Niger Delta Power Holding Comp. Plants (NDPHCP)

From Excess Crude Account

             Date          Description                                           Amount

          04/10/05       Funding of NDPHCP 1st payment               $ 98,359,656.76

          01/12/05       Funding of NDPHCP 2nd payment               $ 77,802,405.75

          21/12/05       Funding of NDPHCP                                $      664,271.18

          29/12/05       Funding of NDPHCP                                $      609,145.25

                                                          Subtotal                  $177, 435, 478.94

(b)      NNPC Joint Venture Operation Gas for NNDC Plants

              Date         Description                                                 Amount

          28/12/05       NNPC JVO – Gas                                    $213,230,000.00

 

(c)      National Integrated Power Project (NIPP)

          (i)       From Excess Crude Oil Account:

                   Date             Description                                           Amount

                   01/02/06       Funding of NIPP                           $   1,934,586.98

                   06/03/06       Funding of NIPP                           $209,502,464.45

                   29/03/06       Funding of NIPP                           $ 87,559,556.44

                   05/04/06       Funding of NIPP                           $      138,023.88

                   20/04/06       Funding of NIPP                           $   2,778,144.55

                                      Subtotal                                    $301, 912, 776. 30

 

 

(ii)      From Excess PPT Account:

                       Date         Description                                           Amount

                   23/04/06       Funding of NIPP                           $ 46,634,800.37

                   05/05/06       Funding of NIPP                           $      453,800.37

                   05/05/06       Funding of NIPP                           $   2,200,854.99

                   05/05/06       Funding of NIPP                           $      209,225.12

                   05/05/06       Funding of NIPP                           $300,736,493.00

                   17/05/06       Funding of NIPP                           $   2,095,024.64

                   17/05/06       Funding of NIPP                           $      351,449.50

                                                   Subtotal                       $352, 681, 647. 99

Grand Total                                                              $1, 045, 259, 903.23

 


 

How Deduction Continued Unabated to the End of OBJ Tenure

While the administration of President Olusegun Obasanjo refused to heed the warning, Economic Confidential can authoritatively reveal that the government continued to make further illegal deductions from the Excess Crude Account till June 2007, a month after handing over to President Umaru Musa Yar’Adua to the tune of $3.9bn. In the updated table of the deduction submitted to public hearing of the House of Representatives’ Committee on Power and Steel, the figures from deductions from excess crude account has risen from $1bn in 2006 to over $3.97billon as detailed below:

 

Deductions for the National Integrated Power Projects (NIPP) from

the Excess Crude, PPT/Royalty Accounts

S/N

DATE

DESCRIPTION

AMOUNT ($)

1

12/28/2005

NNPC JVO-Gas for NDDC Plants

           213,230,000.00

2

12/31/2006

Funding of NIPP

             96,626,397.78

3

12/31/2006

Funding of NIPP

             77,760,524.25

4

12/31/2006

Funding of NIPP

                  654,377.69

5

1/2/2006

Funding of NIPP

2,392,901.21

6

6/3/2006

Funding of NIPP

209,502,464.45

7

29/03/2006

Funding of NIPP

87,581,025.97

8

5/4/2006

Funding of NIPP

138,078.56

9

12/31/2006

Funding of NIPP

61,289,305.15

10

25/04/2006

Funding of NIPP

2,779,685.75

11

5/5/2006

Funding of NIPP

453,800.00

12

5/5/2006

Funding of NIPP

2,200,854.99

13

5/5/2006

Funding of NIPP

346,047.45

14

5/5/2006

Funding of NIPP

3,007,364.93

15

17/05/2006

Funding of NIPP

2,095,024.64

16

17/05/2006

Funding of NIPP

351,449.50

17

19/05/2006

Funding of NIPP

4,080,037.05

18

30/05/2006

Funding of NIPP

57,680.11

19

12/6/2006

Funding of NIPP

6,193,719.97

20

15/06/2006

Funding of NIPP

4,414,072.54

21

6/22/2006

Funding of NIPP

28,824,336.21

22

22/06/2006

Funding of NIPP

14,040,860.21

23

22/06/2006

Funding of NIPP

8,112,750.01

24

27/06/2006

Funding of NIPP

20,394,447.33

25

4/7/2006

Funding of NIPP

9,053,976.32

26

4/7/2006

Funding of NIPP

9,433,189.27

27

4/8/2006

Funding of NIPP

12,926,905.65

28

4/7/2006

Funding of NIPP

289,913,161.02

29

4/7/2006

Funding of NIPP

2,899,131.61

30

4/7/2006

Funding of NIPP

125,004,315.87

31

4/7/2006

Funding of NIPP

24,631,712.76

32

4/7/2006

Funding of NIPP

1,250,043.16

33

14/07/2006

Funding of NIPP

89,850,000.00

34

14/07/2006

Funding of NIPP

898,500.00

35

14/07/2006

Funding of NIPP

356,757.25

36

26/07/2006

Funding of NIPP

3,082,971.64

37

26/07/2006

Funding of NIPP

9,514,591.25

38

26/07/2006

Funding of NIPP

49,755,446.29

39

9/8/2006

Funding of NIPP

721,142.27

40

9/8/2006

Funding of NIPP

538,293.07

41

9/8/2006

Funding of NIPP

3,835,594.12

42

11/8/2006

Funding of NIPP

77,310.22

43

14/08/2006

Funding of NIPP

29,672,040.47

44

14/08/2006

Funding of NIPP

27,686,597.47

45

16/08/2006

Funding of NIPP

311,546.48

46

16/08/2006

Funding of NIPP

187,954.28

47

17/08/2006

Funding of NIPP

71,217.47

48

18/08/2006

Difference in Euro etc. Conversion

24,576,753.54

49

12/9/2006

Funding of NIPP

3,712,458.21

50

12/9/2006

Funding of NIPP

4,307,266.97

51

12/9/2006

Funding of NIPP

847,623.20

52

14/09/2006

Funding of NIPP

19,945,095.52

53

26/09/2006

Funding of NIPP

128,522.81

54

26/09/2006

Funding of NIPP

2,453,337.63

55

26/09/2006

Funding of NIPP

6,974,264.29

56

4/10/2006

Funding of NIPP

603,051.00

57

5/10/2006

Funding of NIPP (Pipelines)

1,300,000,000.00

58

22/01/2007

Funding of NIPP

1,184,806.74

59

22/01/2007

Funding of NIPP

10,377,197.21

60

22/01/2007

Funding of NIPP

2,545,733.95

61

22/01/2007

Funding of NIPP

14,320,839.77

62

22/01/2007

Funding of NIPP

19,018,301.90

63

22/01/2007

Funding of NIPP

8,564,540.70

64

22/01/2007

Funding of NIPP

10,411,201.94

65

24/01/2007

Funding of NIPP

169,602.00

66

24/01/2007

Funding of NIPP

23,878,195.65

67

24/01/2007

Funding of NIPP

676,569.29

68

24/01/2007

Funding of NIPP

17,702,429.92

69

21/02/2007

FGN Investment Ibom Power Project

80,000,000.00

70

22/02/2007

Funding of NIPP

21,424,090.00

71

22/02/2007

Funding of NIPP

495,448.37

72

22/02/2007

Funding of NIPP

2,283,586.73

73

22/02/2007

Funding of NIPP

922,101.95

74

26/03/2007

Funding of NIPP

19,478,790.00

75

26/03/2007

Funding of NIPP

3,326,171.62

76

26/03/2007

Funding of NIPP

65,633,762.84

77

26/03/2007

Funding of NIPP

15,575,892.08

78

26/03/2007

Funding of NIPP

72,198,369.10

79

30/03/2007

Funding of NIPP

925,688.42

80

30/03/2007

Funding of NIPP

5,014,789.41

81

30/03/2007

Funding of NIPP

6,374,714.87

82

23/04/2007

Funding of NIPP

1,268,512.92

83

23/04/2007

Funding of NIPP

613,680.33

84

7/5/2007

Funding of NIPP

9,065,250.60

85

7/5/2007

Funding of NIPP

4,696,506.58

86

11/5/2007

Funding of NIPP

1,439,754.65

87

11/5/2007

Funding of NIPP

3,392,985.12

88

22/05/2007

Funding of NIPP

34,855,231.34

89

22/05/2007

Funding of NIPP

14,430,984.94

90

1/6/2007

Funding of NIPP

10,915,580.27

91

1/6/2007

Funding of NIPP

227,338,683.25

92

1/6/2007

Funding of NIPP

698,686,293.00

93

1/6/2007

Funding of NIPP

2,908,776.50

94

5/6/2007

Funding of NIPP

13,992,307.78

95

5/6/2007

Funding of NIPP

23,320,597.30

96

5/6/2007

Funding of NIPP

9,008,288.91

97

6/6/2007

Funding of NIPP

2,481,213.73

 

TOTAL

 

$3,974,394,148.82

The Economic Confidential obtained this table from the submission of RMAFC at the Public Hearing of House Committee on Power and Steel in March 2008

   

Essay

Reforming the Nigeria Customs Service - By Dr. Mansur Muhtar

 

Boosting Revenue through Non-Oil Taxes -By Remi Babalola

 

The Global Financial Crisis and Implication for Nigeria By Dr. Okonjo-Iweala

 

FEATURES

The Plight of Displaced People in Warri- By Yushau A. Shuaib

 

The Other Side of Re-Branding Nigeria - By Saka Raji audu

 

Yet, Another Airforce One Trajects Over Nigeria - Norris Benedict

 

Quota System will Abolish Nigeria – By Chinedu Vincent Akuta

 

Labour and Minimum Wage Expectations - By Les Leba

 

The Politics of Fuel Scarcity and Re-Deregulation in Nigeria  By Kola Ibrahim

 

Power Sector: The Glimmer of Hope- By Segun Imohiosen

 

Still on African Informatics Olympiad- By Segun Imohiosen

 

Raising the bar in flood management – By Sadatu Ovosi

 

Award of Contract as ‘Achievement’ - BySalisu Suleman

 

The North persistent poverty -By Kabiru Danladi

 

G-20 Summit and Nigeria’s Dream - By Prince Ikeokwu

 

 More Features

 

TAX MATTERS

Historical Milestone as Online Tax Payment Begins

 

FIRS Seals Two Oil Companies Over $610m Tax Arrears

 

Firms Owed Govt N260b in Taxes

 

Tax Identification Number to Reduce Tax Evasion- FIRS Boss

 

Revenue Agencies to Make Full Disclosure- Finance Minister

 

FIRS Delists 2 Banks over Non-Remittance of Tax

 

FOCUS

Budget 2009 of Kwara State

 

Budget 2009 of Kaduna State

 

Budget 2009 of Kano State

 

Nigeria Extractive Industries Transparency Initiative (NEITI)

 

Reviewing the Impact of FAAC in 2008

 

Guiding Principles for Disaster Risk Reduction Strategies in Nigeria

 

 

MORE FACTS

*Federal Allocation: How They Share N892bn in May 2008

 

*Table of Budget 2008 for NASS

 

*Breakdown of Disbursement of $2billion to FG, States and LGCs

 

*Accruals in Respect of Signature Bonus from 1999 – June 2007

 

*2007 Monthly Revenue Collections and Transfer to Excess Crude Accounts