Economic Confidential, November 2, 2008

NEWS UPDATE

Another Controversy over N13.6tr Excess Revenue

Another controversy may likely brew on who should account for over N13.6tr shared between 2004 to date, Economic Confidential gathered. The Revenue Mobilization Allocation and Fiscal Commission (RMAFC), the constitutional body empowered to monitor accruals and disbursement of revenue from the Federation Account has disclosed that N13.6 trillion excess revenue appropriated by the federal government and state governments from 2004 does not have record of spending and do not seem to be reflected in a subsequent year budget proposals to the legislators at the federal and state levels

It could be recalled that the Federal government in 2004 introduced the concept of crude oil benchmarking as one of its budgetary assumptions on the crude oil side and revenue targets for the non oil sector. Excess revenue is the accruals above the targeted revenue on the sales of crude oil.

This discovery was disclosed recently at a brainstorming session organized by the commission on Budgeting System and Socio Economic Development in Nigeria.  

The Chairman of the Commission, Engr. Hamman Tukur said  Federal and state governments controlling the accounts do not seem to render returns adding that the  worse of all is that nobody ask any questions on these accounts. He added that “every now and then, some arbitrarily determine amounts are being withdrawn without any clear legal authority from excess crude account.”

He regretted that local government councils in the country are being denied their legal share. A typical example, he cited was the distribution of $2.8bn early this year to only the federal and state governments.

He nevertheless pointed out that the money is used for funding of federal projects, payments of debts, funding petroleum subsidies, all of which are not known in law or due process as ruled by the Supreme Court

‘Beneficiaries at the federal and state government levels do not seem to submit to their various assemblies supplementary budgets indicating these additional revenues-reciepts. The assemblies do not seem to complain either, despite the fact that in a democratic set up, expenditure of any amount must be appropriated by the legislative arm’ the chairman said

Engr. Tukur also protested the sharing of a part of the Federation Account to the three tiers of government in dollars and the denial of local government councils of their share of the Federation Account by some state governments.

He regretted that although President Umaru Yar’Adua had ordered the reversal of the trend, the directive had been ignored.

The Chairman also pointed out that many sources of revenue had not been captured in official record as a result of illegal practices some agencies especially on signature bonus, NLNG dividend, proceeds from privatization, sales of government properties, proceeds of the Education Tax Fund, cost of collection of revenue by the responsible agencies, excess crude account and tax waivers and concessions.