The Minister of State for Finance, Alhaji Yerima Ngama, yesterday in Abuja said the Federation Account Allocation Committee (FAAC) has temporarily put on hold, further depletion of the Excess Crude Account (ECA) to allow it accumulate before the “depletion mode” is activated again.
The Minister of Finance and Co-ordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala recently expressed concern over the continued depletion of the ECA from $20 billion in 2006 to only about $3.6 billion currently. She warned that the country could be in serious economic turmoil in the event of volatility in the price of oil.
The ECA was created to provide succour to the economy in volatile economic situations but experts have argued that there has not been any “rainy day” to necessitate its depletion.
The momentary relief over the ECA came as total distributable revenue amounting to N613.697 billion was yesterday shared among the three-tiers of government for the month of March.
Addressing journalists after the meeting of the committee in Abuja, Ngama said “the depletion has been stopped for now because there has not been any reason to augment revenue in the past two month as there has been enough money to share.”
He said the ECA is now in the “accumulation mode” after which the funds would be further depleted for developmental purposes.
He said: “When you say depletion, how do you deplete it? It’s when we distribute. Is that not so? Right now, I just told you that last month, we didn’t do any augmentation because we got enough revenue to distribute. This month, we didn’t do any augmentation because we got enough revenue to distribute. So, you see the depletion has stopped. Because there are two ways of depleting – either you augment or you distribute it to states because the excess crude belongs to all of us.
“In two consecutive months, we are not augmenting because we have enough revenue to distribute. That tells you that at least, one area of depletion has been taken care of and the other area is whether or not we would distribute. Right now, in this month of March, we are transferring to the excess crude N173.928 billion. So, it is actually increasing. Last month (February) we transferred N300.417 billion into excess crude…the excess crude is actually growing.
“Because the money is for development; now we are at the accumulation mode; we are not in depletion mode and it is good news that more money is going into the account and the account is growing.”
Meanwhile, Ngama noted that total funds available for distribution in the month under review increased to N726.772 billion, exceeding the projected fund by N224.216 billion in terms of the 2012 budget as a result of higher price of crude oil.
However, the Gross Income of N726.772 billion was lower than the N766.772 billion realised the previous month.
He blamed the shortfall on decrease in crude oil export for the month following several operational issues and safety challenges at Bonga, Brass, Bonny and Qua-Iboe terminals.
The total amount shared included an accumulated exchange gain of N48.820 billion and N7.617 billion refunded by the Nigerian National Petroleum Corporation (NNPC) from its N450 billion debt to the federation account.
Giving a rundown on the statutory distribution among the three-tiers of government, the minister said the federal government got N235.163 billion while the states shared N119.278 billion and the local governments got N91.958 billion.
Moreover, oil and gas producing states further shared N49.908 billion as derivative allocation.The sum of N64.229 billion was also shared as income from Value Added Tax (VAT).
