N543bn Withdrawn from ECA in Four Months

Minister of  Finance, Ngozi Okonjo Iweala

By Festus Akanbi
The sum of N542.94 billion ($3.4 billion) has been withdrawn from the Excess Crude Account by the three tiers of government comprising of the federal, states and local governments between January and April this year, THISDAY investigations have shown. The ECA was created in 2004 for the purpose of saving oil revenues above the defined budget benchmark price as well as excess revenues from other sources accruing to the federation.

Its objective is primarily to protect the Nigerian economy from the exogenous shocks arising from volatile crude oil prices in the international oil market and global economic crises.

In the 2012 budget, a $72 dollar oil benchmark was approved whereas the price of crude oil has trended above $100 per barrel at the international oil market since the beginning of the year.

However, data compiled last week showed that the three tiers of government have consistently withdrawn money from the ECA, bringing total withdrawals for the months of January to April to N542.94 billion.

For instance, in the month of January, while N485 billion was available for disbursement to the three tiers of government, a total of N614.4 billion was shared, with the balance of N139.4 billion taken from the ECA.

In February, N368 billion was available to the three tiers, but N620 billion was shared for that month. The difference of N252.738 billion came from ECA; in March, N402 billion was available to the three tiers, but N497.713 billion was distributed, with the balance of N95.713 billion coming from the ECA; while in April, N498 billion was available, but N563.089 billion was distributed, showing that N65.089 billion was drawn from the ECA.

In addition, data obtained from the Budget Office of the Federal Ministry of Finance, showed that the federation’s revenue receipts for the first four months of the year had exceeded budgetary expectations.

For instance, in the month of January, budgetary expectations for the month was estimated at N559.10 billion, but actual revenue for the month was N808.07 billion, showing a surplus of N248.97 billion; while in February projected revenue was put as N559.10 billion, as against actual receipts for the month of N582.50 billion, showing excess receipts of N23.40 billion.

Also, in March, projected revenue was also put at N559.10 billion, in contrast to N702.61 generated in the month; while in April, the sum of N502.55 billion was projected as revenue, but actual receipts in that month rose to N671.70 billion. Providing clarification on actual revenue receipts for the year, Dr. Bright Okogu, director general of the Budget Office of the Federation explained that the figures accruing to the federation was after statutory deductions had been made by NNPC to fund the crude oil joint venture cash calls, gas pipeline infrastructure projects and subsidy deductions.

“It is only after the statutory deductions that have a first line charge on revenue made by the federation, that the three tiers of government can deduct the balance, which was N808 billion in January, N582.50 billion in February, N702.61 billion in March and N671.7 billion last month,” he said.

SOURCE: ThisDay, 27 May 2012. http://www.thisdaylive.com