December 11, 2009 04:09AMT
The Federation Accounts Allocation Committee (FAAC) ended its monthly meeting in Abuja yesterday with a firm resolution, giving the Nigerian National Petroleum Corporation up till next month to furnish it with a repayment plan for its over N450 billion indebtedness to the federal government. The meeting was for the month of November.
After months of requests by the FAAC for the corporation to reconcile its payments to the Federation Account, and the disbursements for both subsidy for petroleum products supplies and joint venture cash calls, the management was said to have agreed to the debt without any indication as to when the repayment would be made.
But, after a long deliberation at the meeting, the Minister of State for Finance, Remi Babalola, accompanied by the Accountant General of the Federation, Ibrahim Dankwambo, told journalists that they resolved to invite the petroleum corporation’s Group Managing Director, Mohammed Barkindo, to personally appear without fail during the next meeting of the committee fixed for between January 11 and 12, 2010.
“The meeting resolved that the NNPC must come by next month without fail to tell members how it would pay the outstanding obligations of N450 billion to the federation account. Specifically, the NNPC must come up with a repayment plan compulsorily, without any recourse to whatever relationship between it and the Federal Government,” Mr. Babalola said.
Revenue sharing
The minister disclosed that this month’s meeting was a departure from the previous ones, as there was no augmentation from the excess crude account of the statutory distributable revenue as a result of improved performance of the price of crude oil at the international oil market and the increasing positive impact of the federal government’s amnesty to former militant groups in the Niger Delta region.
Apart from the total distributable revenue of N286.9 billion, which shows an increase of N121.31 billion, or 73.24 per cent above October’s figure, there was also an additional revenue of about N95.35 billion as petroleum profit tax (PPT) on Production Sharing Contract (PSCs) by the multinational joint venture partners, as well as another N88.81 billion from the renewal of ExxonMobil’s oil mining leases (OMLs), which was paid into the excess crude account.
The amount also included the sum of N48.63 billion, which was recommended for distribution as exchange rate gain for the month, along with about N373.6 billion earnings from value added tax (VAT).
A breakdown of the figures shows that the federal government took the lion’s share of N136.75 billion, or 52.68 per cent, while the states went home with about N69.4 billion, or 26.72 per cent, and local governments N53.48 billion, or 20.6 per cent. The sum of N27.34 billion went for 13 per cent derivation revenue for oil producing areas.
In his opening remarks before the meeting, Mr. Babalola, had reaffirmed the federal government’s commitment to transparency and accountability in the management of the Federation Account by adhering to the provisions of the enabling Act, which mandates it to share allocations to the three tiers of government in line with the extant laws of revenue allocation.
Saying government is in the process of publishing a compendium of all allocations made to the various tiers of government, the minister said the committee will continue to maintain openness and fairness, to avoid “the constant temptation of slipping into less regulated ways of wielding power, of becoming less democratic as we go along.”
He said, “There is no better way to achieve integrity and accountability within government and government transactions than by promoting transparency and openness. Nigerians must be able to know how the operations of the Federation Account work and have confidence that the authority vested in us has been exercised appropriately.”
Reviewing the outgoing fiscal year, the committee chairman noted some achievements, which he said include its ability to resolve the protracted problem of the one per cent commission charged by the Central Bank of Nigeria (CBN) on the refunds due the Federation Account as a result of the Paris Club debt exit inherited by the present administration, as well as the ability to make the NNPC acknowledge its indebtedness.
Source: https://nigeriannewsdirect.com/
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