16 June 2010

Nigeria: FAAC - Excess Crude Account Shrinks to $3.2 Billion - May Revenue Allocation Falls to N403 Billion

Nigeria's excess crude account has further shrunk to $3.2 billion from $4.6 billion last month, the Accountant General of the Federation said yesterday.Ibrahim Hassan Dankwambo said in Abuja at the Federation Accounts Allocation Committee (FAAC) that the reduction was because federal government dipped into the account to pay receipts such as subsidy to the oil marketers.

He did not say how much was paid to the marketers but however said in a communiqué issued after the FAAC meeting that N22. 7 billion was taken from the account to augment revenue shortfall for the month of May.

The balance in the account was $6.7 billion as at January, and got to where it is currently after series of withdrawals from the account by the government.

Also, government revenue in the domestic excess crude account has equally fallen to N29 billion from over N80 billion last month.

But the Minister of State for Finance Remi Babalola said the balance in the accounts was "sufficient for the next few months irrespective of oil markets."

Yesterday, FAAC allocated N403.4 billion revenue to the federal, states and local governments for the month of May. The amount included the month's statutory revenue of N340.131 billion; N40.543 billion VAT; and N22.740 billion augmentation for the shortfall.

In April, the three tiers of government received N749.883 billion which was comprised of the month's statutory revenue of N410.256 billion and the three months arrears of N340 billion.

The lower disbursal in May was caused by maintenance work and sabotage to oil facilities in the Niger Delta, according to FAAC.

"The decrease was attributable to maintenance work during the month at EA, Qua Iboe, Bonga, and Brass terminals resulting in the loss of production as well as fresh sabotage attacks on the Trans Forcados and Ebocha-Brass trunklines", a communiqué from FAAC said.

Speaking on the Nigerian National Petroleum Corporation (NNPC)'s debt of N450 billion to the federation account, Babalola said FAAC has directed the management of the Corporation to appear before it in the next meeting to explain how the money was going to be paid.

He with the current level of crude oil production in the country, NNPC may not have the money to settle the debt now.

"The question is, does NNPC has the ability to pay the N450 billion now?" the minister asked.

Meanwhile, Nigeria's consumer inflation fell to 11.0 percent year-on-year in May from 12.5 percent the previous month, the National Bureau of Statistics said yesterday. Growth in food prices, which form the bulk of the inflation index basket fell to 12.3 percent year-on-year from 14.3 percent in April.

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