Vanguard (Lagos)

Nigeria: Excess Crude Account Drops to U.S.$5.27 Billion

The Minister of State for Finance, Mr. Yerima Ngama, has said that the country's Excess Crude Account (ECA) has dropped to $5.27billion. He made this known after the monthly Federal Accounts Allocation Committee(FAAC) meeting in Abuja.

Following the outcome of the FAAC meeting, the National Economic Council (NEC) approved total sum of $2 billion for distribution to the three tiers of government out of which, only $1 billion was distributed.

In all, the total sum of N721.505billion was shared by the Federal, States and the Local Governments for the month of April. However, a breakdown of that figure shows that the Federal government got N108.235 billion representing 15 percent, while the states got N360.750 billion representing 50 percent. The local government councils clinched N252.52675 billion, representing 35 percent of the total sum.

Earlier last week, the World Bank had warned Nigeria on the need to shore-up its ECA to guard against external shocks. The figure released by the Committee showed that the distributable Statutory Revenue for the Month was N531.332billion, while there was an augmentation of N92.436 billion. Also distributed was N7.617billion Nigeria National Petroleum Corporation (NNPC) monthly refund to FAAC.

In addition, the sum of N35.549 billion was proposed for distribution under the Subsidy Reinvestment and Employment Programme (SURE-P).

Ngama said the shortfall in non-oil revenue was due to shortfall in rice duties as according to the minister, importers have reduced the importation of rice. "Importers of rice have already reduced their importation because of increase in duties for rice. And this is because government has invested a lot in building dams and developing irrigation channels. Government has a policy of stopping the importation of rice by 2015, so what we are already doing is to fast track that."

He explained that the delay in getting transfers to States by the Central Bank of Nigeria has been resolved by FAAC. He said that the apex bank would not need to get authentication from the Committee before carrying out the transfer to states.

"One of the issues we discussed is the issue of the delay in getting authentication, We agreed that for all FAAC related payment, CBN does not need to get authentication from the Federal Ministry of Finance because they are represented in FAAC and whatever we approve they already know. They do not need to write to us before they take action."

Speaking to newsmen after the briefing, Chairman, Commissioners of Finance Forum, Mr. Timothy Odah, revealed that although $2billion was approved by NEC, only $1billion has been distributed. According him, states should be prudent in the management of their resources.

"This is a piece of advice going to the various states to try very hard because this monolithic economy we've been practicing. It appears to be creating much more problems than the benefits to us. States should try as much as possible to apply it to a well meaning investment for we don't know what will happen in the subsequent session.

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