Is $1 billion missing from the Excess Crude Account (ECA)?
This is the question Finance commissioners have been battling to resolve since yesterday when the Minister of State for Finance, Amb. Bashir Yuguda, disclosed that only $3.1 billion was left in the ECA.
Yuguda did not say when the $1 billion was withdrawn or what it was spent on.
Commissioners of Finance Forum Chairman Timothy Odaah said it was all news to them, adding that the matter would be discussed at next month’s FAAC meeting. “We were not in the know,” he said.
When the Minister of Finance Dr. Ngozi Okonjo-Iweala, first announced the government’s austerity measures a month ago, she stated that half of what was in the ECA would be withdrawn between then and January 2015, amounting to $2 billion.
What is not clear now is if the Federal Government has started making the withdrawal without the knowledge of the state governments and what the money is being spent on.
Before Yuguda made his announcement, Mrs. Okonjo-Iweala had given a hint of the government’s next set of economic measures amid the excruciating fall in the price of crude oil, which has affected revenue.
One of such plans is the possible increase in Value Added Tax (VAT).
Addressing journalist after a brief visit with members of the Federal Account Allocation Committee in Abuja yesterday, Mrs. Ngozi Okonjo-Iweala hinted that “in the medium term we will also look at tax policy, issues like the VAT. You know governors already rose from their last National Economic Council to say that they will like the VAT to be looked at.”
The possible increase in VAT, she said, “is a matter which has to be taken to the National Assembly. But you know that if we are able to make a movement on the VAT, it will benefit the states more.” Under the existing law, a flat rate of five per cent is charged as VAT on non-essential goods and services.
According to her, “the Federal Government only gets 15 per cent of the VAT but the states gets the rest. And we are desirous to see that they have a better time of it. So these are some of the issues that we put on the table and discussed.”
Asked if the possible increase in VAT will not lead to further hardship on the masses, Mrs. Okonjo-Iweala quick replied: “We are not increasing it yet. You know that the measures we already announced which would be announced in the budget tomorrow will have to do with some luxury surcharges that we are putting on and some of the longer or medium term measures that we put on the table we will look at because the National Assembly is also involved.”
“How we would go about it, you will know in the coming months,” she said. “Today was just for us to exchange views with the commissioners on what we should do at both federal and state levels to help manage the situation.”
Odaah said they discussed with the coordinating minister of finance was not necessarily increasing VAT but “creating a conducive environment for all to thrive”.
At the end of the FAAC meeting, N628.775 billion was shared among the three tiers of government, with N427.654 going to statutory allocations, N60 billion VAT and N6.130 as exchange gain.
The Nigerian National Petroleum Corporation (NNPC) brought an additional N55.601 billion and N36.873 billion was taken from the ECA to increase the money shared for November. SURE-P contributed N35.549 billion. The rest was completed with the usual N6.330 billion refund from NNPC to the federal government.
