Saturday, November 23, 2013

Missing Excess Crude Money: Amaechi raises more questions for Okonjo-Iweala

How much oil does Nigeria produce?
How much exactly has the country earned from its oil sales in 2013?
By Soni Daniel
The last appears not to have been heard on the claim that part of the
money in the Excess Crude Account (ECA) is missing as Governor Rotimi
Amaechi of River State, yesterday, faulted the Minister of Finance, Dr
(Mrs) Ngozi Okonjo-Iweala, on the matter.
In a point by point response to the position of the minister, who is
also the Coordinating Minister for the Economy, that the $5 billion
allegedly missing from the ECA had been shared to the three tiers of
government to make up for the revenue shortfalls during the Federation
Accounts Allocation Committee process while part of it also went for
SURE-P payments and the balance for subsidy payments to oil marketers,
the governor asked Okonjo-Iweala to shed more light on subsidy savings
since the reduction in petroleum subsidy, among many other questions.
Amaechi, who is also the Chairman of the Nigeria Governors Forum
(NGF), had, at the second retreat of the group, penultimate Saturday,
raised the alarm about the depletion of the ECA from $9 billion to $4
billion, saying the Federal Government had questions to answer about
the $5 billion balance.
Okonjo-Iweala debunked the allegation, saying no money was missing from the ECA.
In a statement, yesterday, entitled, 'Dr Ngozi Okonjo-Iweala – $5
billion is not missing from ECA – Rivers State Government's
position', the state government said that contrary to the Finance
Minister's claim "that Amaechi was closely involved and actively
participated in making requests to the presidency for the account to
be shared for the purpose of augmenting the regular allocations from
the Federation Account whenever there was a shortfall, Governor
Chibuike Amaechi and his colleague-governors have attended only one
meeting where ONE REQUEST was made for the sharing of $1billion from
the Excess Crude Account". Beyond that one meeting, the statement
said, there has been no other meeting where it was decided that money
from the ECA be shared among the three tiers of government.
"There is a position of the National Executive Council's (NEC) on the
matter of the Excess Crude Account. This position is that the savings
in the ECA belonging to all the states is not to be touched. Indeed
this is in tandem with the position of the Honourable minister that
the ECA is savings for all to be set-aside for the rainy day and not
to be "shared" in the manner she now seems to suggest. The Rivers
State Government finds it curious and very disturbing that our rainy
day savings has been "shared" in complete breach of the known
procedure for doing such and in what might be considered an under the
table and clandestine manner," the statement said.
"The appropriate procedure as the Honourable Minster knows is that
usually members of the NEC have to make recommendations to Mr.
President should there be need recourse to the Excess Crude account.
The Rivers State Government is certain that its Chief Executive and
Governor did not participate in any such meeting where any such
approval was requested or even discussed and given."
On the minister's claim that Rivers State received N56.2 billion from
the ECA between January and September 2013, the statement said the
state would not have any inkling that the money it received among
other state governments was funded from the ECA. "According to a
communiqué issued by the office of the Accountant General of the
Federation after the June allocation meeting, the sum of N7.617
billion refunded by NNPC and the N35.547 billion from the Subsidy
Re-investment Programme (SURE-P) formed part of the total
distributable revenue for the month. The communiqué confirmed that the
gross revenue for the month was N863.026 billion. This was higher than
the N590.777 billion received in May by N272.249 billion. It said very
unambiguously that the higher revenue was a result of increased crude
oil production due to the completion of pipeline repairs in some
terminals. There was also a significant increase in non-oil revenue
uring the period due to the receipt of accumulated arrears on
companies," the statement said.
"Rivers State government therefore finds it puzzling the suggestion by
the Honourable Minister that the savings for 2012 has been used to
fund the budget for 2013".
Raising posers on Okonjo-Iweala's explanation, the statement said:
"For the purposes of clarity and for avoidance of doubt, the Rivers
State government may respectfully request the Honourable Minister to
shed more light on the following:
· How much oil does the country produce per day?
· Clarification that the benchmark price for oil in the 2013
budget is $79?
· Is it a fact that crude oil was sold at prices that hovered
around $110 per day throughout the year?
· How much exactly has Nigeria earned from its oil sales in
2013 and what percentage of the budget is funded by these receipts?
"The position of the Federal Government has been that there are
shortfalls in production but does this position also take into
cognisance the over $30 differential between the benchmark price of
$79 and the actual sale price which averaged $110 per barrel during
the period. The position of the Rivers State Government is that the
differential of over $30 should have been enough to fund the shortfall
in production? Unfortunately there has been no accounting for this
huge differential. Perhaps the Honourable Minister may assist us in
putting this in better perspective".
'Piggy bank'
The statement continued: "Governor Amaechi's position in Sokoto was
that the ECA is being managed like a piggy-bank contrary to provisions
of the law and in a manner that does not allow for transparency and
accountability, a position which the Honourable Minister's rebuttal
now seems to confirm, as can be noted in the third issue she raised in
her response.
"According to her, the SURE-P is being funded from the ECA. But the
President, in his broadcast, had stated that SURE-P 'is designed to
manage and reinvest the Federal Government's share of the savings from
the partial reduction of subsidy on petroleum products.' It was not
and is not meant to be that SURE-P is to be funded from ECA nor can
the Federal Government unilaterally withdraw money from the ECA to
balance payments to oil marketers. Indeed the statement of the
Accountant General of the Federation previously quoted gives credence
to this position – 'N35.547 billion from the Subsidy Re-investment
Programme (SURE-P)' formed part of the total distributable revenue for
the month.' It has been the understanding of the Rivers State
government that SURE-P is funded from the extra money realised from
the pump price of petroleum, which Nigerians protested against when
the pump price of fuel was raised. Is the Honorable Minister telling
Nigerians that the SURE-P is now being funded from the ECA! Might it
then be true as was recently suggested in the National Assembly that
over N500billion of SURE-P money may be missing?
"The issues raised by Governor Amaech were raised purely out of
concern for the need for accountability and safeguarding the wealth of
future generations of Rivers people. It is for this purpose and to
this end that we most respectfully seek clarification of the
· How much oil does Nigeria produce?
· Where is the differential between the oil pump prices?
· What price is our oil being sold for?
· How much have we earned from our crude oil sales in the last year?
· What percentage of budget 2013 does our crude oil sales revenue fund?
· Can the Honourable Minister assist in shedding more light on
the subsidy savings since the reduction in petroleum subsidy?
"As a government that is also a major stakeholder in the
administration, we believe that answers to these very pertinent
questions would put paid to whatever false or misleading
informationmay have been put out or peddled in the public domain".

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