Economic Council backs Commission on remittances to Federal Account

Cyril Okonkwo, Abuja

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The National Economic has thrown its weight behind the decision of the Federation Accounts and Allocation Commission, FAAC, to seek for clarifications on the remittances to the Federation Account by the Nigerian National Petroleum Corporation, NNPC.

Minister of Finance, Kemi Adeosun, stated this on Thursday while briefing State House Correspondents on the outcome of the meeting of the National Economic Council, NEC. presided over by Vice President Yemi Osinbajo.

“Governors really want action taken and they are fully in support of the positions of the Federal Ministry of Finance and the commissioners of finance not to approve those accounts until we get further explanations on some of the cost being implemented,” Adeosun said.

Federation account
The Minister, who is the Chairman of the FAAC said she briefed the NEC on the current deadlock in the federation account and explained what happened.

She said the deadlock was caused by the inability of the NNPC to clarify shortfalls in remittances to the federation account and certain deductions it made on its accounts. NNPC is operated as business on behalf of the Nigerian governments and the states of the federation.

“We have expectations of return and when that return fails lower than our expectations then the owners of this business need to act.

“So, that was what caused the deadlocked on Wednesday and we really felt the figures the NNPC was proposing for FAAC were unacceptable. We felt that some of the costs couldn’t be justified and so we have decided that rather than approve the accounts, we will go back and do further work. 

“However, we did brief both Mr. President and Mr. Vice President on the deadlock and asked for their support and their forbearance in this because the consequence of this is that, salaries might well be delayed in many states as a result of this…But we feel that in order to get to the accurate figures that we need, we have asked for forbearance and the governors and the Nigearian government are all in agreement that we need to get to the bottom of those figures,” the Minister explained.

Mr Adeosun said the insistence of the FAAC was borne out of the need to save now that the price of oil has risen to $76 per barrel, which means that the price of Nigeria’s Bonny Light has gone up to $78 per barrel.

“We want to be aggressively putting money away into the excess crude account. So we are very very conscious that this period, this window of relatively high oil price might not last and we will like to be able to save. If we cannot get into the federation account the sort of revenues we are expecting then we will not be able to save.”

Special funds
Adeosun said she also briefed NEC on the balances on the Nigeria’s special funds.

According to her, the balance in the Excess Crude Account stood at $1,916,742,289.60; the Stabilisation Account was N18,892,864,216.65, the Natural Resources Fund had N133,715,427,387.37.

Mercy Chukwudiebere