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Nigeria: Govt Squandered N4.17tr in 2009

By Daniel Elombah

In 2009, except for the amnesty in the Niger Delta, Government was at standstill, the Populace was on strike, the refineries was not working, there was a fuel crisis, the president went on AWOL, but one thing continued unabated; the squandering and looting of national resources. The Federation Account Allocation Committee (FAAC) has said, a total of N4.174 trillion was taken from Federation Account in 2009 and shared amongst the three tiers of government - Federal, state and local governments - as allocations.

FAAC also revealed that a total of $5.5 billion was withdrawn from the foreign excess crude account in the same year and shared by the three tiers of government.

Our question is: what was N4.17tr + $5.5billion spent on?

Throughout 2009, The country' infrastructure is still in decay, the hospitals remain mortuaries, lecturers were on strike, doctors were on strike, nurses were on strike, schools were closed, the roads were impassable as they remained dilapidated, Schools were not built, PHCN (NEPA) supplied darkness rather than light, many state could not pay salaries, the refineries were not working, fuel crisis bit harder.

So we ask again: on what did the three tiers of government spend N4.17 trillion and $5.5billion?

The Press and the people should keep asking this question, starting from the Local Government Chairmen to the Governors and Mr. President.

Of the $5.5 billion, the amount is made up of $1.5 billion shared in March 2009, $2 billion distributed in August and $2 billion shared in October. To date, the balance in the foreign excess crude proceeds account is $6.8 billion.

Still the looting continues in 2010. Babalola said FAAC had again approved the sharing of N370.313 billion among federal, state and local governments from the total revenue realized in December 2009.

The amount represented a decrease of N3.258 billion from the previous month's record of N373.571 billion.

Giving a breakdown of the distribution, he said Statutory Allocation, N235.67 billion; Value Added Tax (VAT), N42.923 billion; budget augmentation disbursement, N51.85 billion; and exchange rate difference of N39.87 billion.

The Nobel Laureate, Professor Wole Soyinka, alleged yesterday that ministers are taking advantage of the absence of President Umaru Musa Yar'Adua, to commit economic crimes.

According to him, ministers are enjoying the absence of Yar'Adua, because everyone is now going on his/her own direction without presidential order. In this light, economic crime is being committed in this country, and this is an index of bad governance.

The ministers are enjoying themselves with the absence of Mr. President that is why the Federal Executive Council will never activate S.144 of the 1999 Constitution despite the incapacity of President Yar'adua:

144. (1) The President or Vice-President shall cease to hold office, if -

(a) by a resolution passed by two-thirds majority of all the members of the executive council of the Federation it is declared that the President or Vice-President is incapable of discharging the functions of his office; and

(b) the declaration is verified, after such medical examination as may be necessary, by a medical panel established under subsection (4) of this section in its report to the President of the Senate and the Speaker of the House of Representatives.

The situation in the country might not change unless the citizens could mobilise to speak against the unjust and unacceptable way the leadership of the country was being handled.

That is why the 'Save Nigeria Rally' held in Abuja is a good start, but more are needed

FAAC also said the Nigeria National Petroleum Corporation (NNPC) has agreed to meet with it on January 29 with a view to providing it with a schedule of payment of N450 billion, being outstanding obligation to the three tiers of government.

FAAC, had at its previous meeting, directed NNPC to come up with a repayment plan of the outstanding obligation to the three tiers of government at the next meeting of the committee.

You will recall that NNPC has moved from denying the debt to ignoring demands that it repay it.

How NNPC came by this fraudulent practice of withholding money due to the Federation Account should be a matter of concern to the anti-corruption agencies.

Government is pliant in asking NNPC to pay back the money.

Chief Remi Babalola, Minister of State for Finance and Chairman of the Federation Accounts Allocation Committee, FAAC, had last year expressed frustration after another futile period of waiting for NNPC to pay.

Nigerians should also note that even the National Assembly has not asked NNPC why it withheld the money and how it was used.

If NNPC is having difficulties paying back the money or has to draw up a repayment plan, it means it has used the money. Who approved an illegal expenditure of money that belongs to the Federation Account?

The money belongs to the Federal Government, 36 states (plus Abuja) and the 774 local government areas of Nigeria. It is not NNPC's money to be included in the billions of Naira of its accounts that have not been audited in more than eight years.

Another culpable Federal organisation that is not transparent is the Central Bank of Nigeria (CBN).

The tax authorities in Imo State sealed up CBN office in Owerri for tax defaults dating back seven years.

CBN Owerri Branch is alleged to have been deducting staff income taxes without remitting same to the tax authorities since 2002. The arrears amounted to N300 million, out of which CBN paid only N40 million the day before its office was sealed up. The arrears exclude 2009 deductions.

It is incredible that CBN which knows the importance of taxes to the operations of governments should behave in this manner. It is incredulous that it got away with this conduct for seven years.

Like NNPC, CBN was acting with the same flagrance most government agencies treat the law. In both cases, the law was breached. Where is the N300 million deducted over seven years? Who kept the money?

Still on the disbursement of N4.174 trillion, Minister of State for Finance and Chairman of FAAC, Mr. Remi Babalola, said the huge disbursements to the three tiers in 2009 was the highest injection into the system within a fiscal year in the last decade.

“This committee in 2009 distributed to the various tiers of government a total of N2, 831 billion as statutory revenue allocation, N449.644 billion as revenue from Value Added Tax, N735.017 billion as augmentation for shortfalls in the budgeted revenue, N158.679 billion as exchange gain difference between the prevailing exchange rate and the budgeted exchange rate, while a total sum of $5.5 billion was distributed from the Foreign Excess Crude Account,” he said.

Emphasising the need for all tiers of government to be “cautious though pragmatic” with the current $80 per barrel spot price of Nigeria's reference oil, Babalola pointed out that the high oil price was being driven by the low value of the US dollar and the low interest rates in the US.

We ask again: on what will these three tiers of government spend these current allocations?

Understandably, pessimism seems to have taken over in the country - with the negatives seemingly growing in their grotesqueness – armed robbery, kidnapping, joblessness, corruption, ethnic and religious chauvinism etc. The problems in the country remain as real as they seemed insurmountable.

Daniel Elombah
(A Nigerian Perspective on world affairs)

"Nigeria cannot be a reliable ally if it is consumed by its own corruption and political machinations. Iit is rapidly becoming more like Somalia - a failed state with no real government to cooperate with." - ex-US ambassador to Nigeria, John Campbell