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Govt withdraws N606b from Excess Crude Account

By The Rainbow
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The Federal Government has withdrawn the sum of N606.12bn from the Excess Crude Account within the first three months of this year.

A 33-page  Budget Monitoring and Evaluation report prepared by the Ministry of Finance on the  on the implementation of the 2013 budget in the first quarter, indicates the money was withdrawn to make up for revenue shortfalls.

While inflow into the Excess Crude Account was N400.92bn in the three-month period; the sum of N606.12bn was withdrawn from it to augment revenue shortfall to the Federation Account.

The report, which also highlights government's performance in the management of public resources as against budgetary allocations, also details how the shortfall came about.

The report jointly signed by the Minister of Finance, Dr. Ngozi Okonjo-Iweala, and the Director-General, Budget Office of the Federation, Dr. Bright Okogu  details how crude oil theft, illegal bunkering and pipeline vandalism had affected the country's projected revenue of N11.339tn for the 2013 fiscal period.

The report explains that the projected revenue is made up of N7.734tn oil revenue, representing 68.2 per cent, and non-oil revenue of N3.605tn or 31.8 per cent.

The money withdrawn from ECA, the report said,  was shared by the Federation Accounts Allocation Committee to the three tiers of government to enable them to perform their statutory responsibilities.

According to the report, the Excess Crude Account was set up to serve as a stabilisation and savings account. Inflows into the ECA in the first quarter of 2013 amounted to N400.92bn.

'The inflow in the first quarter was N73.88bn (or 15.56 per cent) and N446.99bn (or 52.72 per cent) lower than the N474.8bn and N847.91bn recorded in the fourth quarter of 2012 and first quarter of 2013, respectively. 'The sum of N606.12bn was withdrawn from the account in the first quarter of 2013,' it stated.

Details of the withdrawals are follows: payment of petroleum product subsidy, N50bn; distribution among three tiers of government (augmentation), N485.02bn; and transfer for the special intervention fund, N71.10bn.'

According to the document, further analysis of the actual performance of the oil and non-oil revenue receipts in the first quarter of 2013 showed a mixed trend in the revenue.

An analysis  of the oil revenue in the first quarter of 2013 showed that the oil and gas royalties of N216.01bn, gas flared penalty of N1.12bn and petroleum profit and gas taxes of N814.22bn exceeded their respective quarterly expected estimates of N190.27bn, N620m and N590.79bn by N25.74bn (or 13.53 per cent), N500m (or 79.84 per cent) and N223.43bn (or 37.82 per cent), respectively.

However,  crude oil sales of N724.84bn, gas sales of N64.0bn, rent of N100m and other oil and gas revenue of N380m were lower than their quarterly projections of N1.060tn, N89.90bn, N220m and N770m by N336.14bn (or 31.68 per cent), N25.90bn (or 28.81 per cent), N130m (or 56.82 per cent) and N390m (or 51.17 per cent), respectively.

The report stated, 'In the first quarter of 2013, the actual net oil revenue that accrued into the Federation Account was N967.84bn, indicating a shortfall of N245.96bn (or 20.26 per cent) below the projected quarterly estimate of N1.213tn.

'On the other hand, the net oil revenue in the first quarter of 2013 was higher than the N905.69bn net oil revenue recorded in the fourth quarter of 2012 by N62.15bn (or 6.86 per cent).

'In spite of the favourable oil prices at the international market, the below-than-projected performance of the net oil revenue in the first quarter of 2013 was due to the fall in oil lifting figure during the period.

'A comparative analysis of the data further indicates that the aggregate gross oil revenue receipts in the first quarter of 2013 were not only lower than their respective projections for the period, but were also short of the corresponding levels in the same period of 2012.

'The low performance can be attributed to the incessant crude oil theft and pipeline vandalism in the Niger Delta region during the period.'

For non-oil revenue receipts, the report stated that N448.68bn was received within the first three months of 2013.

This, it added, signified a shortfall of N264.24bn (or 37.06 per cent) below the quarterly estimate of N712.92bn.

It said, 'In the first quarter of 2013, the actual gross non-oil revenue of N448.68bn was received. This signifies a shortfall of N264.24bn (or 37.06 per cent) below the quarterly estimate of N712.92bn.

'A breakdown of the non-oil revenue items showed that all the items fell below their quarterly projected estimates. Value Added Tax of N180.41bn; Company Income Tax of N158.33bn and Customs and Excise Duties of N109.94bn were below their quarterly estimates of N236.32bn, N248.01bn and N198.24bn by N55.91bn (or 23.66 per cent), N89.68bn (or 36.16 per cent) and N88.3bn (or 44.54 per cent), respectively.'

Compared to their respective fourth quarter of 2012 outcomes, VAT, CIT and Customs and Excise Duties fell by N3.42bn (or 1.86 per cent), N9.76bn (or 5.81 per cent) and N11.07bn (or 9.15 per cent), respectively.