Nigeria: Excess Crude Account Intact – Presidency

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Excess Crude Account Intact

The Accountant General of the Federation had on Monday July 6 2015 after a meeting with President Buhari told the media that the President had approved the release and sharing of funds in the Excess Crude Account to the different tiers of government – Federal, State and Local governments – to assist in the payment of outstanding salaries and debts.

The funds which amounts to about $1.7 billion will be shared shared according to the existing sharing formula. This was the news everyone heard on Monday night and believed especially since it was coming from the Accountant General of the Federation. However, some hours later, the Special Adviser to the President on Media and Publicity Mr Femi Adesina came up to say that this news was false and that the President did not give any such approval.

In his statement, he said:

“Reports in sections of the media today that funds will be drawn from the Excess Crude Account for the relief package approved by President Muhammadu Buhari for states and local governments, are incorrect.

For the purpose of greater clarity on the matter, the measures approved by President Buhari to deal with the problem of unpaid public sector salaries in many states are as follows:

  • The sharing of the $2.1billion dividend paid to the Federation Account by the Nigeria Liquefied Natural Gas Company (NLNG);
  •  A Central Bank-packaged special intervention fund that will offer financing to the states, ranging from N250 billion to N300 billion. This will be a soft loan available to states for the purposes of paying backlog of salaries; and
  • A debt relief program designed by the Debt Management Office which will help states restructure their commercial loans currently put at over N660 billion and extend the life span of such loans while reducing their debt-servicing expenditures.

The measures approved by President Buhari definitely do not include drawing down the remaining balance in the Excess Crude Account or the “liquidation” of the account as some media outlets have wrongly reported.”

From this statement, some questions and conclusions can arise. First, was the Accountant General of the Federation sleeping at the meeting for him not to have known the facts of the meeting? Were the funds being drawn from now there when Mr President said he met a virtually empty treasury?

If the Accountant General of the Federal could so grossly misinform Nigerians, he is either highly incompetent or someone is not telling Nigerians the whole truth. The state governors have have always been clamouring for the funds from the Excess Crude Account to be shared. Many of these states have a virtually non-existent Internally Generated Revenue, but totally depend on funds shared from the center, funds which were actually generated in a few states.

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