Home » Headlines » Excess Crude Account Shrinks to $3m

Excess Crude Account Shrinks to $3m

After an emergency meeting of the Federation Account Allocation Committee yesterday, the sum of $1billion was deducted from the Excess Crude Account and approved for distribution to the three tiers of government.

Yesterday’s deduction has reduced the balance in the Excess Crude Account, created to provide succour in rainy days to only about $3 million.

A rundown of the distribution of the $1 billion released after the meeting showed that the federal government received $458.31 million while the states shared $232 million.  The local governments shared $179 million.
The remaining $130 million will be shared among the oil producing states based on the existing controversial derivative principle.

FAAC said latest disbursements are expected to be channelled to infrastructural development in different states.
Minister of State for Finance, Hajiya Yabawa Wabi said shortly after the meeting in Abuja that it made sense to disburse the votes to the states to enable them fund more developmental projects.

The minister said: “We are here because we got an approval to share $1bn from the ECA to the three tiers of government and this, we are doing because the ECA is a financing item in the 2010 budget of both the federal and state governments.

“As you are aware, the budget year has been extended to March 2011 by the National Assembly and that is why we need to share this amount to form part of the 2010 budget. Since only the capital budget was extended to March, the money will only be meant for capital projects. The money was approved by Mr. President. No other money was shared apart from this and the money has already been cash-backed.”

President Jonathan was said to have given in to pressure from state governors to share the $1 billion because the governors worry that most infrastructural projects in their respective areas have been stalled by lack of funds, a situation they argued could make their second term bids difficult.

It was learnt that the governors feared that their electorates might criticise them for under-performing and reneging on previous campaign promises.

Chairman, Commission-ers Forum, Alhaji Rebo Usman dismissed speculations that the amount shared may have been an end-of-the year bonuses to governors and other government officials.Said Usman: “We have to meet because there is no way we could share money without a meeting of FAAC members. That was why we had to hold this emergency meeting to take care of that decision that was taken by the National Economic Council.

“This money is not an end of year bonus. It is fund that belongs to the three tiers of government and the ECA is like savings. The governors believe that there is need to fund some on-going projects that are taken place both at the federal and state levels.
“So, it is normal that the money was taken at this time of the year to fund some of our operations. The ECA is an account that belongs to the three tiers of government and anytime we are in need, we have a right to use.”

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