The Nigerian House of Representative in SessionIt was gathered that the House may be considering a collapse of the N6.3 billion capital vote allotted it in the 2010 Appropriation Act to augment the entitlement of its members.
A text message being sent around read as follows: "My Distinguished, each member in the House of Representatives has improved earnings from N25m to N43m. This is an improvement of 40 per cent. Reps members are also getting one Prado 4by4. This is election year; we should rise up and demand from leadership what is due us. Our entitlement in the budget is nothing less than N100m per Senator. David Mark's leadership will open up if we request for it. N100m or nothing."
Meanwhile reports from Revenue Mobilization, Allocation and Fiscal Commission (RMAFC), reveal that State governments in this country may not be able to pay workers' salaries in the next two months when the $3.2 billion currently left in the Excess Crude Account is shared out, as pointed out by a top official of the Revenue Mobilisation, Allocation and Fiscal Commission [RMAFC].
Sources said only Lagos State will be able to pay salaries if the funds from the Federation Account and Excess Crude Account further nosedive in June.
The Chairman of the Revenue Mobilization, Allocation and Fiscal Commission Engr Mahmud Tukur, has raised the alarm that the nation’s reserve has gone dangerously low to the point that if drastic measures were not taken immediately to stem the tide, the 2010 budget would be a stillbirth, dead on arrival.
He blamed the situation on the government’s decision to place its commitment to Joint Venture Partners through its Joint Venture Cashcalls (JVC) over the interest of the nation. According to him, payment for JVC has wiped out the entire $20.1billion in the excess crude (oil revenue) and slashed the excess domestic (non-oil revenue) from N322billion to N1.47billion all within one year, January to December 2009.
There is no doubt that State governments may face serious financial difficulties.
Moreover, major economic projects lined up by President Goodluck Jonathan may hit the rocks as the 2010 budget run into a hitch, less than two months into its implementation because the revenue profile upon which the budget was predicted had shrunk, leaving no choice to government than to cut the budget by as much as 40 per cent.
Already, both the Presidency and the National Assembly had agreed that the N4.9trillion 2010 budget was no more realistic in view of recent developments in the world market for crude oil.
The dwindling revenue profile of the government will also affect civil servants at the federal level, a top federal civil servant also said.
Monthly revenue accruing to the federal, state and local governments has been on the decline since January this year. The three tiers of government shared N333 billion in January and N273 billion in February.
The allocation for the month of March is not yet out but a source at the Federation Account Committee said Nigerians should expect lower postings to states for the month. The depletion of the Excess Crude Account came on top of continuous downward trends in funds accruable to the Federation Account. The excess crude account was created by the Olusegun Obasanjo government when the prices of crude oil in the international market were far above Nigeria's budget benchmark. The Excess Crude Account is divided into two parts. There is the dollar part which comes from the sales of crude oil outside the shores of Nigeria by the NNPC. The other part comes from Domestic Excess Crude Sales.
Nigeria's deepening financial crisis is further captured in the envisaged 35 per cent or N1.5 trillion budget deficits for 2010.
The 2010 budget is predicated on oil production of 2.88 million barrel per day at $67 per barrel. This is against last year's $57 a drum. The price of sweet crude at the international market yesterday stood at $87 a barrel.
Most states depend on the funds from the federal government to pay their workers and to carry out major projects.
Government has been augmenting revenue shortfalls by withdrawing from the Excess Crude Account. The account is now down to about $3 billion from a balance of $20 billion in January 2009.
In February 2009, the Federation Account Allocation Committee recommended the sharing of $2 billion after the state governors pressurized the federal government to share $4 billion from the account. In April 2009, $5.3 billion was withdrawn from the Excess Crude Account to fund the federal government's power project. Between June and August 2009, $4 billion was shared by the governments, after the state governors went to court praying that the whole Excess Crude fund be shared.
Another $2 billion was shared by the government in the heat of global economic crisis that drastically reduced international oil prices last year. Towards the end of 2009, federal government withdrew $2 billion from the account and injected it into the economy as economic stimulus.
For instance since early January, in an unprecedented manner, the Federal Government has been dipping its hands into oil proceeds to offset Joint Venture Cash Calls. Nigeria has 60 percent joint holding and 40 percent to the multinationals in the JVCs.
Corroborating this fact, Central Bank of Nigeria [CBN] Governor Sanusi Lamido Sanusi and former minister of finance Ngozi Okonjo Iweala recently said budget 2010 is not realistic.
Meanwhile, a top government official said unless the states aggressively embark on harnessing their internally generated revenue and relying less on revenue from the federation account, they may also not be able to execute any capital project for the rest of the year.
How revenue from the Federation Account and the Excess Crude Account were shared by the Federal Government, 36 States and the 774 Local Government Councils.
Federation Account (N) Excess Crude Account ($)
September '09: N351 billion The account had a balance of $20 billion as at January 2009.
October'09 : N354 billion $2 billion was shared in February 2009
November'09 : N374 billion $5.3 billion was withdrawn for power emergency fund in April 2009
December '09: N370 billion $4 billion was shared between June and August 2009. Another $2 billion was shared in the heat of global economic meltdown in 2009
January 2010: N330 billion In October 2009, another $2 billion was withdrew as economic stimulus package approved by NEC
February 2010: N273 billion In March alone this year, $3 billion was shared by the federal states and local governments.
Some believed that, in spite of the dwindling economic fortune of the nation, and the slow financial recovery of major economies of the world, what we are witnessing is an outcome of unguided and unbridled appetites of some selected few legislators in our legislative chamber.
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