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Revenue shortfall: FG withdraws N1.9tn from ECA

By BusinessNews Staff on July 4, 2014

The Federal Government withdrew N1.99tn from the Excess Crude Account in the 2013 fiscal year, documents obtained from the Budget Office of the Federation have revealed.

The office, in its 2013 consolidated budget implementation report jointly signed by the Minister of Finance, Dr. Ngozi Okonjo-Iweala, and the Director-General, BoF, Dr. Bright Okogu, said the amount was used to settle various obligations of the Federal Government owing to its inability to meet its revenue targets.

The withdrawals for 2013 were marginally lower than the N2.07tn taken in the 2012 period by N800m or 3.86 per cent.

The BoF said while N1.99tn was the total outflows from the ECA, the government was able to ensure that within the 2013 period, the sum of N855.41 was transferred into the account.

However, the total inflow for the period under consideration was lower than the N2.30tn received in 2012 by N1.29tn or 56.19 per cent.

The report, a copy of which was obtained exclusively by our correspondent stated, “The ECA was set up to serve as a stabilisation and savings account. Inflows into the ECA in the fourth quarter of 2013 amounted to N156.03bn.

“The inflow into this account in the fourth quarter was lower than the N181.34bn and N474.8bn recorded in the third quarter of 2013 and fourth quarter of 2012 by N25.31bn and N318.77bn, respectively.

“Similarly, the total inflow for 2013 was lower than the N2.30tn received in 2012 by N1.297tn (or 56.19 per cent).

“A total of N510.98bn was withdrawn from the account in the fourth quarter of 2013 to bring the cumulative drawdown from the account as of December 31, 2013 to N1.99tn.”

The report stated that of the N1.99tn withdrawn in 2013, N1.08tn was used to augment statutory revenue to the three tiers of government, while N505bn was used for the payment of subsidies on petroleum products.

It added that the balance of N405.6bn was transferred into the Special Intervention Fund.

Giving a breakdown of how the N1.08tn revenue was shared among the three tiers of government, the report stated that N485.02bn was withdrawn in the first quarter of 2013.

For the second, third and fourth quarters, the report put the augmentation made to the three tiers of government at N434.82bn, N12.02bn and N154.75bn, respectively.

On how the payment for petroleum subsidy was made, it stated that N50bn was paid to oil marketers in the first quarter, while the second, third and fourth quarters had N110bn, N110bn and N235bn paid, respectively.

For transfers into the SIF, the report stated that N71.1bn was moved into the account in the first quarter, while N106.65bn, N106.65bn and N121.23bn were paid into the account in the second, third and fourth quarters in that order.

The nation experienced huge revenue shortfall in the 2013 fiscal year, which saw the ECA experiencing massive withdrawals by the government in order to augment the depletion in revenue.

For instance, crude oil sale, which accounts for about 90 per cent of the government’s revenue, recorded a decline of N1.43tn or 33.69 per cent from N4.24tn in 2012, to N2.81tn in 2013

Similarly, findings revealed that gas sales of N255.12bn and rent of N180m fell below their corresponding annual projections of N359.58bn and N880m by N104.46bn (29.05 per cent) and N0.70bn (or 79.67 per cent), respectively.

The drop in crude oil revenue, according to the BoF, was due to massive theft, illegal bunkering and pipeline vandalism, which persisted during the period under review.

Similarly, the non-oil revenue receipts recorded huge decline of N637.93bn (or 22.37 per cent) to N2.21tn as of December 31, 2013, below the annual projected estimate of N2.85tn.

For instance, Value Added Tax of N795.60bn; Company Income Tax of N985.52bn and Customs and Excise Duties of N432.64bn fell short by N149.68bn (or 15.83 per cent), N6.52bn (or 0.66 per cent) and N360.31bn (or 45.44 per cent) when compared with their annual projections of N945.28bn, N992.04bn and N792.95bn, respectively.

[Punch]

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