The state lamented that it suffers a monthly reduction of N481 million
The Ekiti State Government has petitioned the State House of Assembly on what it perceived as the manipulation of proceeds of earnings into the Federation Account.
It also called for a forensic audit of the account of the Nigerian National Petroleum Corporation, NNPC.
The state governor, Kayode Fayemi, while addressing the legislature on the financial situation in the country and its implication on the state in Ado Ekiti on Monday, stated that the NNPC had continuously failed to fully account and remit proceeds of all oil exports into the Federation Account.
He said the Federation Account Allocation Committee, FAAC, reported underpayment of N3.03 trillion oil proceeds received by Corporation to the Federation Account. Mr. Fayemi alleged that the use of flat exchange rate of N154.70 to $1 against N160 for computation of income accruing to the federation account was a deliberate step to reduce funds available to states and local governments. He added that interest earned on funds accruing to the federation account was not properly accounted for.
He said a comparison of the Central Bank of Nigeria, CBN, monthly economic report and the monthly report of FAAC indicated that revenue accruing to the Federation Account was not fully reported.
The governor explained that failure to fully account for revenue accruing to the federation had significantly affected distributable revenue to states and local governments. He asserted that the effect of the depletion had created huge financial burden for the state. He disclosed that the state’s monthly allocation suffered a monthly reduction averaging N481 million. He said that this had prevented his government from meeting its commitments as and when due and the situation may increase the vicious circle of poverty in the country.
“Every State Government in Nigeria depends largely on the allocation from the federation account,” he said. “The annual budget of the state is predicated upon earnings from the federation account. Consequently, any major change due to poor handling or depletion of the nation’s resources will usually have ripple effects on the implementation of budget at the state and local government levels.”
Mr. Fayemi, who frowned at the fusion of the office of the Auditor General of the Federation and Auditor-General of the Federal Government as well as the Account General of the Federation and Accountant General of the Federal Government called for a separation of the two offices in the spirit of true federalism.
He canvassed the assessment of the revenue into the Federation Account such that the Excess Crude Account, ECA, which had “allowed the federal government to manipulate the proceeds of the earnings into the federation account,” be abolished.
The governor called for an immediate review of the Revenue Allocation formula just as he urged the Supreme Court to expedite action on pending constitutional cases with regards to Excess Crude Accounts, illegal deductions, and sovereign asset.
He said, “Considering the current high level of depletion of revenue accruing to the federation account which is now a subject of dispute between the FG, CBN and NNPC, it is desirable that this august body is enjoined to critically assess revenue into the federation account and direct that all revenue accruing to the federation account should only be reported in the Consolidated Revenue Fund, and direct an immediate payment of all outstanding revenue due to the federation account by NNPC.”
In his remarks, the Speaker of the State Assembly, Adewale Omirin, commended the state government for not shirking its responsibilities, despite the paucity of fund being experienced in the state as a result of the depletion in the Federation Account.
Mr. Omirin assured that the legislature would look into the situation and take necessary action.