The persistent fall in the revenue available to all the tiers of government to share on monthly basis is making the concerned parties to consider tinkering with the sharing framework specified in the 2013 budget, IFEANYI ONUBA writes
The Federal Government has disclosed plans to abandon the revenue framework upon which the 2013 budget was prepared.
The move follows persistent decline in the gross federally collected revenue accruing to the Federation Account.
The government had projected a monthly earning of N702.54bn in the 2013 budget, but it only surpassed that target once during the first seven months of the year, earning N651.26bn in January; N571.7bn in February; and N595.71bn in March.
In the months of April, May, June and July, the revenue earned by the country was N621.07bn, N590.77bn, N863.02bn and N497.98bn, respectively.
As a result of the shortfall, revenues may now be shared based on the amount actually earned rather than what is budgeted.
This implies that the previous months’ arrangement when revenue shortfalls were augmented to meet up with the budgeted benchmark will no longer be possible, owing to the new stance of the Federal Government.
Addressing journalists on the development, the Minister of State for Finance, Dr. Yerima Ngama, said the Federal Government was working to clear the arrears of revenue due to the three tiers of government, especially the shortfall of about N140bn recorded in the month of July.
He said, “Last month, we agreed that we had to go and do something to make sure that the shortfall is reduced because last month, the shortfall was N140bn.
“And we, both the Ministry of Finance and the Nigerian National Petroleum Corporation, tried to see if we could do everything to provide whatever comfort we could to reduce the shortfall.”
The minister said the revenue benchmark upon which the 2013 budget was prepared was no longer realisable in view of current realities.
Ngama, who is also the Chairman of Federation Accounts Allocation Committee, revealed that the committee had taken a firm decision that, henceforth, revenue sharing would be based on actual performance and not the budget benchmark.
He said, “Actual revenue collected for August statutory less Value Added Tax is N524.113bn, which is higher than what was available last month. Last month’s statutory allocation was N477.045bn, while the budget is N623.768bn
“From September, it is actual earnings that will be shared. We are working on reducing the gap for last month’s difference but it has not fully materialised. This year’s budget is over bloated. We have agreed that we are not going to draw down savings from the Excess Crude Account.”
He expressed optimism that with the non-oil surplus of N40bn from the ministry and NNPC’s contribution of N75bn, the issue would be resolved amicably.
“The reason we adjourned (the FAAC meeting) is to give us time to reduce the gap for July, the NNPC is supposed to bring N75bn and we are to bring N40bn,” he explained.
Addressing journalists on the development, the Chairman, Finance Commissioners’ Forum, Mr. Timothy Odaah, explained that Friday’s meeting was suspended because of the outstanding revenue that was not remitted to the Federation Account by the revenue generating agencies.
He said the issue in contention was beyond what could be handled by the committee, adding that a meeting between the state governors and President Goodluck Jonathan should be scheduled to resolve the crisis.
Odaah said, “We left the venue just of recent. It was more or less a deadlock. The most important thing is that there is a difference between how we used to do it and how we did it at this period. It was diplomatically and amicably settled on the grounds that we suspend the FAAC meeting session as scheduled today.
“The FAAC did not meet the expectation. It is like there are some returns that still have to be made. We equally made reference to the causes of the stalemate we witnessed by the month of June. This time around, we decided that the matter be looked into deeply because it appeared to be beyond our level of handling.
“So, on a very serious note, it is a matter we feel that our bosses, the state governors, and the President should look into.”
The country had within the last seven months recorded a revenue shortfall of N443.75bn owing to revenue leakages.
The huge revenue decline is affecting the revenue allocation among the three tiers of government as FAAC is finding it difficult to meet up with the budgeted benchmark.
For instance, Friday’s meeting of the committee was postponed owing to a revenue shortfall of N140bn.
The Commissioners for Finance of the 36 states of the federation, who had gathered at the headquarters of the Federal Ministry of Finance in Abuja, where the meeting was to be held, were jolted when they were informed of the revenue shortfall.
This was not the first time the meeting was being postponed in recent times owing to revenue shortfalls
Punch
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