The Federal Account Allocation Committee (FAAC) has issued recommendations urging the Federal Government to refund approximately N228 billion borrowed from the non-oil excess revenue account to finance the 2023 general elections. This directive is derived from a comprehensive report on the inflow into and payments from the non-oil excess revenue account spanning January 2020 to October 2023. The report, signed by Sub-Committee Chairman Kabir Mashi on December 14, 2023, sheds light on various financial transactions and concerns.
Mr. Mashi, a former Acting Chairman of the Federal Inland Revenue Service (FIRS) and currently a Federal Commissioner of the Revenue Mobilization and Fiscal Allocations Commission (RMAFC), represents Katsina State in his capacity.
The genesis of the report can be traced back to a FAAC Plenary meeting held in September 2023, where concerns were raised about substantial deductions from the Non-Oil Excess Revenue Account, prompting a detailed investigation by the sub-committee.
The loan obtained for the 2023 general elections constitutes approximately 26% of the total deductions made between January 2020 and October 2023, according to the sub-committee’s findings. Additional deductions were made for various purposes, including a refund of gas flared penalty to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Key findings from the sub-committee’s report include:
– Total inflow into the Non-oil Excess Account for the period January 2020 to October 2023 amounted to N2,607,067,427,659.48.
– The total amount distributed to the three tiers of government during the same period was N1,035,298,000,000.00.
– Total deductions from the account for other purposes reached N846,159,187,753.64 during the period under review.
– Specific deductions included a refund of gas flared penalty to NMDPRA (N20,009,001,423.57), transfer to the 20% of the Amount due to States on ECA withdrawals Account (N20 billion), and refund of PAYE to States (N136,571,812,718.58) and FCT (N31,311,515,329.52).
– The Federal Government borrowed sums for various purposes, including the payment of ground rent liabilities, funding the 2023 General Elections, and payment of contingencies to the Office of the National Security Adviser.
In its recommendations, the Sub-Committee advocates for the refund of the total deductions of N864.16 billion for other purposes back to the account. Additionally, it emphasizes that future deductions from the account should align with the vertical revenue allocation formula.
This recommendation to refund the borrowed funds marks a significant stride in promoting transparency and accountability in the management of Nigeria’s financial resources.
Further insights into the non-oil revenue account reveal parallels with the Excess Crude Account (ECA), established in 2004 by then-President Olusegun Obasanjo. While specifics on the non-oil revenue account’s creation remain elusive, its presumed function as a savings mechanism for surplus revenues from non-oil sources aligns with the ECA’s purpose as a fiscal buffer during economic downturns.
However, challenges persist, as the Federal Government’s withdrawals from these accounts occasionally deviate from the standard vertical revenue allocation formula outlined by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC). Efforts to revise the revenue allocation formula have been met with challenges, and the current administration shows no immediate inclination to pursue such revisions, indicating a continuity in the established status quo of revenue allocation in Nigeria.
