NEWSPOLITICS

To $472,513, the Excess Crude Account decreases by 89%.

To $472,513, the Excess Crude Account decreases by 89%.

In the last eight years, Nigeria’s excess crude account has decreased by 89%, from $4.1 billion in November 2014 to $472,513 in the same time in 2022.

The ECA’s balance as of November 23, 2022, was $472,513.64, according to a statement from the Ministry of Finance, Budget, and National Planning that was seen by The PUNCH on Wednesday.

According to the financial and business dictionary Investopedia, the ECA is the fiscal account of the Federal Government that was established to conserve funds from oil sales that were generated in excess of the budgetary benchmark price.

However, economists say that due to lack of inflows, fluctuations in the oil market, and the country’s revenue shortage, the account has been emptied during the past eight years.
According to Jonathan Aremu, professor of economics at Covenant University in Ogun State, “it is simple reality that when you spend money from an account and you are not adding to it, it will deplete.”
The oil price must grow above the anticipated amount in order for you to boost the ECA. 
If not, nothing is inserted. 
Additionally, if you spend more than you bring in, your resources will be depleted. 
This is the circumstance, he continued.
At p.m. on Wednesday, Brent crude traded for $88.45 per barrel. 
WTI crude, on the other hand, was trading at the same price of $81.13 per barrel.
Although the benchmark price for oil in the 2022 budget was $57, the price of oil today is still around $30 more than the benchmark. 
Nevertheless, since the beginning of 2022, when the Russia-Ukraine war began, the ECA has been declining despite increasing oil prices.
The truth is that the government has had financial difficulties, especially during Buhari’s second term, according to Chapel Hill Denham’s Tajudeen Ibrahim, Director of Research and Strategy.
They consistently use the ECA to benefit the national, state, and municipal governments, he claimed.
He clarified that the distribution of ECA has previously been demanded by governors, which was against the intent behind its establishment in 2011.
Ibrahim continued, “This is pointing to the fact that it is not backed by the law and that the government is broke. The only way out is to pay more attention to non-oil revenues and less attention to oil revenues.
The Federation Account Allocation Committee, or FAAC, distributed N736.782 billion to the three tiers of government as the allocation for the month of October 2022 during its meeting in the meantime.
The Federal Government received N293.955 billion from this stated amount, inclusive of gross statutory revenue, value added tax, exchange gain, and augmentation from non-oil revenue, while the 36 states received N239.512 billion, according to statement from the Ministry of Finance, Budget, and National Planning.
Local government councils received N177.086 billion, while the states that produce oil earned N26.228 billion for 13% derivation.
According to the communiqué the FAAC released following the meeting, the gross VAT revenue available for October 2022 was N213.283 billion, an increase from the amount given the month before.
State governments received N106.642 billion, local government councils received N74.649 billion, while the federal government received N31.992 billion.
However, the gross statutory revenue distributed, N417.724 billion, was less than the amount received the month before, N206.576 billion, from which the federal government received N206.576 billion, states received N104.778 billion, local councils received N80.779 billion, and oil-producing states received N25.591 billion.

N70 billion in additional funding was also divided among the three levels of government. State governments received N18.704 billion, the federal government N36.876 billion, and local government councils N14.420 billion.

See also  CUSTECH RELEASES 2022/2023 FIRST BATCH OF ADMISSIONS LIST OF SUCCESSFUL CANDIDATES

Additionally, N30 billion in non-oil revenue was allocated. Local government councils received N6.180 billion, the Federal Government N15.804 billion, and the States N8.016 billion.

The communiqué also revealed that the three levels of government split N5.775 billion in exchange gains. State governments earned N1.373 billion, states received N2.707 billion, and local government councils received N1.058 billion. States that produce oil, however, received N637 million.

Additionally, while VAT and corporate income tax both saw big increases, taxes on oil and gas royalties, petroleum profits, and import duties all experienced significant cuts. The excise charge did, however, slightly rise.

The communiqué states that the total income distributable for the month of October was made up of N736.782 billion in statutory revenue, N213.283 billion in VAT, N5.775 billion in exchange gain, and N100 billion in augmentation from non-oil revenue.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button