New bill may delay sharing of N327b excess oil fund
From Mathias Okwe (Abuja), Isa Abdulsalami (Jos), Ifedayo Sayo (Ado-Ekiti), Lawrence Njoku (Enugu) and Abiodun Fagbemi (Ilorin)
AN Executive bill that will define the modalities for sharing the excess revenue from crude oil sales is in the offing.
Until the bill is passed, the fund put at N327 billion will not be shared, The Guardian has learnt.
But President Olusegun Obasanjo while fielding questions from journalists during a monthly Media Chat on Sunday hinted that the excess crude revenue would be released monthly next year in order not to distort this year's budget if released immediately and that lump-sum release of the fund could fuel inflation.
Titled: "Fiscal Responsibility Bill", and proposed by the Federal Ministry of Finance, the bill is aimed at ensuring judicious use of the money, especially by state governments.
To enable Nigerians make their input into the instrument, the ministry will next week hold a consultative forum on it in Abuja. Expected at the forum are state governors, members of the National Assembly, the academia among others.
But the state governments, which are clamouring for an immediate sharing of the money, have outlined various projects, which they will execute with their share of the bumper revenue. They also canvassed a different sharing arrangement that favours the states.
Some senior officials of the Finance Ministry told The Guardian that the minister, Dr. Ngozi Okonjo-Iweala, is disturbed by the financial recklessness of some governors, and therefore wants to put real structures in place before the money is shared.
After the stakeholders, the bill will be forwarded to the National Assembly for debate and consideration, The Guardian has learnt.
The Federal Government in the 2004 budget pegged a price of a barrel of crude oil at $25.
The crisis in the Middle East and the entire Gulf region is believed to be responsible for the all-time high of $48 per barrel. The government has, however, refused to yield to the pressures of the states to share the excess revenue.
It wants the fund kept in a separate account to check against oil price volatility in the international market.
Okonjo-Iweala who first dropped the hint of the government's plan, penultimate week at a ministerial press briefing, stated that the measure was being contemplated to improve discipline in the fiscal process.
Some top Finance Ministry officials said the excess crude revenue would not be shared until the proposed bill comes into effect.
The action, an aide of Okonjo-Iweala explained, "is to check against financial recklessness of some governors who are in the habit of frittering away their allocations. The law will instil financial accountability and discipline in the management of public finances."
He said that some governors were in support of the initiative, while others want the money shared immediately. He accused the governors of not accounting for their statutory monthly allocations.
The aide said that Okonjo-Iweala, who is the initiator of the bill had already met with seven governors as part of consultations between the federal and state governments on the best way to manage the funds in a sustainable way that would improve the welfare of Nigerians.
He listed the governors as Dr. Sam Egwu (Ebonyi); Alhaji Ahmed Mohammed Makarfi (Kaduna); Alhaji Mohmmed Aliero (Kebbi) and Dr. Bukola Saraki (Kwara).
Others are Alhaji Abdulkadir Kure (Niger); Alhaji Adamu Abdullahi (Nasarawa) and Obong Victor Attah (Akwa Ibom.)
"Their coming was to consult with the minister over the Fiscal Responsibility Bill. Some of them talked about investments with the funds while others insisted on their constitutional rights to the fund. The minister expressed satisfaction with the quality of contributions but told them about the Fiscal Responsibility Bill, which is meant to streamline the economy and check inflation and debts among other things," the aide said.
He hinted that plans had been concluded for a stakeholders' consultative forum next month with members of the National Assembly and the academia for greater input to the bill.
The states in their quest for the sharing of the monies have called for the adoption of a distribution formula that is just and equitable.
They specifically asked the Federal Government to consider them for higher allocation to enable them execute some people-oriented projects.
The Ekiti State Governor, Mr. Ayo Fayose, said that the states should be given more than what they get from the Federation Account.
He, however, declined to recommend a specific ratio, saying that the exercise should be fair to avoid wrangling among the states.
Plateau State government is also opposed to using the existing revenue sharing formula to distribute the excess revenue.
The Director of Press to the Administrator, Mr. Ezekiel Dalyop, told The Guardian that the current revenue formula puts the state in a disadvantaged position.
"By this existing revenue sharing formula, Plateau State is always at the bottom of the statutory allocations. And if the Federal Government should go by it again in sharing the oil windfall, we should not be surprised if about N1 billion is allotted to the state at the end of the exercise," he said.
Dalyop said that the government would use its proceeds on road construction and over-head costs.
In Enugu State, there were diverse opinions on the modality to be used in sharing the money.
While the state government supported the sharing based on the present revenue formula, the Justice Party of Nigeria (JP) rejected the idea.
The Commissioner for Information, Chief Ayogu Eze, said that though the formula for sharing such money had been contentious, whatever the state government gets would help it to complete various developmental projects.
The JP said that the Nigerians could benefit from the money if a Special Trust Fund (STF) was set up to manage the additional revenue. It wants the money spent on health, education and roads in the six geo-political zones of the country.
The National Chairman of JP, Chief Ralph Obioha, said that the establishment of a Petroleum Windfall Trust (PWT) in the zones would bring development to the grassroots.
The Kwara State's Commissioner for Finance, Mr. Fatai Ahmed, asked the Federal Government to stick to the sharing formula presented by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) in the disbursement of the proceeds.
Ahmed, who decried the nation's over-dependence on oil, said that Kwara's share of the fund would be used to off-set some unpaid emoluments of the workers.
He said: "The Federal Government should follow the concept of revenue sharing formula over this issue. But for how long shall we continue to depend on proceeds from fuel Over 80 per cent of our revenue as a nation is derived from oil proceeds.
"Remember that we don't even have control over the price of oil. There is a problem there. You can't plan over what you don't have control over. We need to be careful over expenditure rule in this regards," he added.
