The Federal Government has depleted the Excess Crude Account by N253.1m between January 16 and February 19, analysis of figures from the Federation Account Allocation Committee has revealed.

As at the end of the FAAC meeting on January 16, the amount in the ECA was put at $324.96m.

However, at the end of the FAAC meeting on Wednesday, the balance in the ECA according to a statement from the Office of Accountant-General of the Federation was put at $71.81m.

The ECA, which was created by former President Olusegun Obasanjo in 2004 for the purpose of saving oil revenue in excess of the budgeted benchmark, had a balance of $20bn in January 2009.

But persistent demand by states to fund various programmes and the inability of the Federal Government to generate adequate revenue to fund its operation had put pressure on the federal government to drawdown the account.

Withdrawal from the account was used to augment revenue distribution among the three tiers of government, and fund fuel subsidy payment among others.

The deletion of the ECA negates the warning by the Monetary Policy Committee of the Central Bank of Nigeria that the government builds fiscal buffers to cushion the economy from volatility.

The CBN Governor, Mr Godwin Emefiele had at the last MPC meeting on January 24 warned that the growth on the economy is being threatened by some factors.

Some of them are rising public debt public, lack of fiscal buffers, insecurity, poor infrastructure and weak private sector investment.

The CBN governor said,

“The MPC, however, cautioned that public debt was rising faster than both domestic and external revenue, noting the need to tread cautiously in interpreting the debt to GDP ratio.

“The Committee also noted the rising burden of debt services and urged the Fiscal Authorities to strongly consider building buffers by not sharing all the proceeds from the Federation Account at the monthly Federation Account Allocation Committee meetings to avert a macroeconomic downturn, in the event of an oil price shock.

“It urged government to gradually reduce reliance on oil receipts and focus on revenue diversification through reforms of the tax system.

“The committee also called on government to rationalize fiscal expenditure towards reducing the current excessively high cost of governance.”

Meanwhile, the OAGF statement stated that during the FAAC meeting held in Lagos, the sum of N647.3bn was shared to the three tiers of government.

The meeting, chaired by the Permanent Secretary, Federal Ministry of Finance, Budget and National Planning, Alhaji Mahmoud Isa-Dutse, was part of activities of the 2020 FAAC retreat.

The N647.35bn comprised Statutory Revenue, Value Added Tax, exchange gain, non-oil revenue and excess bank charges recovered.

In terms of gross revenue, it said this was put at N525.25bn for January which is lower than the N600.31bn received in the previous month by N75.06bn

For the month of January, the report put the gross revenue available from the VAT at N104.75bn as against N114.80bn in the previous month, resulting in a decrease of N10.04bn.

Exchange Gain yielded a total revenue of N1.04bn, while the non-oil revenue was N16.29bn.

From the total revenue of N647.35bn, the Federal Government received N267.389bn, State Governments N176.92bn, while the Local Government Councils got N132.94b.

In addition, the oil-producing states received N46.19bn as 13 per cent derivation revenue while the revenue-generating agencies got N23.9bn as cost of revenue collection.

From the Value Added Tax revenue of N104.75bn, the Federal Government received N14.61bn, the State Governments got N48.71bn, the Local Government Councils received N34.09bn and the revenue-generating agencies received N7.33bn as cost of revenue collection.

The communique confirmed that for the month of January, there was a significant increase in Import Duty revenue while Companies Income Tax, VAT, oil and gas royalties and Petroleum Profit Tax recorded decreases.