FAAC Transfers N119bn Into Excess Revenue Account
The Federation Account Allocation Committee has transferred the sum of N119.55bn into the Excess Revenue Account.
The amount, according to a statement on Thursday from the Office of the Accountant-General of the Federation, was from the N780.9bn that was approved for distribution to the three tiers of government.
The statement, which was signed by the Director, Information, Press and Public Relations, Mr Henshaw Ogubike, said the transfer was necessitated by the current challenges facing the federation and the highly uncertain revenue profile in the immediate future.
The statement said with the latest transfer of N119.55bn, the three tiers of government would share the sum of N661.42bn for the month of March.
The excess revenue account is distinct from the Excess Crude Account.
The ECA is an account created to save revenues in excess of the budgetary benchmark price that were generated from the sale of oil.
Established in 2004, the ECA’s primary objective was to protect Nigeria’s planned budgets against shortfalls caused by the volatility of crude oil prices.
By detaching government expenditures from oil revenues, the ECA aimed to insulate the Nigerian economy from external economic shocks.
Under the guidelines recommended by an ad-hoc committee constituted in July 2018, the minimum monthly statutory revenue to be shared from the Federation Account by the three tiers of government should not be below N680bn.
In the report, the committee had recommended that any month where the net distributable revenue available for sharing by the federal, states and local governments from the federation account was below N680bn, funds should be withdrawn from the ECA to augment it to at least N680bn.
The committee recommended that if, on the other hand, the net distributable revenue was between N680bn and N730bn, about N50bn should be transferred as saving.
Also, it said if the net distributable revenue for the month is between N730bn and N830bn, then N100bn should be transferred for savings.