THE CRUDE OIL FUND

EXCESS CRUDE OIL ACCOUNT

 

          In Nigeria, the money in the crude oil account is meant to be shared.  This is always the case every month when the Federation Account Allocation Committee (FAAC) meets to use the formula that has been worked out mutually. But at the beginning of 2007, when the States were expecting to share about five hundred billion naira of the money at the monthly FAAC, Obasanjo had stopped the exercise insisting that details of projects for which the money would be use for be presented as a proof for the sharing and money collection as well as prevent the governors from using the money for electioneering.

 

          These fears were corroborated earlier in the life of the administration by the then minister of state for Finance Mrs. Nenadi Usman who later became Minister of Finance. When she raised alarm concerning capital flight which was promoted by some governors who she said literally moved their state allocations to the informal foreign exchange (Forex) market immediately after each meeting to purchase forex that they took abroad for purposes other than state matters, nobody took her seriously.

 

          Mrs. Usman alleged that the movement of the huge amount of money into the informal forex market always had the effect of  a fall in the value of the naira.  Not long after her allegation the celebrated cases of alleged money laundering and sundry matters against now ex-governors Joshua Dariye of Plateau State and Diepreye Alamieyeseigh of Bayelsa State broke.  Other stories of choice properties, exotic cars and palatial homes bought by some of the then governors abroad also began to make the rounds.  The question mark being that some of those people did not own some of those property before they became governors.

 

Now a new government has formed at the local, state and federal levels.  Stories of widespread looting of state’s treasuries, of empty treasures and huge debts have inundated the media since the new governors took over on May 29th this year.  The tragedy of most of the states with empty treasuries and those with huge debts is that there are little or no projects to show for these funds that have disappeared into thin air.

 

             But there is need to take off on a smooth footing and plain.As it stands now all can not take off because their money is held up in trust by the Federal Government. This is reasoned along the part of the financial recklessness earlier mentioned earlier which made ex-president Obasanjo, while in office,to adopt a piece-meal  release of the money to the chargrin of the governors.  According to the voice out cry of some, this has been described as an anomaly in a federal set up.

 

              After the maiden meeting of the serving governors’ forum, the Chairman of the forum and Kwara State governor, Bukola Saraki said they were demanding the release of the excess crude proceeds to enable the states deal with current issues like poverty in the states.  This demand should be heeded because the 1999 constitution urges the federal government to distribute the fund in line with the prevailing revenue allocation formula between the federal states and local government.

 

             While it will be unwise to continue to withhold the money on the premise that the money could be diverted, there is need to give them a good start.  President Yar Adua has shown that he is willing to subject himself and his office to the constitution and the rule of law.  He must therefore use this opportunity to prove it.  It is also believed that the new and returnee governors have learned lessons in prudence and accountability and willing to  rewrite the  bad  image of governors.

 

              Governor Saraki has also urged his colleagues to work on this collective image.  So that at the end of their tenure many of them would not need to be quest at the Economic and Financial Crime Commission (EFCC) as some of the immediate past governors did.

 

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