TOO BAD: How FG Wasted N143 Billion Natural Resources Fund In 8 Months?

But government records show that since its establishment, funds in the account have hardly been used to achieve this purpose.

Instead, the Federal Government has been drawing the monies to pay for items that should have been budgetted for—like monetisation arrears for PHCN staff and fertiliser procurement contracts.

Since 2004, government withdrew a total of N701 billion for purposes other than development of natural resources.

President Goodluck Jonathan’s administration alone made withdrawals of N142.63 billion in eight months, beginning weeks after when he assumed office as acting President in February 2010, documents from the Office of the Accountant General of the Federation show.

From March to October 2010, the Jonathan administration drew sums from the account for payment of monetisation arrears for staff of the Power Holding Company of Nigeria (N57.59 billion), loan to Consolidated Revenue Fund to accelerate capital budgets releases (N70 billion), funding of fertilizer revolving account (N10.7 billion) and withdrawals to fund reversal of excess crude distribution (N4.3 billion).

Although the withdrawals are called loans, there is no evidence to show that any of these loans have been defrayed.

The revenue sharing laws provide that 3 percent of funds accruing to the Federation Account should be remitted to the natural resources account.

The account was set up after then-President Obasanjo issued an executive order to make the revenue sharing formula conform with the Supreme Court ruling of 2002.

“This fund is supposed to be accessed by all tiers of government and it is to be channelled towards the development of natural resources aimed at diversifying our revenue base outside the oil and gas,” chairman of the Revenue Mobilisation, Allocation and Fiscal Commission Elias Mbam told Daily Trust.

But President Obasanjo himself approved periodic withdrawals from the account to the tune of N270 billion between October 2004 and May 2007 for sundry expenditure that had nothing to do with natural resources development.

In two days alone, just two weeks before Obasanjo left office, his government withdrew N179 billion on May 7 and May 15, 2007 for national identity card project, purchase of chancery in Tokyo, budget financing and NHIS payments among others.

Early this month, at a Senate committee hearing, Permanent Secretary of the Ministry of Finance Mr. Danladi Kifasi said a total of N873.4 billion had accrued into the natural resources account over the years but it was depleted by N701.48 billion.

“The cumulative balance in the account as at June 30, 2012 is N171.9 billion,” he said, adding all “releases from the fund are based on approvals from Mr. President. In some instances, the Federal Government do borrow from the fund and which is promptly paid back.”

A slush fund for the President

Speaking with Daily Trust in Abuja, RMAFC chairman Mbam said one of the problems about the account is that there is no specific government office managing it.

“Somebody who doesn’t know the details would assume it is a Federal Government fund, it is not. It is a federation fund which is held in trust by the Federal Government,” he said.

“Unfortunately, there is no administrative structure that I know for the management of the fund like we have for the Ecological Fund, and so the President, being the head of the federation can use his discretionary approval on allocating this fund on demand after all the necessary verification and confirmation have been done and it is supposed to be utilized in that direction— that is the development of natural resources,” Mbam added.

Apparently because of lack of administrative structure to manage the funds, drawing from the natural resources account appears to be a past time for successive Presidents.

President Umaru Yar’adua also made withdrawals from the account, making four approvals even at a time when illness was taking its toll on him.

Yar’adua approved four payments between June and October 2009 totaling N173 billion for the funding of 2009 supplementary budget (N50 billion), loan to settle liabilities of 2009 season fertilizer supplies (N27.8 billion), and N95 billion and N1 billion for the 2009 agric and food security programmes.

His administration earlier withdrew N10 billion for payment of arrears of monetisation of parastatals (October-December 2005) in August 2007, and then N1.9 billion for “release to IDP & ACGSF” in October 2007.

Also, N21.8 billion was drawn on December 24, 2008 as “loan approved by Mr. President to offset outstanding liabilities of ’08 season fertilizer supplies and to repaid back all affected states in four installments starting Jan ’09.”

How the monies are drawn

Mbam explained how the fund is accessed thus: “Sometimes what happens is that the states passed their request to the commission here, the commission inspects and then analyse the project they want to do so that it is conforms with what the fund is meant to do and then recommend to the president. So the greatest handicap is that there is no administrative structure to manage that fund.”

But he couldn’t say if any state has ever accessed the fund. “Since I came in here, we have received some applications but I can’t remember any state that has accessed it since I came in. We have processed like about five, six states. We have processed Zamfara, FCT, Plateau, Taraba and Adamawa. We are also processing now Imo, Kogi and Abia states. Those are the ones we have already processed,” Mbam said.

The probe instituted by the Senate public accounts committee is on going, and Accountant General of the Federation Jonah Otunla has been asked to appear before the panel to explain the withdrawals from the natural resources funds.

Source: Daily Trust