The House of Representatives yesterday instituted an investigation into the alleged indiscriminate withdrawal of funds from the stabilisation account by the Federal government.
The Stabilisation Fund Account is meant to save for the future generation, but an exclusive investigative report published in January reported that the account had been depleted by over N114 billion in eight months.
Yesterday, the House unanimously agreed to open a probe of what lawmakers called indiscriminate withdrawals from the account, following a motion moved by Rep. Haruna Musa Fatahi.
In passing the resolution, the House asked its committees on Appropriation and Finance to investigate and find out the actual amount of money so far withdrawn by the Federal Government.
In his motion, Fatahi (ANPP, Kano) said the continued and indiscriminate withdrawal was increasingly converting the account “into a mere slush fund instead of its original mandate.”
Lawmakers said the stabilisation fund was meant to protect annual national budgets by providing a last resort cash source during periods of fiscal deficit resulting from sustained fall in oil prices.
Fatahi said the revenue sharing laws provide for the remittance of 0.5 per cent of funds accruing to the Federation Account to be kept in the Stabilisation Fund Account, but the funds were being spent inappropriately.
“This account being a buffer against oil price shock, spending from it should be guided by caution and great circumstance in order to maintain a sound fiscal policy,” he said.
We reported on January 5 that the Jonathan administration had drawn about N114 billion from the stabilisation fund account for certain expenditures which the fund was not meant to cater for.
The two House committees were yesterday also directed to determine the legality or otherwise of the expenditure made from the fund and submit a report within four weeks.
How FG depleted the fund
Documents available to us showed that the Federal Government made withdrawals from the stabilisation account in different instalments between September 2010 and May 2011 for various expenditures, including loans to the police and funding of committee activities.
The revenue sharing laws provide that 0.5 percent of funds accruing to the Federation Account should be remitted to the stabilisation account. The account had balances of about N120 billion in August 2010 but was depleted to N37 billion by October 14.
Funds were withdrawn for activities of the Federation Account Allocation Committee (FAAC), the National Council on Finance and Economic Development (NACOFED) and the Consolidated Revenue Fund Charges (CFR), consumer car finance scheme, police peace keeping mission in Haiti, INEC, among others.
Documents reveal that the Federal Government withdrew over N75 billion in September 2010 alone. On September 1 and 15, the government withdrew N40.5 billion and N35.5 billion which was purportedly “released to CFR as loan to fund the Independent National Electoral Commission (INEC) for 2010 General Election.”
Another N11.3 billion was withdrawn on October 13 and “released” to INEC as loan for the same election.
The stabilisation account rose to about N36 billion between January to May 2011 only to be depleted again to N11 billion. Also, about N400 million was withdrawn as funding for the activities of FAAC and NACOFED between January and May 2011.
Also, N150 million was withdrawn through five memos on the same day.
Another withdrawal was made on January 26, 2011 of N255 million as “funding for NACOFED & FAAC Activities for 2011.”
A number of other withdrawals for FAAC and NACOFED were backdated as payments for 2004 and 2005 activities. The breakdown shows: N31 million was “released to FAAC Secretariat for year 2004;” N25 million for “NACOFED conference expenses for year 2004;” N27 million was “release to FAAC secretariat for year 2005;” N26 million was NACOFED conference for year 2005” and N35 million was released to FAAC Secretariat for year 2006.”
FAAC comprises largely state commissioners of finance and headed by the minister of state for finance. Officials told us that since these commissioners come to FAAC meetings on official assignment from their states, it was unlikely that the Federal Government would truly spend these millions on “FAAC activities.”
On May 11, 2011, N242 million was withdrawn and “granted as loan to Inspector General of Police (IGP) for purchase of vehicles for UN peace keeping in Haiti- 1st instalment.” Another N33 million and N32 million were released on the same day to the IGP, according to the documents, as second and third instalments for the vehicles purchase.
Similarly, N4.5 million was withdrawn and released “as loan granted to pay the second Tranche of FGN 50 % contribution to the funding of 2006 Tranches of the Pioneer Consumer Car Finance Scheme.” Another N10 billion was withdrawn and released as “loan granted to pay 2nd Tranche of FGN 50% contribution to the Phase II of the Pioneer Car Finance Scheme for public servants and in the paramilitary agencies.”
Other withdrawals were N4.5 billion loan granted to fund 2006 virement; N827 million equivalent of loan granted Sao Tome ($5m); N1.6 billion loan granted to fund 2006 virement; N2.8 billion loan granted to pay 2nd Tranche of FGN 50 percent contribution to the Phase I of the pioneer car finance scheme; distribution of 50 percent of balance in the Excess Crude Proceeds Account in 2004 and another N985 million advance to FGN to meet shortfall in revenue since beginning of year 2011. All these withdrawals were made on May 11, 2011. (Daily Trust)
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