Federal Government Urged to Refund N228 Billion Borrowed for 2023 Elections from Non-Oil Excess Revenue Account

The Postmortem Sub-Committee of the Federal Account Allocation Committee (FAAC) has recommended that the Federal Government refund approximately N228 billion borrowed from the non-oil excess revenue account to fund the 2023 general elections. This revelation came to light in a report covering the period from January 2020 to October 2023, signed by the sub-committee’s chairman, Kabir Mashi, on December 14, 2023.

The genesis of this report can be traced back to a FAAC Plenary meeting held in September 2023, during which concerns were raised about significant deductions from the Non-Oil Excess Revenue Account. These concerns prompted a deeper investigation into the matter.

According to the findings of the sub-committee, the total inflow into the Non-oil Excess Account during the specified period was N2,607,067,427,659.48. Of this amount, N846,159,187,753.64 was deducted for various purposes, including the refund of gas flared penalty, transfer to the 20% of the Amount due to States on ECA withdrawals Account, refund of PAYE to States and the FCT, and funding of the 2023 General Elections, among others.

The loan taken for the 2023 general elections accounted for about 26% of the total deductions during this period. The sub-committee recommended that the Federal Government refund the total deductions of N864.16 billion for other purposes back to the account and emphasized that any further deductions should adhere to the vertical revenue allocation formula.

This recommendation is significant as it underscores the importance of transparency and accountability in the management of Nigeria’s financial resources. It also highlights the need for adherence to established fiscal management protocols, particularly regarding the utilization of funds from accounts such as the non-oil excess revenue account.

The creation of a non-oil revenue account in Nigeria appears to be a parallel to the Excess Crude Account (ECA), which was established in 2004 by then-President Olusegun Obasanjo. The ECA serves as a fiscal buffer during economic downturns by accumulating revenues exceeding the benchmark crude oil price set in the national budget.

However, the Federal Government’s withdrawals from these accounts have sometimes deviated from the standard vertical revenue allocation formula outlined by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC). This has raised concerns about the adherence to established fiscal management protocols.

Efforts to revise the revenue allocation formula, including a proposal by the RMAFC to reduce the Federal Government’s share and increase that of states and local governments, have not been approved, indicating a continuity in the status quo of revenue allocation in Nigeria.

Nairametrics