Nigeria Content Online

The
federal government on Friday announced that it has set aside the sum of
$1billion (about N150billion), in preparation for the Sovereign Wealth
Fund (SWF) take off.

The Accountant
General of the Federation, Ibrahim Dankwambo, who disclosed this in
Abuja at the end of the Federation Accounts Allocation Committee (FAAC)
meeting on Friday, said the three tiers of government agreed to share a
total of about N704.3billion for the month of July.

Details of the
allocations include a statutory revenue allocation of N404.3billion,
which includes earnings from value added tax (VAT) of N42.8billion, and
additional $2billion (about N300billion) withdrawn from the Excess
Crude Account (ECA) for undisclosed purposes.

The statutory
revenue allocation, according to Mr Dankwambo, include N361.4billion,
which is higher than the previous month’s figure by N183million, or
0.05 per cent, attributable to higher crude oil prices in the
international oil markets and improved tax drive. Earning from VAT was
lower than previous month’s figure by about N9billion, or 2.3 per cent.

At the end of the
meeting, Mr Dankwambo said the balance in the ECA stands at about
$460million, while that of the new Excess Revenue Account has increased
to over N112billion.

Process already in motion

Mr Dankwambo
explained that though the Nigerian National Petroleum Corporation
(NNPC) paid revenues in excess of N500billion into the Federation
Account, only N365billion was shared, with the balance transferred to
the Excess Revenue Account, in line with the new fiscal rule requiring
that any revenue in excess of that ceiling every month be saved.

Though he said
government is yet to firm up the decision on when the Sovereign Wealth
Fund will take off, Mr Dankwambo indicated that the process has already
been set in motion to lay the structural foundation on how the fund
will be operated whenever it takes off in the near future as soon as
the enabling laws setting it have been passed by the National Assembly.

The wealth fund is
a pool fund being proposed by the federal government for the
accumulation of excess revenue from trade and crude oil exports for
investments and development of critical infrastructure that will
benefit the country’s economy.

Reforms will be initiated

Minister of State
for Finance, Yawaba Lawan-Wabi, who was attending the meeting for the
first time since her appointment early this week, said issues
concerning the controversial N450billion NNPC debt to the Federation
Account is still being processed and would soon be resolved.

She solicited the
cooperation of members and representatives of agencies towards
successful meetings, noting that some reforms will be initiated in the
future to make the work of the committee beneficial to all the three
tiers of government.

Chairman,
Commissioners Forum, Rebo Usman, expressed the hope that the fund will
be better managed than the Excess Crude Account when it finally takes
off, noting that the FAAC will not have anything to do with revenues
saved under the fund whenever work on the operational structures and
legal framework are in place.

“The SWF will be a great cushion for the country’s economy when it finally takes off,” he said.

Mr Usman, who is
also the Taraba State Commissioner for Finance, said it will be
difficult for the impact of the Excess Revenue Account, which was set
up more than two months ago, to become obvious, considering the
prevailing global economic crisis, which Nigeria is not immune.

“If the big economies, like China and Japan, are crying as a result
of the negative impact of the global economic situation, why should it
be different for Nigeria? Whatever the federal government is doing is
to ensure that Nigeria surmounts the impact of this global economic
challenge, which is something one cannot tackle overnight. It is unfair
for Nigerians to think that it is a Nigerian problem alone,” he said.