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Missing $5Bn Crude Money: Amaechi Replies Okonjo-Iweala

Below is the Rivers State Press Statement Replying the Minister of Finance Dr Ngozi Oknjo-Iweala on the controversial missing $5Bn Funds from the Excess Crude Sales:

Governor Chibuike Rotimi Amaechi

Governor Chibuike Rotimi Amaechi

In response to the warning raised by Governor of Rivers State and Chairman of the Nigeria Governors’ Forum, Rt. Hon. Chibuike Rotimi Amaechi, CON, at the 2nd Retreat of the Nigeria Governors’ Forum (NGF) in Sokoto, drawing the attention of Nigerians to the fact that $5billion is missing from the Excess Crude Account (ECA), the Coordinating Minister of the Economy and Honourable Minister of Finance Dr. Ngozi Okonjo-Iweala, put out a rebuttal stating that the claim is “shocking and false”. The Minister went on to say “the $5billion which Governor Amaechi referred to in his statement has been shared to the three tiers of government to make up for the revenue shortfalls during the Federation Accounts Allocation Committee process”. Dr. Okonjo-Iweala also said that “part of this fund also went for SURE-P payments and the balance for subsidy payments to oil marketers”.

The Rivers Sate Government would like to address the issues as raised by the Honourable Minister:

First, the Rivers State Government wishes to acknowledge as highlighted by Dr. Okonjo-Iweala, that it received the sum of N56.2billion, for January to September 2013 as statutory allocation from the federation account.

The federation account is funded from receipts from oil and other sales (with oil accounting for over 90 percent and taxes – VAT- custom duties etc.). When more crude is produced and sold above the quantity anticipated by the budget for any given year, the funds are by law meant to be kept as future savings in a stabilization account, also known as the excess crude account.

Contrary to the coordinating minister’s claim, that “Mr. Amaechi was closely involved and actively participated in making requests to the presidency for the account to be shared for the purpose of augmenting the regular allocations from the Federation Account whenever there was a shortfall,” Governor Chibuike Amaechi and his colleague governors have only attended only one meeting where ONE REQUEST was made for the sharing of $1billion from the Excess Crude Account. Beyond that one meeting, there has been no other meeting where it was decided that money from the ECA be shared among the three tiers of government

There is a position of the National Executive Council’s (NEC) on the matter of the Excess Crude Account. This position is that the savings in the ECA belonging to all the states is not to be touched. Indeed this is in tandem with the position of the Honourable minister that the ECA is savings for all to be set-aside for the rainy day and not to be “shared” in the manner she now seems to suggest. The Rivers State Government finds it curious and very disturbing that our rainy day savings has been “shared” in complete breach of the known procedure for doing such and in what might be considered an under the table and clandestine manner.

The appropriate procedure as the Honourable Minster knows is that usually members of the NEC have to make recommendations to Mr. President should there be need recourse to the Excess Crude account. The Rivers State Government is certain that its Chief Executive and Governor did not participate in any such meeting where any such approval was requested or even discussed and given

The second issue is the pertinent matter of the receipts accruing to the Rivers State Government. Since it is not procedural for states to receive allocation from the Excess Crude Account, it may smirk of mischief to suggest as the Honourable Minister did that Governor Amaechi refused to acknowledge, “Rivers State has received N56.2 billion from the Excess Crude Account between January and September 2013.” Neither Rivers nor any other state would have any inkling that the money received by Rivers State government and other state governments for that matter were funded from the ECA. According to a communiqué issued by the office of the Accountant General of the Federation after the June allocation meeting, “ the sum of N7.617 billion refunded by NNPC and the N35.547 billion from the Subsidy Re-investment Programme (SURE-P); formed part of the total distributable revenue for the month.” The communiqué confirmed that the gross revenue for the month was N863.026 billion. This was higher than the N590.777 billion received in May by N272.249 billion. It said very unambiguously, “the higher revenue was a result of increased crude oil production due to the completion of pipeline repairs in some terminals. There was also a significant increase in non-oil revenue during the period due to the receipt of accumulated arrears on companies.”

The Rivers state government therefore finds puzzling the suggestion by the Honourable Minister that the savings for 2012 has been used to fund the budget for 2013.

For the purposes of clarity and for avoidance of doubt, the Rivers State Government may respectfully request the Honourable Minister to shed more light on the following,

•             How much oil does the country produce per day?

•             Clarification that the benchmark price for oil in the 2013 budget is $79?

•             Is it a fact that crude oil was sold at prices that hovered around $110 per day throughout the year?

•             How much exactly has Nigeria earned from its oil sales in 2013 and what percentage of the budget is funded by these receipts?

The position of the federal government has been that there are shortfalls in production but does this position also take into cognisance the over $30 differential between the benchmark price of $79 and the actual sale price which averaged $110 per barrel during the period. The position of the Rivers State Government is that the differential of over $30 should have been enough to fund the shortfall in production? Unfortunately there has been no accounting for this huge differential. Perhaps the Honourable minister may assist us in putting this in better perspective.

Governor Amaechi’s position in Sokoto was that the ECA is being managed like a piggy-bank contrary to provisions of the law and in a manner that does not allow for transparency and accountability. A position which the Honourable Minister’s rebuttal now seems to confirm, as can be noted in the third issue she raised in her response.

According to her, the SURE-P is being funded from the ECA. But the President in his broadcast had stated that SURE-P, “is designed to manage and reinvest the Federal Governments share of the savings from the partial reduction of subsidies on petroleum products.” It was not and is not meant to be that SURE-P is to be funded from ECA nor can the Federal Government unilaterally withdraw money from the ECA to balance payments to oil marketers. Indeed the statement of the accountant general of the federation previously quoted lays credence to this position – “ N35.547 billion from the Subsidy Re-investment Programme (SURE-P); formed part of the total distributable revenue for the month.”  It has been the understanding of the Rivers State Government that SURE-P is funded from the extra money realised from the pump price of petroleum, which Nigerians protested against when the pump price of fuel was raised. Is the Honorable Minister telling Nigerians that the SURE-P is now being funded from the ECA! Might it then be true as was recently suggested in the National Assembly that over N500billion of SURE-P money may be missing?

The Government of Rivers State holds the office and person of the Honourable Minister in high esteem, but as a government we owe the 5.6 million Rivers people whose mandate we hold a responsibility of accountability. The issues raised by Governor Amaech were raised purely out of concern for the need for accountability and safeguarding the wealth of “future generations of Rivers people.” It is for this purpose and to this end that we most respectfully seek clarification of the following.

•             How much oil does Nigeria produce?

•             Where is the differential between the oil pump prices?

•             What price is our oil being sold for?

•             How much have we earned from our crude oil sales in the last year?

•             What percentage of budget 2013 does our crude oil sales revenue fund?

•             Can the Honourable Minister assist in shedding more light on the subsidy savings since the reduction in petroleum subsidy?

As a government that is also a major stakeholder in the administration, we believe that answers to these very pertinent questions would put paid to whatever false or misleading information may have been put out or peddled in the public domain.



Ibim Semenitari

Commissioner of Information and Communications,

Rivers State



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