FAAC insists on clearing available reserves

With the second tranche of the N522.7 billion Paris Club refund yet to be released despite pressure on President Muhammadu Buhari, states have insisted on sharing a $53.596 million kept in reserve for many years.

Tribune Online learnt that the Federation Account Allocation Committee (FAAC) is presently considering a proposal to share the money being the balance in the Reserves Development Project (RDP) Proceed account.

The Economic and Financial Crimes Commission (EFCC) is presently investigating the disbursement of the previous release of over N300 billion of Paris Club debt refund by some state governors and the Nigerian Governors’ Forum.

Although there have been improvements in FAAC disbursements in the past several months as a result of increment in the price of crude oil, heavy deductions for debt servicing continues to impact negatively on their allocations.

At the last FAAC meeting, a proposal was submitted to be considered by a sub-committee for the sharing of the balance in the RDP Proceeds Account, which has remained since around 2012.

According to the proposal, “The sum of $53.596 million, being the balance in the RDP proceeds account appeared to be idle funds. Members are of the view that a significant part of the amount should be paid into the federation account and shared to beneficiaries considering the current paucity of funds being experienced.”

The sub-committee members also expressed concern regarding no crude oil lifting in Satellite Field Development Project (SFDP) by the Nigerian National Petroleum Corporation (NNPC) since 2014.

Official document revealed that while $1.074 billion had been transferred from SFDP account to NNPC self-funding account, the states’ oil firm was tasked to explain why there was no crude oil lifting from the project for such a long time and how it had been utilizing funds in the self-funding account.

However, disputations over handling of the oil industry by Nigerian National Petroleum Corporation (NNPC) has continued unabated at the Federation Accounts Allocation Committee with the querying of the status of crude oil lifting in the NNPC/Chevron (CNL) Project Cheetah.

At the April meeting of FAAC, members observed that although close to two million barrels of crude oil, valued at $96.852 million, were lifted from the project between September 2016 and February 2017, they lamented that NNPC acted unilaterally by embarking on the project and failed to forward a report on the lifting.

“All proceeds realised from the project be remitted into federation account without further delay,” members demanded.

FAAC also expressed satisfaction with the relative peace that has returned to the Niger Delta region resulting in cessation of hostilities and pipelines vandalisation.

This the committee observed, led to increase in crude oil production and increase in funds available for sharing from the Federation Account since the beginning of this year.