Worried by the mind-boggling report that the Central Bank of Nigeria (CBN), has under –remitted over 5 Billion Dollars revenue into the Federation Accounts, the House of Representatives at its plenary on Wednesday, January 31, 2018, set up an Adhoc Committee headed by James Abiodun Faleke, to investigate the under-remittance and report back to the House.
Hon Ayo Omidiran had brought a motion urging the House to look into the report that the CBN contrary to Section 80 (1) and (2) of 1999 Constitution as amended which stipulates that all revenues recovered by the Federation should be paid into the Consolidated Revenue Fund of the Federation among others had instead paid some of the revenues to accounts other than the Consolidated Funds Accounts thereby denying the three tiers of government the requisite funds that should accrue to them.
The Motion lamented the unprecedented manipulation of the system by the CBN which has even taken it upon itself to prepare the Federation Account statement instead of the office of the Accountant – General of the Federation. It noted that the CBN being the banker of the Government receives financial inflows on behalf of the Federation and is expected to make same available on demand through the Federation Account on monthly basis. But that the CBN has taken advantage of this all – important function of ware housing the funds for the three tiers of Government and preparation of the Federation Account Statement to “Manipulate the System by opening various accounts not known to the three tiers of Government where funds are remitted, hidden, diverted and spent without authorization”.
The motion further notes that the CBN had as far back as 2006 opened various accounts with JP Morgan Chase Bank in New York, USA in which the International Oil Companies (10Cs) remit all revenues for the Federation and that the CBN still operate all those accounts till date alongside the account with Federal Reserve Bank of New York, USA.
It expressed concern that the CBN’s responsibilities of receiving revenue in foreign currencies and converting same to Naira for the benefit of the three tiers of Government has led to substantial loss in the amounts remitted to the Federation Account. According to the Motion, the manipulation of the system is more pronounced in the substantial difference between the official exchange rate of Dollars to Naira, and that of the Bureaux change in the parallel market.
This manipulation the motion stated, has led to occasional disagreement and postponements of FAAC meetings lately due to irregularities observed in the Federation accounts by the states.
It expressed serious worries that through the CBN takes O.25 % of all foreign –denominated revenue as “exchange commission” (for Converting Dollars to Naira), the CBN still credits the Federation Account with proceeds far less than expected, leading to negative differentials running into Billions yearly.
More worrisome, according to the Motion, is the unusual silence of the office of the Accountant-General of the Federation in the face of all these CBN infractions running into Trillions of Naira.
Most of the members interviewed on the Motion expressed serious concerns about the state of the Federation Account as being managed by the CBN and opined that the Motion had come at a most appropriate time when most states are unable to pay workers salaries, when Local Government workers are going through harrowing experience over unpaid salaries, and capital projects suffering various cases of neglect owing to the sharp drop in revenues accruing to the Federation Account.
It is the view of members that the situation would not have been that critical had the CBN and NNPC remained faithful to their remittances to the Federation Account.
Economic analysts are of the view that the macro-effects of these under-remittances on the nation’s economy have been very massive, slowing the GDP in the process.
The 11-Man Adhoc committee is expected to do a proper forensic analysis of these infractions and report back to the House.
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