RMAFC: Watch Dog Of Our Economy?

By

Haimd Abubakar

hamidabu2910@yahoo.com

 

         

When you read on the pages how much is stolen through fictitious accounts by Government Officials in this country and in millions and billions, one is amazed, that this Nation is so rich, but so poor, due to conscienceless leaders. You cannot imagine the prevalent poverty in our villages, poor infrastructure and how uneducated and unlearned our citizens and our children are; yet we have abundant to rescue such situations. Let us digest the two page interview granted by Engr. Hamman A. Tukur, Chairman, Revenue Mobilization Allocation and Fiscal Commission, in the Business Trust of Daily Trust, Monday, January 21, 2008, pages 30 and 35 -Guest of the week – with the screaming title.

         

The Existing Revenue Formula is Illegal: Though a lot of water has passed under the bridge as the Senate has passed a New Revenue Formula, some few weeks for Certain Political, Public and Judicial Office holders (salaries and allowance) Act, a lot needs to be done in other areas of the management of our Revenue accruals.

         

The interview conducted by Jibrin Abubakar and Idris Ahmed of the Daily Trust delved into so many squander, waste, extravagance, theft, arm-robbery and the megalomaniac greedy behaviour of certain persons who are   privileged to serve in certain influential positions of our Nation. Where is the saviour?

         

The first question they asked was, Do we have a revenue sharing formula in Nigeria? Oga Chairman, Revenue Commission of Nigeria said, “Yes and no! Yes; in the sense that they are distributing the Federal Account based on some kind of formula. No, because the formula, we were using was not the legally acceptable formula in the rule of law. He disclosed, they have designed as Commission under their constitutional responsibility a revenue formula and submitted same to the National Assembly (the senate has passed it at this moment). But he noted that the Supreme Court made judgment in respect of resource control, where they nullified the existence of what was called special funds. Officially, they did the formula to satisfy the Supreme Court ruling and made a special fund under the trustee of the FGN. They advised Mr. President within his constitutional requirement according to him to issue an Executive Order, which becomes a law automatically and can only be amended by the National Assembly. It is only to bring his executive order with the Supreme Court Judgment coupled with the 1999 Constitution. Unfortunately; state Governments went to the then President and pressurized him to amend the law.

         

Obviously under democracy, the President has no legal right to amend a law, but he did and even after that they received a circular from the then Minister of Finance to adjust the formula again.

         

Definitely, the formula we were operating was based on the circular received from the then Minister of Finance which made it an illegality. This is why he said yes and no. He went on to say they were distributing funds based on some kind of formula, but that formula (the former as at today) was null and void. They were distributing money among the beneficiaries by an illegal formula. But unfortunately, the new formula was still there. Over the last years, it had been at the National Assembly. Unfortunately, it tended to suffer transition from one National Assembly to another. “Right now, we are trying to find out what is the legal way of doing it. Even yesterday we had a meeting to brainstorm on how to move forward. We are pleased to hear from the Senate President, when they had a retreat in Port-Harcourt, saying he will take up the proposed new revenue formula after the 2008 budget and he did. The former speaker, Patricia Etteh, promised to do something about it but the new speaker has not said anything about the proposed new revenue formula. This is the dilemma, we are now. And for all these democratic governance, we have had in Nigeria; we have not had a legal Revenue Allocation Formula. I think it is a shame. You have democracy and yet our resources cannot be distributed within democratic principles.

         

Jibrin Abubakar and Idris Ahmed asked another question that former President Olusegun Obasanjo was commended for paying Nigeria’s long-standing debts with the Paris Club; money from the excess crude account was used to pay the debt. The Adamawa State Government is contesting the method. What is the position of the Commission?

Then Engr. Hamman A. Tukur, the Chairman of the Commission said “our position is yes; paying the debt is a good idea, but you are to pay the debt within the rule of law. Now, removing $12 billion dollars from any economy is not the best thing that can happen in the sense that no economy in the world can afford to part with $12billion at a go, even United States America’s economy, which is said to be the strongest. In that regard paying the debt, he said, it is okay, but to part with that kind of money at a particularly within the Nigeria’s infrastructural status, may not have been the best decision. That is one aspect. Secondly, the debt was paid on the assumption that all states owe equally. I think that was what happened. The debt was paid as if the Federal Government and all the 36 states owe the Paris club equal amount. But the $12 billion was from the Federation Account, which means all the three tiers of Governments are entitled to their own shares. Somehow, we now found out that Katsina, Kaduna and Nasarawa States did not owe the Paris club. They did not owe the Paris club, one dollar, but their shares out of $12 billion were used. Similarly, the 774 Local Governments are not even allowed to collect loans, but their shares of about $ 2.4 billion were part of the $12billion paid to Paris Club. Tirkasi – that is the Adamawa man for you, the administrator, the expert in economics, in electrical electronics. If he can be allowed, to nurture, to be given the chance to form a Government of his own taking into this consideration his team – then it will be Governance by integrity, credibility, and truth and rule of law.

         

Okay, that last line is my own opinion, because a team also makes the leader and good-team makes a good Government. Here are other parts of his answer to this question, still asked.

 

Obviously, under the rule of law, Local Governments must get their own $2.4 billion dollars to them, he continued, but, he interjected, somehow it didn’t happen. Today, we have discussed with financial institutions in the country, the Federal Ministry of Finance and so on and the money are being refunded, if you owe only $200,000.00 dollars, but your share of that $12 billion was $800 million, we are now to give you back your $800 million. That is an example. You might have read it in the papers yesterday that $1.8 billion is being paid to states as part of their Paris Club over payment. That is what is happening now. But nobody seems to talk about the $2.4 billion belonging to 774 Local Governments. The Commission is trying to hold discussion with the relevant institutions to pay them, since they have no voice per say. How can they get their rights? They are the poorest tier of Government and they must not lose such a large amount of money. $2.4 billion, will give your over N200 billion or N300 billion and they need it for their development. These are the issues, billions of dollars and billions of Naira are stolen everyday and honestly, we must publicize these things.

 

So that the Nigerians Public know the crime done or even stand against such bastards, that put us in danger of armed robbery, poor roads, and no electricity. All these billions of dollars and Naira, you have been reading about can build several thousand of estates and sold to us and minimize or curb our housing problems and accommodation.

 

On Adamawa State, the Chief Executive did say this “when you talk about Adamawa, they did not owe some of the claimed loans, they have already paid the Paris Club. They built Yola International Hotel from their own resource, but somehow, in the loan, it was reflected Adamawa International Hotel, was built from a loan from the Paris Club and the loan was paid. So, we took it in a special case and I think about $104 million was involved and they went to court. Somehow, the records for these debts were not properly kept, that, was why the Commission came in to now investigate under constitutional responsibility. The former President assigned us to look at the records – we now looked at states and Local Governments. We discovered that when you pay debt, it is unusual for you to pay a commission on it. Here is how he put it directly. “If I took loan from you and I want to pay you. Why should I pay you a Commission? It does not make sense, rather you should give me a commission, because I am paying you a debt, that you may have lost hope of recovering from me. But in the case of Paris Club, a commission of 1% was charged, who benefited from the commission? 1% commission was quite a large amount of money. We went to the National Assembly and mentioned these and they said they will investigate it. The money we lost was running into multi-million dollars. Why should we pay a commission? Two or three publications were in the papers on this and the thing died down. This is encouraging corruption in the country. Who took that 1% commission and who paid in the money? When we now wrote officially to the former President, he said ok, instead of 1% reduce it to 75%. He was under the misconception that it was the consultant fee. That 1% was outside the consultancy fee. I have forgotten the team of consultants that were appointed; we paid them separately outside the 1% commission. The 1% was purely corruption. It was 419, but today nobody is talking about it.

 

The journalists asked what you (the commission) are going to do about it. “It is not our job. We reported it to at least the former President. You want us to take it to the EFCC? You report a specific person to the EFCC, but in this case, we don’t have a specific person to report. It is not our job to report people to the EFCC. The question, who paid the money and who received the money? I think that covers your question about the Adamawa Government. There was a consultant negotiating between the Nigerian Government and the Paris Club and we paid them a consultant fee which was published in the newspapers. The amount was over a hundred million dollars. Paris Club were not the original owners of the loan, they got the loan from individual country that forms the Club. Paris Club earns more money by making sure that the debts are paid. Our own side was getting money from the Government of these states without remitting the dollar equivalent to the club. So, they are charging us the principal debt, the interest on the principal debt, the penalty for delaying payment and the interest on delayed payment. That was when the debt raised from $ 18 billion dollars to thirty something. Go on Hamma Manga. We paid everything and at the same time, we have to pull from our economy $ 12 billion. We could not have afforded to do so in our economy, but we did that and those that paid, that are now major officers of the World Bank.

Some other question the Panel of Interviewers asked the Chairman of Revenue Mobilization Allocation and Fiscal Commission was that what is the position of the commission on the State Local Government Joint Account?.

 

Here is the answer. “By the law of the Commission, we are members of the Account. That means each member from each State will be a member of that Account. Subsequently, the National Assembly passed a law on the State Local Government Joint Account to now involve the Federal Ministry of Finance. Some States went to the Supreme Court and the Supreme Court nullified the law in 2005. In our own case, we are affected in the sense that any commissioner from any given state must not serve on that Account. He must to go to another state. And there is a penalty for anyone that contravenes this. But the law setting up the State Local Joint Account is still there. Some of the states in the Federation are opposing the Account.

 

We are still operating the account in some states, while some states are not allowing the committee to be involved.

 

Some states in the North and some in the East are against it, but almost all the states in the Southwest are generally against. This is as a result of the resolution of the Governors’ forum where they agreed that they should not allow any member of the commission to be involved in the State Local Government Joint Account Committee meeting.

 

The position of the commission is that we should follow the provision of the law establishing the commission which has made Revenue Commission a member of the State’s Local Government Joint Account at the various States.

 

We wrote and some states are now respecting the provision, because they have no option. But before this time, what was in place was the monitoring of the State Local Government Account Act 2005, which some states challenged. The Supreme Court for the reason best known to them nullified that law and we have to revert to our original position, which is that each member should attend the meeting of the State Local Government Account. This is the position of the commission, which is different from the position of the Governors’ forum. This is a Federal Government Law and the state cannot set up a law that will nullify the membership of the Revenue Commission.

That is what we have been preaching to them, but the Governors’ forum are saying, their law does not admit commissioners from the Revenue Commission.

 

The other fundamental question that is touching was how much has Government made from the Privatization of Public Enterprises and where is the money? “Well, let us look at the Legal aspect of it. Section 162 subsections 10 of the Nigerian constitution 1999 is clear on where money defined under that section should go to. Section 162 (10) says for the purposes of subsection one of this section, it talks about the country maintaining a special Account called a Federation Account and it says Revenue means any income or return accruing to or derived by the Government of the Federation from any sales and it include.

 

(a) Any receipts however described arising from the operation of any law

 

(b) Any returns however arising from or in respect of any bond held by the Government of the Federation

 

(c) Any return by way of interests or loans and dividends in respect of shares or interest held by the Government of the Federation in company or statutory body. This is the position of the section 162 (10) of the constitution. The FGN has been selling assets belonging to the Federal Republic of Nigeria through the Bureau for Public Enterprises, (BPE). I think we told them, bring all the returns, all the proceeds of these sales back to the Federation Account, same thing with all the three tiers of Government. The money does not belong to the FGN as a tier of Government, but to the Federal Republic of Nigeria. The FGN has been claiming that money into its own account rather than the Federation Account. You should distinguish between the Federal Republic of Nigeria and the three tiers of Government. First tier being the FGN, second tier being the 36 States of the country and third ttier being the 774 Local Governments in the Country. Federation Account is what concerns the Revenue Mobilization Allocation and Fiscal Commission, (RMAFC), and we wrote the BPE to bring all the proceeds from the sales back to Federation Account and they have not responded since they started selling these assets. Legally, the proceeds belong to the Federation Account. In practice, we have not received such money. So to us, where is the money kept? The answer is we don’t know. Go to the BPE and ask them and when are they returning the money to the Federation Account?

 

What is the position of RMAFC on excess crude Account? Excess Crude Accounts is not same as Excess Revenue Accounts, because you are now referring to a specific crude oil. Excess crude Account has got two components, the equity crude, that is the Nigeria’s share of crude oil with each firm like Mobil, Shell and so on. You know Joint Venture Company (JVC), 60% whatever crude we get from Nigeria belongs to the Federal Republic of Nigeria. That is the one we call equity share of crude. Out of that amount, the NNPC picks 445,000 barrels per day for domestic refining and they pay in Nigeria. So, there is the dollars

Excess Crude Account.

 

What is Excess Account? If for instance, the National Assembly or the Minister of Finance fix, what they called a bench mark, that is minimum price for oil per barrel per day, if for instance the minimum proposal for this year is $53.83, if we sell crude oil above that amount, it is kept in an account called excess crude account. There is also excess non-oil receipt. They are also in dollars. You must differentiate between excess crude and excess non-oil account as well as the Naira version of excess crude arising from the 445,000 barrels lifted by NNPC Daily.

 

Excess of anything is not within the rule of law. Section 162, subsection (I) says all Revenue must be distributed to the beneficiaries. That is the three tiers of Government and you can therefore not pick anything. You accumulate the money at the end of the month, you distribute them. The Federation Account in theory is a zero account. Because of this excess thing; you find some or a lot of money have been kept outside what is being distributed and that is not within the law. Keeping the excess account is illegal, null and void. Supreme court says so but we are keeping it for some reasons. I think it is a practice inherited, but within the rule of law, which is the cardinal point of this administration. I think we may have to revise it in the sense that it does no make an economic sense to keep money, when your infrastructures are crying for development. If you have no rail lines, no road, no hospital, no school, no thing, how can you keep money? You take the money and develop your infrastructures. It does not make economic sense to keep money when your economy is crying for development. That is the position of the Commission

 

The last question that capped everything went thus. Though our President later cancelled the request but for those who do not know and for further future reference here is how the question went. Recently, the Secretary to Government of the Federation advocated for the amendment of the law of Monetisation. Generally how successful is the monetisation policy?

 

Engr. Hamman A. Tukur explained, monetization is actually to help the country, to bring sanity into the way and manner, in which money is being expended in various aspects. You find a situation whereby a minister has various vehicles in order to stem that kind of action, we came about Monetisation, which says instead of getting vehicles, they were given money to purchase the vehicles and reasonable amount of money to maintain those vehicles are also monetized and provided, so that abuses that are characterized with Government attitudes toward purchase of vehicles, towards maintenance of residential houses and so on are reduced or cut off completely, where necessary except for President, Vice-President, the Governors, Deputy Governors, the Chief Justice, Judges, chairman of Local Government, Senate President, his Deputy, the speaker and the Deputy-speaker. We have already identified what percentage of the salary should be paid for vehicles in particular, because this one comes under the armpit of vehicles, where we talk of one billion. They have made available 400% of the salary for vehicles per minister down ward which translated in some cases to N8 billion. With, such vehicles should be available for use by ministers.

It does not means that they cannot have access to two cars, within the ministry but the question of each minister having five to ten vehicles is actually minimized through such a system.

 

But unfortunately, the Secretary to the Government of the Federation tried to put forward to Mr. President, a situation, whereby vehicles will be purchased for ministers, special Advisers and so on. In doing, that we know that we are going back to what we felt it was a sort of a drain on the resources of the country. We are happy that Mr. President was able to see the rightness, the correctness and the relevance of the monetisation to the country and by so doing, what he has actually done was to reverse direction given to purchase vehicles totaling one point something billion which was quite a lot of money. In developed countries, you are given money, you can decide to go to the office by bicycle or spend your money, the way you want. That is the kind of thing we are trying to fashion out and which was actually enacted in 2002. They are subject to renewal from time, to time which we tried to do last year with effect from February. The Public is against it, the mass media is against it, we, the architect of the monetisation policy are saying that, it should not only be given a chance, but should be allowed to bring normalcy to the system of government in this country. Mr. President saw wisdom of monetisation and was able to bring it back by telling the Federal Executive Council. In terms of security, it is not advisable to have all your principal officers in Government to be within the same environment. It is extremely dangerous particularly in African Counties as at today. That was why we introduced monetisation to bring modesty in Governance to improve security and to save Government expenditure. It was after a wide consultation with all the people concerned that the policy was introduced. All the legislative houses in this country were consulted. We had general meetings with the former President and his council to discuss the monetisation policy and we agreed, let there be saving in Government money and let there be security and let there be modesty in Governance.

 

What is wrong in a minister driving private vehicles to the executive meeting? It does not reduce him, it is his performance, that is important not the type of vehicles, he uses or the types of houses he is staying in. It doe not happen in developed countries. We must move away from these primitive concepts. Think about these for today. These are enough food for thought. A Nation in tatters. Mismanagement galore; where greed and gluttony thrive; unperturbed, un strengthened; no; Messiah?