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Published On: Thu, May 22nd, 2014

Federation Account: FG stops illegal deduction

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From Ayodele Samuel,Lagos

The Federal Government has stopped the one per cent illegal deduction from State’s share in the Federation Account.

Lagos state Commissioner for Finance, Ayo Gbeleyi, at a ministerial press briefing said the Federal Government has stopped the illegal deduction of the one percent.

He said the deduction which was arrived at the Federal Account Allocation Committee meeting was deemed irregular and challenged by the states.

“The first is one per cent statutory revenue allocation for police reforms that started in October 2013. The second is oil pipeline protection, which started three months ago. However, based on agitation and protest by the states, those deductions have been stopped.

“We now await the refund of those deductions to the Federation Accounts. We have seen incidence of perennial oil theft, pipeline vandalisation and pipeline leakages. Lagos sued the federal government over the 1 per cent deduction from Federation Account.

“For police reform, to date, we have over N200 million that has been deducted at Federation Account Allocation Committee which we expect an immediate refund. The deduction was done for over five months.

“As for oil theft, we have about N100 million that was deducted in two months. We are looking forward to constructively engage with the relevant agencies at the federal level to effect the refund,” he explained.

On the unaccounted $20 billion missing oil proceeds, Gbeleyi said the federal government claims to be auditing the account of the Nigeria National Petroleum Corporation, NNPC, saying the missing fund represented a challenge.

“We need to discuss the challenges we have faced in terms of distribution from the Federation Accounts. We have seen dwindling levels of revenue to the three tiers of government. We have seen situation of unaccounted for oil proceeds. Depending on whom you listening to, the most recent figure was put at $20 billion.

“We have been told that the Federal Government is already auditing the figure. We are awaiting the actual figure so that the three tiers of government can receive their monies to pursue their projects and programmes for the overall benefits of Nigeria,” he said.

Since October 2013, the Federal Government has been deducting one per cent from each state’s share of the Federation Account for police reform and oil pipeline protection.

Lagos state government had approached Supreme Court to stop the federal government from deducting the illegal one per cent from its allocation for the police reform, describing it as illegal.


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