FG, states opt for talks on Excess Crude Account

The Federal Government of Nigeria and 36 State governments are exploring the option of settling their dispute over the Excess Crude Account out of court, both parties claimed after the meeting of National Economic Council today.

The account which was created by former President Olusegun Obasanjo’s administration in 2004 has been a source of acrimony between the federal and state governments.

Some states, led by Lagos are currently in the Supreme Court, asking for a refund of their shares of the federation revenue which have been used to fund the account.

The States said the account is illegal and that the federal government did not seek their input before establishing it, to receive funds in excess of estimated prices of crude oil.

But the Federal Government on its part claimed that account is being kept as a stabilization fund to protect the country against global economic crisis as witnessed between 2008-2009 global meltdown.

The Supreme Court had at the last hearing of the case given both parties a deadline to settle the issue out of court.

The state governors had also recently threatened to go to the Supreme Court to stop the federal government from the continued deduction of funds it claims it is using to finance the fuel subsidy and other deductions from the federation accounts.

Lamido Sanusi, the Governor of Central Bank of Nigeria who briefed journalists alongside Governor Peter Obi of Anambra, Kayode Fayemi of Ekiti, the minister of state, Finance, Yerima Ngama however told journalists that that there is progress on the move to settle the issue out of court ahead of the Supreme Court deadline.

“The decision of NEC is that within two weeks, the lawyers should finalise the positions and the Ministry of Finance and the Governors should sit and agree and at the next NEC meeting, we should be able to get a solution.

“This solution is important because the Supreme Court has given us till second of September for an out-of-court settlement to be reached. If it is not reached then, the trial will continue. But from all indications, both parties are willing to arrive at an understanding of what is due to each party and also an understanding of how the indebtedness of any party to the other will be settled,” said the CBN Governor.

He added that lawyers from both parties are expected to reach decisions on the issue in the next two weeks. According to him, the decision will be discussed at the next NEC meeting.

He identified the major subject of contentions between the parties to include excess crude account, the signature bonuses; collection cost; waivers and concessions; other dividends and Internal Generated Revenue (IGR); CBN charges which he said has been sorted out; NLG dividends; proceeds on sale of government properties; privatization proceeds; establishments and operation of federation account, and FG expenditure on state and LGAs.

“The sub-committee that was set up that had a number of state governors, the ministries and the CBN to try to fashion out out-of-court settlement has submitted its report. It is an interim report, the lawyers representing both parties have been discussions, and there has been a significant progression term of harmonising positions”, he added.

The Council also discussed the state of indebtedness in the country and the management of disasters. NEC consequently asked the National Emergency Management Agency to help states and local governments set up their own emergency management agencies.