The Postmortem Sub-Committee of the Federal Account Allocation Committee (FAAC) has recommended that the Federal Government refund the approximately N228 billion loan taken from the non-oil excess revenue account to finance the 2023 general elections.
This recommendation follows a detailed report signed by sub-committee chairman Kabir Mashi on December 14, 2023, highlighting concerns raised during a FAAC Plenary meeting in September 2023.
The sub-committee’s investigation revealed that the loan for the 2023 general elections constitutes about 26% of total deductions made between January 2020 and October 2023. Other deductions included a refund of gas flared penalty to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The report indicates total inflow into the Non-Oil Excess Account from January 2020 to October 2023 was N2,607,067,427,659.48, with N846,159,187,753.64 deducted for various purposes. Notably, the Federal Government borrowed N227,998,501,190.36 for the 2023 General Elections.
In recommendations, the sub-committee advises refunding the total deductions of N864.16 billion for other purposes back to the account and emphasizes future deductions should align with the vertical revenue allocation formula.
The Non-Oil Excess Revenue Account appears to operate similarly to the Excess Crude Account (ECA), serving as a fiscal buffer during economic downturns. However, deviations from the vertical revenue allocation formula, outlined by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC), raise concerns about adherence to fiscal management protocols.
Efforts to revise the revenue allocation formula in the past have faced challenges, with the current formula allocating 52.68% to the Federal Government, 26.72% to states, 20.60% to local governments, and 13% for derivation. Proposals for revision under the previous administration were not approved, maintaining the existing status quo in Nigeria’s revenue allocation.