UNTIL August 11, 2015 when President Muhammadu
Buhari ordered stoppage of multiple accounts, the
Federal Government had, for at least 48 years,
breached its own rules on collection and
management of national revenues.
Beginning with the Oliver Lyttleton
Constitution, the 1954 document that
conferred the status of a federation on
Nigeria, the central government has
always been mandated to operate a
single revenue account for the country.
Forty-five years after, Section 162, sub-
section 1 of the 1999 Constitution of the
Federal Republic of Nigeria (as
amended) states: “The Federation shall
maintain a special account to be called
‘the Federation Account’ into which shall
be paid all revenues collected by the
Government of the Federation, except
the proceeds from the personal income
tax of the personnel of the armed forces
of the Federation, the Nigeria Police
Force, the ministry or department of
government charged with responsibility
for Foreign Affairs and the residents of
the Federal Capital Territory, Abuja.”
As opposed to keeping common funds in
multiple accounts in commercial banks,
contrary to the provision of the
constitution, Buhari recently ordered
implementation of Treasury Single
Account (TSA), into which all ministries,
departments and agencies (MDSs) of
government, which are funded from the
Federation Account, will henceforth pay
their earnings.
Specifically, the MDAs will henceforth
pay all their revenues to a sub-account
that is linked to the TSA at the CBN. To
ensure quick compliance with the
directive, the Head of Service of the
Federation, Danladi Kifasi, gave the
federal sub-treasury account name and
number as Accountant General:
300002095.
Some of the MDAs affected by this
directive include Nigerian National
Petroleum Corporation (NNPC), Central
Bank of Nigeria (CBN), Security and
Exchange Commission (SEC), Nigerian
Ports Authority, Nigeria Customs Service
(NCS), Nigeria Immigration Service (NIS)
and Federal Inland Revenue Service
(FIRS), among others.
The constitutional provision for single
account — beginning from 1954 —
notwithstanding, investigation revealed
that since 1967, successive
administrations have “been breaking the
law” by operating multiple accounts.
Apart from the Excess Crude Account
(ECA), the latest in the list, the
controversial Sovereign Wealth Account
(SWA) is being challenged by state
governors, though it has been legitimised
by an Act of Parliament that birthed the
Nigerian Sovereign Investment Authority
(NSIA), the managing agency for the
Sovereign Wealth Fund (SWF).
In an exclusive interview with The
Guardian in Ibadan, Oyo State, a budget
historian and lawyer, Dr. Tunji
Ogunyemi, attributed operation of the
‘illegal accounts’ to “exigency and,
sometimes, corruption.”
According to him, “Sections 82, 83, 84
and 162 sub 2 of the Constitution of the
Federal Republic of Nigeria (as
amended) are clear as to what should
happen to monies earned. They say you
shall deposit all monies — with no
exceptions — earned by the federation
within a fiscal year, into the Federation
Account. No exception as to running cost
is granted.
“The National Assembly can then allocate
what one can take from the account. It is
not like there won’t be some set off, that
can happen, but it shouldn’t be in such a
way that an agency earns N162 billion
and spends N160 billion out of it.”
Ogunyemi, who lectures in the
Department of Economics at the Obafemi
Awolowo University (OAU), Ile-Ife, Osun
State, had, in a scholarly article, The
Trouble With Nigeria’s Fiscal
Federalism: Non-Statutory Accounts And
‘Un-due’ Processes In Fiscal Matters,
1967 to 2004, virtually indicted many of
the past administrations for allegedly
bastardising the TSA, through arbitrary
operation of illegal accounts in disregard
to the federating units. The article was
published in the journal, Transactions of
the Historical Society of Ghana (New
Series No. 14, 2012.
Ogunyemi’s position was corroborated
by Dr. Emmanuel Egbogah, an oil expert
and former adviser to the late President
Umaru Musa Yar’Adua, who, re-iterated
that the administration of former
President Goodluck Jonathan had
planned to implement the TSA in
February but was handicapped by
political issues.
Responding to the avalanche of reactions
trailing the policy, Ogunyemi said the
legitimacy and supremacy of the
Federation Account is enshrined in the
constitution, in which there is no room
for illegal accounts or exceptions on
remittances of funds accruing to the
country.
He argued that some accounts
established between 1967 to 2004
negated principles of revenue generation
and allocation in federal states and that
their continued operation “called to
question the integrity of the Federal
Government in keeping to the dictates of
the rule of law and the due process of
financial management as enshrined in
extant legislations in Nigeria.”
One of the cases of corruption
instantiated by the operation of the
illegal accounts, according to the budget
historian, is the shoddy management of
Nigeria’s external debts, particularly
with the London club of creditors. He
revealed that a debt servicing account
was illegally established in 1982, and
argued that the Federal Government
failed to consult all stakeholders in the
Federation Account and did not enact a
law to give it legal backing. The account
was discontinued after 2002, after the
Supreme Court declared it illegal.
Prior to the interview, Ogunyemi had
written thus: “During the period the
account was operated, the sum equal
five per cent of the accruals from
exports and income derived from
Nigeria’s investment abroad, which were
public revenues that belonged to the
Federation and not to the Federal
Government alone, was paid into it.
Despite the opening and maintenance,
Nigeria’s debt management was still in a
shambles.
“The debt increased from $4 billion in
1979 to $18 billion in 1985. Thus, the
fact that a special account was created,
the amortisation of the debt did nothing
to arrest its growth, rather, the
‘anatomy’ of the Nigerian economy
became, in the words of C.S.P Okongwu,
even more ‘traumatised’ due to the debt
and other factors induced by it. They
later handed the template over to
civilian rulers at the return to
democracy in 1999.”
Ogunyemi told The Guardian that, though
the legitimacy of the TSA was enshrined
in the 1954 Oliver Lyttleton Constitution,
the opening of other accounts started 48
years ago, during the civil war under the
Gen. Yakubu Gowon regime, to prosecute
the war.
“The origin for several accounts for the
Nigerian Federation can be traced to the
regime of Gen. Gowon, who was Head of
State for about nine years, from 1966 to
1975. That regime was awash with petrol
money, so it had to create several
accounts in England and the United
States, to receive the huge unexpected
income, after the civil war, which ended
in January 1970. These accounts were
dedicated to certain things such as
reconstruction of facilities that were
destroyed during the war; amortising
debts incurred during the war; and Joint
Venture Cash Calls Account for financing
joint-ventures between the Nigerian
government and oil partners among
others,” he said.
According to Ogunyemi, the
bastardisation of these accounts, from
dedicated to corruption-induced, and
arbitrary operations began with the
regime of then Gen. Ibrahim Babangida,
and later Gen. Sani Abacha regime, when
the country had stabilisation and
dedicated accounts which, he said, were
not really true to their purpose.
“The Revenue Mobilisation, Allocation
and Fiscal Commission (RMAFC)
established by Section 162 sub 2 of the
constitution, immediately there is an
accrual to the Federation Account, will
issue a statement to set aside 13 per cent
which should go to the oil producing
states, and one per cent to the Ecological
Fund. The remainder is what ought to be
shared in the percent of 52 and 48 for
the federating units. This is the normal
thing and no one should tilt it because
there is a law backing it up.
“However, there are several accounts
that the Federal Government has kept
without deference to the other
stakeholders. There are several of them.
Some are called dedicated or
stabilisation account. They are
completely outside constitutional
provision, as no section provides for
them.
“The regimes that practiced this most are
those of Generals Babangida and
Abacha. What we have today is that
politicians from 1999 continued with the
illegality from the military. Some of the
states were bold enough to challenge the
Federal Government,” he said.
Stressing that it behoves on the account
holder to close it since its objective has
been defeated, Ogunyemi said the
monies ought to have been returned to
the treasury.
“The legal foundation for the opening of
any account by the Nigerian government
is codified in sections 80 to 84 and 162
of the 1999 Constitution. Section 162 is
very clear about which account money
should be domiciled.
“All monies earned, according to the
constitution, must be kept in the
Federation Account. It is also known as
the Distributable Pool Account (DPA). It
doesn’t matter what it is called; it is one
single account. The proceeds and income
accruable to the Federation are kept in
this account, whether they are from tax
efforts or petroleum receipts or donors
or sales or income from courts and
offices. Income from assets, too,
especially Federal Government bonds or
seignoraige, that is, the income made
from producing currency, are paid into
the account,” he said.
The expert noted that “there is the
Consolidated Revenue Fund, which
belongs exclusively to the Federal, which
is provided for in the constitution from
sections 80 to 84. It is from the account
that the Federal Government budgets,
not the Federation Account. The
Federation Account is jointly owned by
the federal, state and local governments.
Abuja is not a beneficiary of the
federation account. A judgment in the
case between Attorney General of the
federation government and Abia State
government and 35 others, delivered in
April in 2003, rules that Abuja is not a
state and therefore cannot earn from the
Federation Account.”
The problem, he said, is that the Federal
Government has been dealing with the
Federation Account, particularly since
the regimes of Babaginda and Abacha, in
such a way as to completely
discountenance the other stakeholders as
if they knew nothing. “Instead of
depositing one per cent of earnings into
the amelioration of ecological troubles
known as the Eco Account or Ecological
Fund before sharing, the Federal
Government has been appropriating the
fraction to itself.
“Immediately the fund is set aside, it
ought to go to the fund from the
federation account and not remain
there. But the Federal Government
appropriates the one per cent into its
own and then determines when to
release it. Nothing can be more un-
procedural. It should ordinarily go from
source,” he added.
Egbogah, an oil and gas expert, said the
new directive would clearly enshrine
transparency and discipline in
management of finances. Egbogah has
had over 40 years of diversified
geological and petroleum engineering
experience in consulting, teaching,
research/ development, project planning,
implementation and management in
Canada, United States, Middle East and
Asia Pacific region. According to him,
payment of government revenues into
multiple bank accounts operated by
MDAs in commercial banks, “as obtained
under the older order, was clearly
against the Nigerian constitution, which,
in sections 80 and 162, directs that all
federally collected revenue should be
paid into the Federation Account.”
“This (implementation of the TSA policy)
is something very good, because, for the
first time, it will give the government
what you may call helicopter view — one
single look at what the financial
situation is at any point.”


www.ngrguardiannews.com/2015/09/tsa-fg-operated-illegal-accounts-for-48-years/

Let the change be seen!
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many revelations Nigerians weren't even aware of.. chai!
but what has past governments been doing?

Wailers, food is ready

Nigeria! Nigeria!! Nigeria!!! We still have long way to go

When I saw 'Oliver Lyttleton', I stopped reading knowing that am in for long story.

48 years? Well that includes his first stint as HOS... So if operating Multiple account's marked as corruption, Then he's also corrupt!

Wailers will be like "Buhari should probe those 48 years before probing jonatank"

OP abeg format your post well joor.

timilehing:
Wailers, food is ready

this wailers tin has actually gotten too old

This post too long but anyway it means that those ruling in d time of military rule must be probed...including buhari

The operation of multiple accounts was started in 1967 under the ignorant swamped government of Yakubu Gowon, continued under the rulership of Murtala and Obasanjo, out of sheer greed, not addressed under the puritanical regime of GMB, helped under the government of Abacha, Abubakar, OBJ, Yaradua and finally put a stop to by the innovative and interactive government of GEJ in Feb 2014.