INTERVIEWS

TRANSCRIPT OF THE PRESS CONFERENCE ADDRESSED BY ENGR. HAMMAN TUKUR CHARMAN RMAFC AT THE COMMISSION’S CONFERENCE ROOM ON DECEMBER 17, 2003 WITH FINANCE CORRESPONDENTS

What can you say about the reconstituted constitutional committees of the commission?

Hamman Tukur: In line with its mandates and for efficiency and transparency in its administration the constitutional committees in the Commission were restructured with additional committees for JVC, Cash Calls, and Federation Account for proper monitoring, transparency, equity and fairness in the system. The restructuring of the committee is to reflect issues that are current in the Nigerian economy. For example, the Federal Government has through a letter from the Secretary to the Government of the Federation requested the Commission to closely monitor JVC operations on behalf of all beneficiaries. There is also the need to now actively pursue monitoring of all accruals to and disbursement of revenue from the Federation Account not only to establish fairness and transparency but to also build confidence on all beneficiaries of the Federation Account. The committees are on Oil and Gas; Non-oil and Royalties; Disbursements and Indices; Fiscal Efficiency and Budgeting; Remuneration and Monetisation; Explorations of Minerals and on Federation Account.

Q. How successful would you say is the monetisation policy for public officers?

Hamman Tukur:. The revenue Commission only deals with the political office holders including the judiciary. They cut across Executive, Legislative and Judicial officers. Revenue Commission’s monetisation policies are directly related to those officers only while Civil Servants is the responsibilities of Salaries and Wages Commission. We would define them again so that we don’t get confused. We have elected officers in the categories of the elected legislators at the N/Assembly, States and local government councils. The Commission by virtue of the constitutional provisions determines, their salaries and allowances. Whatever we recommend for the legislators is constitutionally binding and not subject to further review by them. But when you go to the judiciary and executive arms, the respective legislative arms at Federal and States must look at our recommendation and then pass into the law, which constitutionally they may bring it down but cannot increase it beyond what we recommended.
 

Q. Now how do you monitor that?

Hamman Tukur: We’ve been monitoring those categories of officers but have nothing to do with the civil service even though they also have public officers. We are not concerned in whatever way with the civil service at all levels.

For instance when we recommend a loan for public officers to buy their cars and repay it in six years, we would make sure the accounting officer of that arm of government account for it. The Accounting officers will be responsible if they give cars to the officers after taking the loan. Even if they reject the loan, government should not give them any vehicle. And if they take loan it must be deducted from their salaries every month. So all N/Assembly members are supposed to be riding cars on loan. If they stay in Apo Village, for instance, then they are to pay commercial rent on that property. There is no question of allocation like before where some officers collect rent allowances and still stay in government quarters. We have zonal and state offices and we monitor the state system too regularly. The government does not bother itself with maintenance and repairs of their houses and vehicle, since allowances are built-in for maintenances. Essentially that’s what we do.
 

Q.                (Cuts in) But how successful is it.

Hamman Tukur: The success of any scheme is dependent on the efficiency of the monitoring system. So I recommend that you get a copy of our package and see the difference between what we are doing, the cost implications, the benefit to the economy and you will agree with me that we have achieved tremendous success.

Q. How is the Executive arm of government complying with the policy, because we have some ministers riding more than two cars against the stipulated points? So what is the commission doing about this?

Hamman Tukur: The ministers are supposed to obey the law because they are members of Federal Executive Council. If they do anything else they know for sure they are doing something wrong. The law says they should take a loan for cars and limited the numbers of their personal aides.

Q I know your commission makes inputs to FAAC, between April last year to date some amount of money have been deducted from allocations to the states. These amounts are meant to service debts owed by them. How much have been deducted to date, are these amounts kept in a special account. The debt load was 30 billion now it is 31 billion what is happening t the deduction. The NEC has recently given the nod to the commission to harmonize tax liabilities. What is the nature of the outstanding tax liabilities?

Hamman Tukur:  The debts we are talking about is actually in four classes. The debt has a principal. There is an interest on the principal; there is delayed payment on the interest; then there is a penalty on delayed payments. We are at the fourth stage. We have to sit with the people we owe or you are going to remain on the fourth state perpetually unless all your earnings go to pay interest on penalties. That’s what we are paying now. You know the value of out budgets how long would it take us to pay especially with the current value of our currency. We encourage and advise government to negotiate with the creditors so that it could move to stage two. On the tax question especially the intergovernmental tax. Let me give you an example. For instance state governments collect VAT on behalf of the federation but some of them try to withhold it. Same at the LG level where we have the PAYE, they too try to sit on it. Some of these too may be seen at the federal level. Each one tries to sit on the money that is not exclusively theirs. We will send our staff to the states of the federation early January to try to reconcile these issues. We have to reconcile who owes whom. The quantum of money we are talking about is about N98 billion. So at the end of the day, the Federation Account is short by N98 billion.
 

Q) Have you rested the case on NNPC and what would be done with the recovered looted fund? Are they to be shared among the states?

Hamman Tukur: On the recovered looted funds, the FGN is saying this is its money but the Commission recommends that unless they can prove that the money was looted from the their consolidated fund or of any tier. These money are coming from undefined sources and we are going to carry out investigations to know its source of origin for fairness. Section 162 (2) of the 1999 Constitution says all resources from whatever means should go to the Federation Account. If it goes to the Federation Account the FGN would still get the larger share. If you put it in education the whole country would still benefit. But once the sources of the looting are traced to any tier’s revenue, it will definitely go to the original owners, but if not it is advisable to put them in the Federation Account.

On the NNPC account and shortfalls. Mr. president has directed the NNPC to begin to pay commercial rates on domestic crude. Formerly the NNPC was short-changing the nation about 18 dollars per barrel. And at the CBN the NNPC was getting a flat rate of #110 per dollar. Now the NNPC buys 450,000 barrels at commercial rates. The $10 gain is commendable and the Federation Account is benefiting. And that’s that we have been saying. With the new management, we hope things would be better. They should operate on the table and let everything be clear for proper accountability and transparency.
 

Ques) I want to know what has happened to the disputed oil well and what you are doing about the escrow account.

Hamman Tukur: Essentially almost all the 9 oil-producing states are claiming lands that extend into the next state. Ondo has problem with Delta, Delta has a problem with Rivers and all that. It is not the duty of the Commission to resolve boundaries. That is the duty of the Boundary Commission. So we normally resolve these issues when the Boundary Commission tells us officially the boundary between states x and y. And so normally we keep money of disputed oil wells in the escrow account until the boundary problem is resolved. We do the same thing with the Archipelago Island. Together with the Boundary Commission and other relevant agencies, we try to settle the disputes and before that we keep revenues from those areas in the escrow account pending the resolutions.
 

Ques) How much is in the account.

Hamman Tukur: It keeps fluctuating but not more than #200 million really.
 

Ques) How much have the nation made from the privatization process and what has happened to the money.

Hamman Tukur: We exchange correspondences with the BPE. We have asked them where is the money, and the same problem came up. Does the money belong to FGN or what? But the money we understand has been saved in an escrow account. We are still exchanging correspondence and we would decide whom the money belongs to. I can assure you, we are worried about the issue as much as you are.
 

Ques} sir we want to know the present state of the revenue formula and what you are doing about it.

Hamman Tukur: we had a meeting at the Presidency with some of the stakeholders, including some governors and leadership of National Assembly, the FGN is complaining about the methodology used in arriving at some of the decisions. In some areas the criteria applied tend to put the FGN at a disadvantage. These were some of the examples given, especially in the energy sector. In administration, the N/Assembly and the judiciary are paid by the FGN. I think at the Nation Executive Council meeting they have been able to persuade the President to withdraw the bill from the National Assembly. If the FGN can now adduce sufficient argument to make the Commission review the formula, we would do so, if not we stand by the last one. But in the spirit of democracy we are ready to dialogue for any development.
 

Ques) Sir the President was alleged to have talked about the existence of fake revenue bills.

Hamman Tukur: Yes. The issue is about several versions of the bill. There are about five versions. there is one from the House of Reps and other private bills.
 

Ques) What is the position of the Commission on the State Joint Local Government Account seeing that the panel on local government reforms has recommended the scrapping of the account.

Hamman Tukur:  It is only the review of our laws that can justify such a decision. As the law stipulates everyone in the tiers of government know their entitlements from the Federation Account. The states use a different formula to now redistribute the money among the state and the respective local government by some form of state law.

The Constitution in Section 162,(5) (6) (7) and (8) state’s that the Commission should decide what all the three tiers should get, but the same Constitution in another breath seem to say that the states can do with the local government as they like. so we would go to the court to resolve this and for proper interpretations.

The Revenue Commission is making arrangement to seek legal interpretation of the constitutional provisions on the issue. The Delta state government had taken the Commission to court on the same issue along with all the 35 states but the Supreme Court dismissed the case on grounds of want of jurisdiction. So we would be going to the Federal High Court, and to a higher court if needs be.