Henceforth, there will not be joint cash call with oil companies operating in Nigeria, said the National Economic Council (NEC).
NEC made the announcement at a meeting which held in Abuja on Thursday.
It also directed the federal Ministry of Finance to stop deductions by agencies for payment of allowances. This also involves other expenses not approved by government.
Cash calls is the counterpart funding, which the Federal Government, represented by the Nigerian National Petroleum Corporation, annually pays as its 60 per cent equity shareholding in various oil and gas fields operated by international oil companies and indigenous oil firms. The development is then expected to generate about $15.
Briefing reporters at the end of the meeting, the Minister of State for Petroleum Resources Ibe Kachikwu revealed that Nigeria owed call arrears of $6.8 billion for over five years.
Paucity of funds prompted the decision
The minister addressed journalists alongside Governors Willie Obiano of Anambra State and Mohammed Abubakar of Bauchi State.
He said the main reason for the cash call withdrawal was due to paucity of funds resulting from the fall of crude oil prices.
According to the minister, it is now almost impossible for Nigeria to meet its cash call obligations.
On his part, Governor Obiano said NEC was briefed that generating agencies raise as much as N1.5 trillion yearly.
Agencies violated constitution, says Obiano
He said the agencies spend almost 90 per cent of it on recurrent expenditure. That, according to him, is a clear violation of due process and the constitution.
Obiano further stated that the agencies have abused payment of salaries above specifications by the RMAFC and converting official cars to personal ownership under 48 hours of purchase. He also listed inappropriate and arbitrary monetization of medical allowances; undue and excessive overseas travels, lavish training allowances and conference spending; excessive and personal loan approvals and unapproved mortgages, among others.
Some of the federal revenue generating agencies are the Federal Inland Revenue Service (FRIS) and National Communications commission (NCC).
Others are National Pension Commission (PenCom), Nigerian Immigration Service (NIS) and the Nigerian Custom Service (NCS).
Governor Obiano said the abuses by the agencies have been going on for a decade.