Drop in oil revenue temporary, states’ finance commissioners say

Finance Minister, Ngozi Okonjo-Iweala
Finance Minister, Ngozi Okonjo-Iweala

States are optimistic that revenue earnings are likely to improve before next revenue allocation meeting.

The drop in oil revenue by the Nigerian government, in August, will not have any significant impact on the nation’s economy, the Commissioners of Finance for the 36 states have said.

The commissioners, at the end of their meeting, allayed any fears Nigerians may have saying the situation was only temporary.

The Federation Accounts Allocation Committee, FAAC, at the end of its monthly meeting last week, announced the drop in revenue .

The Accountant General of the Federation, AGF, Jonah Otunla, told reporters at the end of the meeting that Nigeria witnessed a huge decline of N260.512 billion in gross revenue in the month of August, with about N564.884 billion received, as against N825.396 billion received in July.

Mr. Otunla attributed the situation to a drop in crude oil production, and lifting operations, as a result of Force Majure declared at Bonny Terminal; and a shutdown of Balema Gas Plant and Trans Niger Pipeline, as a result of security challenges experienced by the Nigerian National Petroleum Corporation (NNPC) in their area of operations.

The drop in oil revenue earnings for the month had necessitated FAAC to approve about N143 billion to augment allocation to states to enable them meet their budgetary commitments for the month.

The Chairman, Forum of (Finance) Commissioners, Timothy Odaah, however said there are indications that the situation would improve when the FAAC reconvenes to consider the allocation for the month of September.

“There is much understanding among members of FAAC, because the states would not have agreed totally to a reduction in their revenue allocations. But the circumstances the country has found itself have made us to agree to the terms. And by next FAAC, there would be much more improvement,” the commissioner said on Monday after their meeting.

Mr. Odaah encouraged the states to step up their drive to diversify their revenue sources in order to boost developmental projects.

He drew attention to the huge potentials available in the solid minerals sector, saying there is a need for the exploitation of the resources so as to be included as the basis for derivation.

“Almost every state in the country has some solid minerals or oil in their lands, and so if that is done, it would be an incentive, because we have seen dwindling economies all over the world.

“It is not only in Nigeria, and the clarion call is that every state must do a lot in order to beef up their internally-generated revenue base,” he said.

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