FG, governors agree on way out of FAAC crisis, amid dwindling revenue

Ngozi Okonjo-Iweala

Finance Minster promises a resolution.

The Federal Government and the 36 state governors on Tuesday agreed on a solution to the revenue allocation crisis, which saw last week’s Federation Accounts Allocation Committee, FAAC, meeting end abruptly and in confusion.

At the last FAAC meeting, members, consisting of the commissioners of Finance and Accountant Generals of the states and the Federal Capital Territory, FCT, walked out on their Chairman and Minister of State for Finance, Yerima Ngama, returning to their states without the revenue allocation for May.

The Chairman of the Commissioners of Finance Forum, Timothy Odaah of Ebonyi State, who vowed that members would not back down on their action till all their demands are met by the federal government, listed their grouses to include, non-implementation of FAAC decisions and resolutions, particularly the May 2013 resolutions on the revenue arrears for last February.

Mr. Odaah also blamed their action on the failure of the committee to pay augmentation for April allocation, despite a resolution by members, adding that the FAAC administration in recent times has not been efficient.

“States have taken a lot of disappointment from the administration of FAAC which, by all intents and purposes, have become templates of ineptitude,” Mr. Odaah said. “States and local governments have been bearing with the situation. Workers and contractors have to be paid, the various programmes of the state governments and local governments embodied in their various manifestos to carry the federation of Nigeria along with other obligations have to be met.”

The Federal Government had reportedly said it could pay both the arrears of February allocation, totaling almost $1billion (N160 billion), and the augmentation for April after disbursing $1 billion from the Excess Crude Account, ECA, to the states on request; pointing out that doing so would deplete the account.

However, at the end of the meeting with the Minister of Finance and Coordinating Minister for the Economy, Ngozi Okonjo-Iweala and the four-man committee set by President Goodluck Jonathan to wade into the crisis, it was resolved that all arrears would be cleared immediately to move forward.

The expanded four-man crisis resolution committee headed by Bauchi State Governor, Isa Yuguda, includes Emmanuel Uduaghan of Delta, Peter Obi of Anambra, and Ibrahim Dankwambo of Gombe. Other members are Mr. Ngama; the Accountant General of the Federation, Jonah Otunla; and the Director General, Budget Office of the Federation, Bright Okogu.

Ms. Okonjo-Iweala, who is also a member of the committee, told reporters at the end of the meeting that some of the arrears arose from the period the government was trying to put its accounts together.

“We are now going to clear them,” the minister assured. “We have agreed now on what the arrears are and how much they are and we are going to clear them. No debt agreement to sign. It’s a federation account issue. We are all in it together. That’s the good news that we have.”

Mr. Yuguda, who also spoke at the end of the meeting, said that the mandate of the committee has been realized as all outstanding issues on the Federation Account crisis have been resolved, assuring that figures would be made available to the public immediately after the rescheduled FAAC meeting later.

He said that the Committee has also resolved to tackle in a decisive and sustainable manner the root causes of the revenue challenges facing the country, including illegal oil bunkering and oil theft.

Mr. Ngama said the main issue was that the government was facing a huge challenge of shortages in revenue, which has resulted in a reduction of the statutorily revenue allocations to the three tiers of government.

“We don’t have any debt issue at hand, and there’s nothing like an agreement, the main issue is we have shortages in revenue. So, the timing of when to pay the shortfall is the issue. It is another thing whether we delay it or pay immediately. But, all issues have now been resolved to make the payments,” he said.


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