FAAC under pressure to share N548.5billion from excess crude account

Finance Minister, Ngozi Okonjo-Iweala

The Federation Accounts Allocation Committee (FAAC) is said to be under intense pressure from the 36 state governors to share additional $3.5billion (about N548.45billion at N156.7 to the dollar) from the depleting excess crude account.

Few hours before the end of December 2010, an emergency secret meeting of the FAAC was convened to disburse $1billion (about N150billion) from the Excess Crude Account (ECA) approved by President Goodluck Jonathan following pressures from the state governors as a trade off for their support  for the People’s Democratic Party (PDP) presidential ticket during the primaries scheduled for January 11.

In August last year, the three tiers of government shared N1.317trillion for the month of June, the highest allocation in recent history, consisting N470.977billion allocation for the month and N710.71billion approved as arrears of augmentation to the budget for between January and April, 2011.

During the FAAC meeting held in October 2011, members again, following pressures from their state governors, agreed to withdraw another $1.5billion from the ECA, while another agreement was reached during the November meeting to share additional $2billion as well as $1billion last December to be paid along with the balance of the $500million from the disbursement in October.

But, at the meeting of the Committee held late Monday night members complained  against the delay in releasing the $2billion agreed last November and the second tranche of $500million from the ECA to the states during the December meeting.

Premium Times gathered that, Chairman, Commissioners Forum of the Committee, who is also Anambra state Commissioner for Finance, had told members that their governors were worried over the issue and appealed that appropriate measures be taken to resolve it and forestall a repeat in  future.

The Chairman was said to have said that their governors had informed them that an additional $1billion would be shared from the ECA for the month of December, wondering why the accounts of the states for the month did not include a schedule reflecting that payment.

The Accountant General of the Federation (AGF), Jonah Otunla, in his response, explained that the delay in remitting the $2billion to the states was because due process must be followed by getting the Central Bank of Nigeria (CBN) to authenticate the mandate by the Minister of Finance.

Mr. Otunla, who confirmed that the $2billion and the second installment of $500million had already been paid to the states, expressed regret over the delay in remitting the money, assuring that efforts would be made to fast track future payments.

Chairman of the FAAC and Minister of State for Finance, Yerima Ngama, explained that though the resolution  on the $2billion and the $1.5billion were faithfully implemented by the Federal Ministry of Finance, there was no agreement that the payment of the $500million was not to be made consecutively, adding that the $1billion raised by members was not part of the deal.

On the petroleum subsidy payments, he said that government did not make any provision for it in the 2012 budget was because it was committed to the implementation of full deregulation of the down-stream sector of the petroleum industry during the fiscal year.

He disclosed that the Federal Government was embarking on high level consultations on the policy and stressed the need for the states to vigorously educate their people to support  subsidy removal.

“The country is passing through a difficult phase which calls for the understanding of every Nigerian,” the minister said. “The expected gains from the subsidy removal would be invested in other productive sectors of the economy for the benefit of the nation. But, efforts must be geared towards increased revenue generation through diversification of investments.”

Meanwhile, several states are yet to submit information on their 2011 budget performance as requested by the coordinating minister of the economy and Minister of Finance, Ngozi Okonjo-Iweala.

Premium Times gathered that the deadline for the submission of the information lapsed more than two weeks ago, some states were found to have submitted incomplete details.

Those yet to submit their data include Bayelsa, Benue, Gombe, Imo, Kebbi, Ogun, Osun, Plateau, Rivers, Taraba and Katsina states..




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