Tougher times ahead as states share N388.3bn, lowest allocation in 10 months

Tougher times loom for states and local governments in the country as the Federation Account Allocation Committee (FAAC) yesterday announced N388.339 billion as the sum due to the three tiers of government for April 2015.
The said sum is a far cry from the the N435.061 billion shared among the three tiers of government the previous month, raising fears that the decrepit financial situations in states and local governments may worsen. Already, some states are unable to pay workers’ salaries.

Before now, the three tiers of government had lamented sharing around N560 billion mid last year when the slump in the price of oil in the international market began.

Assuming that the N388.339 billion is pro-rated among the state governments and the Federal Capital Territory to the exclusion of federal and local governments (which is impossible), each of them will receive on the average a paltry N10.495 billion to meet all their financial obligations for May 2015.

The states and local governments have also denied knowledge of any remittance of the sum of $1.48 billion the auditing firm, PricewaterhouseCoopers, instructed the Nigerian National Petroleum Corporation (NNPC) to pay into the federation account.

Addressing journalists at the April Federation Account Allocation Committee (FAAC) meeting on Friday, the Chairman of Commissioners of Finance forum, Barrister Timothy Odaah, said the states were not aware of any such remittance from the NNPC.

“Mr. President has directed that the money be paid into the federation account, same also as the Minister of Petroleum, but it is important to note that we have not seen anything,” he said.


Speaking on the inability of some states to pay civil servants’ backlog of salaries, Odaah blamed state governors for the development, saying: “If workers’ salaries could not be paid as and when due, what is their priority then? Why have those states refused to pay workers?

“Paying workers’ salaries is not an achievement by any government. It is naturally expected that people should and must be paid for services rendered.”

At the end of the FAAC meeting in Abuja on Friday, the committee approved for sharing N75.160 from Value Added Tax (VAT) as against N71.197 billion the previous month, and a gross revenue of N282.062 billion as against N315.044 billion the previous month.

As expected, the Federal Government got the highest allocation of N132.118 billion; states got N67.012 billion while local governments went away with N51.663 billion. Oil producing states also got the sum of N23.109 billion as 13 per cent derivation.

The Minister of State for Finance and chairman of FAAC, Ambassador Bashir Yuguda, attributed the low revenue shared in the past months to “frequent shut down and shut-in-trucks and pipelines at terminals which continued to impact negatively on crude oil revenue.”

Yesterday’s FAAC meeting was the last that would be presided over by Yuguda in his capacity as FAAC chair before a new government takes over on May 29..