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FAAC: Revenue shortfall delays disbursement of monthly allocations to States, LG councils

By The Citizen
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A shortfall of N140bn from the last month's revenue has frustrated the plans of the the Federation Accounts Allocation Committee (FAAC) to consider as well as approve the statutory distribution of revenue for the month of August.

For the second time this month, the Federation Accounts Allocation Committee meeting between the federal and state governments, which was reconvened on Monday, ended in a stalemate.

Before Monday's meeting, the committee, chaired by the Minister of State for Finance, Dr. Yerima Ngama, had met on September 13 for the statutory allocation.

The meeting had ended in a deadlock over the inability of the Federal Government to provide the N140bn arrears.

Following the disagreement between the federal and state governments at the September 13 meeting, it was agreed by the commissioners of Finance of the 36 states of the federation that since the issues in contention were beyond their powers, they should be taken to their respective governors for onward transmission to President Goodluck Jonathan.

However, it was learnt that the meeting between Jonathan and the governors that would have helped to address the issues had yet to hold when Monday's FAAC meeting was reconvened on the orders of the Accountant-General of the Federation, Mr. Jonah Otunla.

As soon as the meeting was reconvened on Monday, members of the committee made up of the commissioners of Finance from the 36 states were stunned when the accounts were presented with the N140bn shortfall still reflected.

The Chairman, Forum of Commissioners, FAAC, Mr. Timothy Odaah, confirmed the development while addressing journalists shortly after Monday's impasse.

He said 'We told them not to invite us until all issues are settled. Today (Monday) by, the AGF called me that the minister asked him to preside. He said I should come with the commissioners, I made calls to some of them and we are just coming back from him.

'In fact, he (AGF) was more confused than anybody else. He said he wanted to let us know that there was no change. We asked him the need for the invitation and he said the minister asked him to invite us. He was reminded that he had always been asked by the minister to chair the meeting when there was any problem and he could not proffer any solution.'

The minister, according to Odaah, had insisted that the government would not augment the shortfall from the country's reserves.

Before the current stalemate, augmentation was usually made from the Excess Crude Account whenever there was revenue shortfall.

Odaah said, 'The minister said they could not dip into the reserves, which made us to believe that the Nigerian National Petroleum Corporation had brought in something. Today, we have come for the second time within the month of September and the FAAC session has been stalemated.

'We were invited by Minister of State for Finance, who is the chairman of FAAC, but we have not seen him. The AGF addressed a few of our executives and told us nothing was available. We appreciate the efforts of the AGF, but the minister has chosen the part of playing levity with our case.'

He said the failure of the committee to allocate statutory revenue for the month of August had begun to take its toll on the states and local governments.

Odaah added, 'We have been slighted and viewed with contempt to the extent that the interest of our states and local governments is suffering. He (Ngama) has treated us with contempt and treated out states and local governments with contempt. One condition we gave was that we should not be re-invited until the situation improved.

'But right now, there is no improvement. We have imperative demands, augmentations and differentials in the benchmark, which we listed. The states rely on the budget in order to secure financial commitment and handle security issues and issues of contractors. We have issues of insecurity, among others. Just clear the backlog and we will get along.'

Reacting to the walkout by the commissioners at Monday's FAAC meeting, the Federal Government said it had made available the sum of N548.393bn as the statutory revenue for the three tiers of government for the month of September.

This, it said, was an improvement over the figure of N497.984bn made available at the August meeting.

The Office of the Accountant-General of the Federation, in a statement issued on Monday night, said efforts were being made to get N75bn from the NNPC to pay the shortfall.

The statement signed by the Deputy Director, Press, OAGF, Mr. Charles Nwodo, read in part, 'The OAGF said FAAC had received assurances from the NNPC that the issue was being dealt with dispatch and that a positive outcome was expected soon. It also said that the government was exploring all avenues to end the shortfalls in revenue caused by oil theft and vandalism as soon as possible.

'It will be recalled that the committee for the mitigation of oil theft headed by the Delta State Governor, Emmanuel Uduaghan, has been working hard on securing key pipelines in a sustainable way as a strategy for fixing the problem of oil theft and vandalism.'

In recent times, there had been persistent decline in gross federally collected revenue accruing to the Federation Account.

The Federal Government had projected a monthly earning of N702.54bn in the 2013 budget, but it only surpassed that target once during the first seven months of this year, earning N651.26bn in January; N571.7bn in February; and N595.71bn in March.

In the months of April, May, June and July, the revenue earned by the country was N621.07bn, N590.77bn, N863.02bn and N497.98bn, respectively.

As a result of the shortfall, Ngama said revenues would from October be shared on the basis of the actual amount earned rather than what was budgeted.