FG Committed To Federation Account's Transparency â€“ Babalola
ABUJA, June 13, (THEWILL) - Minister of State for Finance, Mr. Remi Babalola, disclosed today that the Federal Government remains resolute in its commitment towards a transparent and accountable Federation Account.
The minister stated this while responding to enquiries by some journalists at the Nnamdi Azikiwe International Airport, Abuja.
The Federation Account is made up of all federally collected revenues including receipts from oil and gas sales locally and internationally, royalties and Value Added Tax (VAT), among others. The revenues from the Federation Account are distributed monthly among the three tiers of government by the Federation Account Allocation Committee (FAAC) chaired by Babalola.
He assured that FAAC would continue to adhere strictly to the enabling Act which mandated the Committee to share allocations from the Federation Account to the three tiers of government in line with the extant laws of revenue allocation.
He stated, "Without being immodest, let me reiterate that we have conducted the business of FAAC in a more pragmatic manner than what it used to be in previous years. We have ensured strict adherence to the enabling Act by maintaining openness and fairness in the distraction of the revenue from the Federation Account.
"There is no better way to achieve integrity and accountability within government and government transactions than by promoting transparency and openness. Nigerians must be able to know how the operations of the Federation Account work and have confidence that the authority vested in us has been exercised appropriately."
The FAAC chairman noted that the Federal Government was also commitment in the improvement of available data on Federation Account allocation to all tiers of government in the country.
The FAAC, he revealed, had settled the share of the Paris Club debt exit refund due to the 774 Local Government Councils.
According to the minister, the funds were withheld due to a court injunction.
"However, given a recent judgment by an Abuja High Court on the substantive matter, we have paid all the amounts due to the Local Government Councils as refunds for the Paris Club debt exit in line with the pronouncement of the court of law," he said.
Meanwhile, the Commissioners for Finance and the Accountants-General from the 36 States are expected to arrive Abuja on Monday (June 14) ahead of the FAAC meeting scheduled for Tuesday, June 15.
Also expected at the meeting are the Accountant General of the Federation, Alhaji Ibrahim Dankwambo; Director of Home Finance in the Federal Ministry of Finance, Alhaji Gidado Mohammed; representatives of the Revenue Mobilisation, Allocation and Fiscal Commission, Central Bank of Nigeria, Federal Inland Revenue Service, Nigeria Customs Service, Debt Management Office, National Planning Commission, and the Governors’ Forum, among others.
It will be recalled that the Minister of State for Finance and FAAC Chairman had on May 14 advised against any form of profligacy by all tiers of government to enable them address the various fiscal challenges likely to be faced in the near future.
Babalola, in a speech titled "Between Profligacy and Performance", had noted that the growth of discretionary spending by all tiers of government outpaced the annual growth rate of the overall economy over the past 10 years, with deficits being the expected consequence.
He said, "The production and price assumptions in the 2010 budget leave minimal headroom for adjustment and expose the economy to higher risks of exogenous shocks. It reduces the accretion to our honey pot of Excess Crude account which is already below comfortable cushion.
"If we embark on any form of fiscal profligacy today it will certainly hinder our ability to address the various fiscal challenges we are likely to face in the near future."