Hopes of a rebound by states having difficulties in paying the salaries of its workers have again been dashed as the federation account allocation committee (FAAC) meeting for the month of March turned out the worst allocation in over 5 years with a drop of N39.0 billion from the N338.8 billion that was shared in February. This was on the same day the 66th National Economic Council (NEC) presided over by the Vice-president, Prof. Yemi Osinbajo and attended by governors and selected stakeholders held its meeting at the State House, Abuja.
Benue state Deputy Governor, Engr. Benson Abounu attended the NEC meeting in the place of Governor Samuel Ortom who is away in China on a business mission.
The states however got a little reprieve as the NEC decided to stop the obligatory deductions from states’ Federation Account allocations for the month of March on their restructured loans so as to allow them pay their workers’ salaries. 27 states, among them Benue are currently having challenges in meeting their obligations to workers.
Finance Minister, Kemi Adeosun told journalists at the end of the NEC meeting that the decision to stop the deductions was informed by the fact that states do not have enough resources to meet their obligations.
She said low receipts from crude oil sales mean that there is insufficient revenue to share, thereby making it harder for states to survive. Consequently, she approached Mr. President at the behest of the state governors and got his approval to defer the loanpayment for the month of March.
This, she said is to support the states through this difficult period to enable them meet their salary obligations.
States have also been asked to submit financial data that would help the federal government work out how much support in terms of loan deferral to give to each state to get through this period till the economy begins to recover.
“The current situation in the economy requires some action and what we need to do is to understand the financial profile of states in detail, so that we can understand how long we need to support them with loan deferrals.”
“We have prioritized getting the states back into good financial health. Now, part of that is this commitment to fiscal sustainability and that is why we have asked the states to commit to cleansing their payrolls, commit to efficiency, and maximizing their internally generated revenue.
At the FAAC meeting, Adeosun, who was represented by Mr. Mahmoud Isa-Dutse, the permanent secretary in her ministry told state commissioners for finance that the total revenue distributable for the month of March, including VAT of N64.2 billion is N299.7 billion
Of this amount, the federal government got N109.1 billion, representing 52.68 per cent, the states got N55.3 billion, representing 26.72 per cent while the local governments received N42.7 billion, amounting to 20.60 per cent.
She disclosed that N19.75 billion, representing 13 per cent derivation revenue was shared among the oil producing states.
Adeosun pointed out that acts of vandalism on oil pipelines, among other factors, continued to negatively impact on oil revenue generation.
Relatedly, a meeting of the Nigeria Governors’ Forum held on Wednesday to discuss the state of the nation’s economy ended in a deadlock.
Held inside the old Banquet Hall of the Presidential Villa, Abuja, the meeting ran late into the night.
Zamfara State Governor and chairman of the Forum, Alhaji AbdulazeezYari, told State House correspondents at about midnight that the meeting did not reach any conclusion on the discussions on the economy. He said that the forum will reconvene next Thursday to continue further discussion.
Engr. Benson Abounu attended the four-hour meeting alongside governors of Kaduna, Nasarawa, Rivers, Osun,Ondo, Cross River, Delta, Sokoto, Kwara, Ebonyi, Edo, and the deputy governors of Anambra, Ogun and Oyo states among others.
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FEDERATION ALLOCATION DROPS AGAIN AS NEC CONCLUDES MEETING
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