FAAC deadlock: NNPC can’t continue spending public funds without approval

Juliana  Taiwo-Obalonye, Abuja

Governors under the auspices of the Nigerian Governors Forum met, on Wednesday night, in Abuja, to deliberate on the issues that led to deadlock of the last Federation Accounts and Allocation Committee (FAAC) meeting, in Abuja.

They insisted that the deadlock would continue until the Nigerian National Petroleum Corporation (NNPC) remitted what was due the public to government coffers to be shared equally among the three tiers of government.

The NNPC had remitted N147 billion into the Federation Account in May, but the governors faulted that amount, saying it was a far cry from the expected revenue as the said amount does not reflect the current economic realities and prices of oil in the international market.

The governors also queried the amount that the NNPC was claiming to have paid for petroleum subsidies.

The governors said that their final decision on their deliberation would be table at Thursday’s National Economic Council (NEC),  presided over by Vice President Yemi Osinbajo.

The allocations for the months of May and June were yet to be distributed among the three tiers of government following the rejection of the NNPC remittances.

On June 27, when the stakeholders met in Abuja for the sharing of the May accruals into the Federation Account, the meeting ended in a stalemate as the representatives of the 36 states rejected the NNPC remittance.

When the meeting reconvened last week, the state commissioners for finance insisted that a permanent solution must be explored to resolve the recurring issue around NNPC remittances to the Federation Account.

The chairman of the forum and Zamfara state governor, Abdulaziz Yari, while briefing journalists at about midnight said, the governors still disagree with the figures presented by the oil corporation.

“There is a disagreement between the figures presented. I have been on the saddle for seven years and I have been attending NEC for past four months and if I see discrepancies I should be able to tell.”

According to Yari, the agreement NNPC claims to have with state governors to remit a maximum of ₦112 billion per month was done when oil price was $48 barrel per day but now the price $78.

He said, “NNPC said it paid N88 billion for subsidy and in the month of June it said it paid N31 billion but it claimed N57 billion is for payment of subsidy in 2017, that is not acceptable  and we won’t give the approval. You can’t just deep your hand into the public purse  and take the money, you have to seek approval from the NEC or Mr. President.

“And NNPC said they have N15 billion for miscellaneous, N9 billion for pipeline maintenance, N3 billion for crude loss, all those things are not approved by anyone.

“NNPC is owned by the federal, states and local government. The states get 48 per cent while the local government and federal government get 52 per cent. We have to agree whatever we get the federal government is getting 52 percent. We are saying this money should be brought to the public for sharing.”

The governors also met with the Minister of Labour and Productivity, Chris Ngige, to discuss the contentious issue of minimum wage implementation as well as the issue of stamp duties which is currently in court.

The governors are insisting on the staggering of the implementation of the new wage if approved.

The Nigeria Labour Congress is proposing a minimum wage of N65,000 for workers.

The governors noted that they are under immense pressure from Organised Labour to have a decision on workers’ wages.

In the communique later released to the media at about Wednesday midnight, the Forum however decided that its committee which is headed by the governor of Kebbi State with Rivers, Osun, Gombe, Jigawa, Anambra states as member are to make their findings known to the Forum before a collective decision is taken on the minimum wage to workers.

Justifying the Forum’s decision, the governors  argued that in the last seven years, there has not been any increase in the income of the nation and therefore there should be no increase but a decrease if the nation’s purse is to be taken into consideration.

However, it was decided that if there are states that feel adequately buoyant to fulfil the minimum wage requirement, they are free to do so but were also advised to be mindful of the fact that doing so will bring Labour into collision course with governors who are unable to pay.

The Forum was reminded that some governors have resorted to rationalising salaries by paying certain ministries and departments in one month and other ministries and departments in another month, just in order to ensure that they do not renege on their obligations to their workers.

All states were advised to submit a ten year data of their audited accounts to enable the committee determine the strength of each state financially in order for the committee to come up with a realistic figure that could be borne by all states.

The governors also discussed  the update on recovery of stamp duties, a subject of controversy as the states claim that the amount due to states have not been remitted.

The governors had in April set up a three-man committee to investigate the alleged N20 trillion unremitted stamp duty funds to the federation account.

The committee, which is chaired by Ibikunle Amosun, Ogun state governor, has Emmanuel Udom and Abubakar Bello, governors of Akwa Ibom and Niger as members. Their report is still being expected l.

On January 15, 2016, the Central Bank of Nigeria (CBN) had issued circular directing banks to deduct N50 stamp duty on every N1,000 deposit made into current accounts.

In 2017, the Senate alleged that N20 trillion due to be paid into the federation account from stamp duty charges on bank transactions was withheld between 2015 and 2017.

The senate said projections for stamp duty in 2015, 2016 and 2017 revenue frameworks of the nation’s annual budget were put at N8.713 billion, N66.138 billion and N16.96 billion.



  • faac june 2018