N950bn FAAC Deductions: FG, States Set For Showdown

By Our Reporter

Abuja (Precise Post) – There is imminent showdown between the Federal Government and the 36 states over the planned deduction of N950bn from the allocation due to the states in 2022.

To this end, it was learnt that the commissioner for finance in all 36 states are expected to meet in the coming days.

President Muhammadu Buhari, on Tuesday, transmitted the 2022 Appropriation Act (Amendment) Bill to the National Assembly, seeking the approval of the federal parliament for a supplementary budget with estimates totalling N150bn.

Buhari also sought approval for another N2.557tn to extend payment for subsidy on petrol.

President of the Senate, Ahmad Lawan; and Speaker of the House of Representatives, Femi Gbajabiamila, read Buhari’s letter dated February 10, 2022, in plenary.

Buhari’s letter read in part, “An additional provision of N2.557tn will be required to fund the petrol subsidy in 2022. Consequently, the Federation Account (main pool) revenue for the three tiers of government is projected to decline by N2tn, while FGN’s share from the account is projected to reduce by N1.05tn.”

This implies that about N950bn would be deducted from the accounts of the states and local governments.

The federal government had proposed an 18-month extension for the implementation of the petroleum industry law to cater for subsidy shortfall.

Subsidy: Buhari is condoning scam in NNPC, says Benue finance commissioner
Speaking with The PUNCH on Tuesday, the Chairman, Forum of Commissioners of Finance and Benue State Finance Commissioner, David Olofu, on Tuesday said that states of the federation will continue to have it tough with the decision to re direct huge amount of money meant for states to subsidy payment.

Olofu who analysed the opaque nature of the NNPC said that the country is in big trouble if Nigerians continue to allow the malpractices going on in the oil sector.

He said that with the manner the oil industry is being run under the present administration it shows that the institution (NNPC) is above the country and more powerful than the government.

Olofu also slammed the National Assembly which he said has constitutional oversight on the NNPC but had remained silent.

“The President is a minister of petroleum and there is nothing happening in the oil industry that he doesn’t have his approval.

“So we expect that he (President) should show some transparency in the operation of NNPC, particularly, the subsidy because he said during his campaign that subsidy in the country is a scam so why will he be president now and condone it?

“There is nothing needed to be said that has not been said either by the government of the day or opposition, it is now a national matter.”

When asked if states are not going to have it tough with the planned deductions from FAAC, the commissioner said, “States have always been having it tough and they will continue to have it tough”.

We will interrogate the deduction at FAAC meeting, it’s against principle of federalism – Ekiti commissioner
To get out of the logjam, Olofu admonished every Nigerian to now showing interest in what is happening in the oil industry, saying, “The National Assembly has oversight function but their silence over this issue is suspect.”

Also speaking with The PUNCH, the Ekiti State Commissioner for Finance, Akin Oyebode, said on Tuesday that the position of any state on whether they agreed to the plan or not was meaningless because the Federal Government had already adopted it on their behalf.

Oyebode, who said the Federal Government did not allow debate on the issue, argued the proper thing was to have allowed debate on it, adding, “We have often said that states should be allowed to debate the merit of the decision or that the Federal Government should simply bear the burden from its own share of revenues.”

The commissioner maintained that a situation where Ekiti State, which consumes less than one per cent of the petrol consumed in the country, pays substantial part of the subsidy payment, goes against the principle of federalism.

“We all read the President’s letter in the media, but we shall be interrogating this at the next FAAC meeting. I personally would like to ask the question in specific details of what this budgetary provision entails. Is it covering the Federal Government’s portion of subsidy payment or all of the payments?

“In the event that it is only covering the Federal Government’s portion of the subsidy payment, where was the decision taken? Should it not be a decision that should be taken at FAAC so that the committee should be asked to deliberate whether or not subsidy payment should be deducted and from FAAC receipts?” he asked.

In a related development, the Enugu State Chapters of Trade Union Congress and Association of Civil Servants have opposed the Federal Government’s plan to re-direct nearly N1tn supplementary budget that ought to go to states through FAAC to petrol subsidy payments.

Leaders of the unions in separate interviews with one of our correspondents warned the All Progressives Congress led Federal Government not to plunge the country into the ditch with such unthinkable thinking of re-directing funds meant for states to pay petrol subsidy which the government had earlier said was a fraud.

The TUC Chairman, Ben Asogwa, said “Our leaders in this country are treating us as though we are fools. Mr President should know that we cannot continue to watch while they plunge Nigeria into the ditch.

“They know where they get the billions and trillions that they embezzle and spend lavishly but when it comes to fuel subsidy, they will remember that there is no money. The Federal Government has allowed the corruption in the oil sector to grow wings and eat into the fabrics of our nation’s economy. Why do they want to rest their inabilities on states?”

On his part, the state chairman of Association of Civil Servants, Chukwuma Igbokwe, said the union doesn’t support anything that would affect state finances which in turn could affect the payment of workers’ salaries and pensions.

Igbokwe added, “It is assumed that if the Federal Government implements that it will likely affect state finances. And so, anything that will affect state finances and in turn affect payment of salaries and pensions in the state is not agreeable to us as a union.

“So we’ll request that the Federal Government and states find a way of adjusting whatever, so that it would not affect payment of salaries and pensions because basically every state now is relying on federal allocation to pay salaries and pensions.”

He noted that it was difficult these days for most states to pay salaries and pensions, adding “If you withdraw N1tn from states allocation to pay subsidy, it will definitely affect our salary and pension. Last Christmas we got our salary very late, almost on December 24, 2021 because the FAAC did not resolve their issue.”

However, the Gombe State Commissioner for Information and Culture Julius Ishaya, urged workers not to be perturbed by the possible withdrawal from federation allocation.

Ishaya said Muhammadu Yahaya has shown capacity to manage resources, adding that deductions wouldn’t affect workers’ salaries.

“His Excellency is a very prudent person. He has proven that overtime, so we will believe in his ingenuity of financial management and we know it is one of the challenges that the governor has capacity to handle,” he said.(Punch

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