FG, states can’t share revenue as cash crunch deepens

IS Nigeria broke? Notwithstanding the vigour with which officials of the Federal Government may respond with a no, they would not have the support of finance commissioners who returned to their states from Abuja Monday empty-handed.
They were in the federal capital to get their statutory revenue allocation from the Federation Account. But a shortfall of N75 billion from the last month’s revenue which could not be remedied by the Nigerian National Petroleum (NNPC) aborted this.
The commissioners and their accountants-general who were gathered for the second time this month to share revenue for September on the instruction of their governors, turned down the N548.393 billion revenue for the month, insisting that NNPC must clear the outstanding N75 billion before they could settle down for the distribution of the current revenue.
This came as the Ministry of Finance Monday announced the payment of N46.971 billion of petroleum subsidy claims to verified oil marketers. This brought the total payments so far in 2013 to N287.351 billion.
The rejection of the N548.393 billion by the states was against an appeal by the Accountant-General of the Federation (AGF), Mr. Jonah Otunla, who presided over the second Federation Accounts Allocation Committee (FAAC) meeting. He had assured that the outstanding N75 billion would be provided by the NNPC soon.
Otunla said the September’s revenue was an improvement on that of August and told the commissioners: “The Office of the Accountant-General of the Federation has received assurances from the NNPC that the issue will be dealt with with dispatch and a positive outcome is expected soon.”
This explanation did not go down well with the commissioners. Their Chairman, Mr. John Odah, expressed disappointment and said the Federal Government was treating the states with contempt.
He told journalists after the botched meeting: “We told them not to invite us until all issues are settled. Today by 8.00 a.m., 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; we are just coming back from him. 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. He could not proffer any solution.
“The minister said they could not dip hands in the reserve which made us to believe that NNPC has brought in something.
“Today, we have come for the second time within the month of September and the FAAC session ended in a stalemate. We were invited by Minister of State for Finance who is the chairman of FAAC but we have not seen him. The AGF had 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 path of treating our case with levity. We have been slighted, to the extent that the interests of our states and local councils are suffering. He has treated us with contempt and treated our states and local councils with contempt. One condition we gave was that we should not be invited again until the situation improves. But right now, there is no improvement. We have demands, augmentations and differentials in benchmark which we listed.
“We agreed that there would be no further augmentation in order to clear the backlog. But up till now, no augmentation, no clearing of the backlog. The worst effect of this is that it is having a retrospective effect on the states and local councils. The states rely on the budget in order to secure financial commitment and handle security issues and issues of contractors. Just clear the backlog and we get along. But today, nothing. It is the reason the commissioners of finance, accountant-generals with directive of the governors cannot review our positions. To have called us without any improvement on our demands is a great slight and has shown that the minister does not brief the President. We know the President as a good leader with listening ears who would have attended to this problem immediately if he was aware, but it is like Ngama goes to tell him he will control us. We do not support this situation. The minster should be competent enough and show that level of competency. The minister is running FAAC as his own show; FAAC is degenerating into a different thing.
“It is like the states are being starved by the minster,… handle the dog with great starvation and whichever way you want him to turn he will turn. We are not dogs; we respect the President and are calling on him to hear this.”
Meanwhile, the Federal Government reduced public spending on oil subsidy payments from N2.2 trillion in 2012 to N971 billion . This represents a reduction of over N1.2 trillion or 56 per cent.
Speaking on the issue, the Co-ordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, recalled the background to the issue which generated immense public concern.
“In 2011, there was a huge public outcry. As a result, this administration has worked hard to clean up the process of subsidy payments. In response the ministry set up the Aig-Imoukhuede committee which investigated the subsidy payments. The committee was later elevated to a presidential committee by the President.
“We also hired new auditors and we put in place different checks and balances. As a result, last year, we brought subsidy payment down to about N950 billion, and we expect that this year, we will pay about N971 billion.
“I believe this is a huge achievement for which the Jonathan administration deserves some credit, something that should make Nigerians proud of their government.”