The three tiers of governments, Federal, States and Local Governments at the end of the monthly Federal Account Allocation Committee (FAAC) meeting, have shared a total of N500 billion being the allocation for January.
This is even as the country currently suffering a decline in oil prices which has affected the mineral and non-mineral revenue generation, losing N159 billion.
The Minister of State for Finance, Ambassador Bashir Yuguda made the disclosure when addressing newsmen shortly after the monthly Federal Account Allocation Committee (FAAC) meeting, in Abuja.
Yuguda lamented that the country has suffered substantial loss of revenue due to drop in crude oil prices as well as a 33 per cent decrease in export volume between November and December, 2014 which translated to a loss of $159.88 million.
He equally disclosed that “the shut down and shut-in of trunks and pipe lines at various terminals continued to impact negatively on the revenue performance.” Non-Oil revenues he said performed below the 2014 budgetary provisions.
He linked the fall in non-oil revenues to fall in the price of crude oil in the international market which he said other revenues are tied to. This financial loss he said has resulted in the continued shrinkage of available funds shared by the three tiers of government so much so that the three tiers shared N500.130 billion for the month of January 2015 from the Federation Account.
Despite this loss of revenue, Bashir Yuguda insisted that Nigeria is not broke because the federal government has continued to pay salaries and honour it bond obligations. According to him, “our economy is resilient we are not there yet but the economy is working.”
He also responded to claims that some individuals or the government has deflated this country’s foreign reserve stressing that “nobody has deflated our foreign reserve except when the CBN was defending the Naira.”
He however admitted that state governments were having challenges because of the fall in what is shared every month but he appealed for state governments to embrace the idea of diversifying their revenue bases.
The minister of state for finance disclosed that $2 billion was left in the Excess Crude Account with an additional N19 billion residing in the Domestic Excess Crude Account. With regards to the expected $1.48 billion which the Nigerian National Petroleum Corporation (NNPC) was asked to refund to the federation account, Yuguda said he was in dialogue with the minister of Petroleum and the Managing Director of NNPC to fashion out the modalities of how and when the money will be paid back into the federation account.
The sum of N580 billion was shared for the month of December 2014 indicating that the federal, state and local governments will have financial difficulties to overcome this year.
State governments have threatened not to consider next month’s Federation Account Allocation Committee (FAAC) report if the issue of the $1.48 billion which the Nigerian National Petroleum Corporation (NNPC) is expected to refund to the federation account is not addressed.
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