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FAAC Meeting Ends in Deadlock Over NNPC’s N37bn Underpayment

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  • FAAC Meeting Ends in Deadlock Over NNPC’s N37bn Underpayment

The Federation Accounts Allocation Committee meeting, which was convened on Tuesday to consider and approve the statutory allocation for February, ended in deadlock.

The committee could not approve the allocation to the three tiers of government owing to what was described as discrepancies in revenue figures presented to the committee by the Nigerian National Petroleum Corporation.

The meeting, which is convened to consider and approve revenues into the Federation Account and allocation to the three tiers of government, is usually presided over by the Minister of Finance, Mrs. Kemi Adeosun.

Other members of the committee are the Accountant-General of the Federation, Alhaji Ahmed Idris; commissioners for finance from the 36 states; representatives of revenue- generating agencies such as the Federal Inland Revenue Service, the Nigeria Customs Service and the NNPC, among others.

Idris confirmed the inconclusiveness of the meeting during a media briefing shortly after the gathering, which was held at the headquarters of the Ministry of Finance.

He said the committee came to the decision to postpone the meeting after discovering that the revenue remitted by the NNPC into the Federation Account was understated.

Idris stated that following various submissions made at the meeting by the members of FAAC, it was decided that there was a need to postpone the meeting pending the reconciliation of the revenue figure.

He said, “Let me be quick to tell you that the meeting was inconclusive because issues around reconciliation of figures are on the table.

“Obviously, you are all aware that anything that has to do with the federation revenue is statutory and therefore constitutional. And we must always verify our figures to the last kobo, failing which we will be committing illegality and unconstitutionality.

“It is on that note that we observed some issues in the figures given by one of the major revenue-generating agencies, namely the NNPC. And the committee is of the opinion that until and unless these figures are reconciled, corrected, verified and are factual, we cannot distribute the revenue as the case is.”

He added that the revenue would not be distributed until all outstanding issues were resolved.

The AGF said that while the government was committed to meeting its obligations to the people, such must be done in line with constitutional requirements.

He stated, “Let me be quick to inform Nigerians that we are sensitive to the issues but again, we have to follow the constitution and the necessary laws for the distribution of revenue and it is on this note that I inform you that the meeting has not been concluded.

“We will look at the revenue figures as submitted by the NNPC and reconcile such figures, and upon the conclusion of the reconciliation of that figure, we will share the revenue accordingly.

“We have to explain this to Nigerians, bearing in mind that as civil servants, workers in the federal, state and local governments deserve to have their salaries and all other commitments of the government.”

When asked how much the under-remittance was by the NNPC, the AGF failed to provide the amount, but added that the committee would investigate and determine the figure.

He added, “It’s not about the quantum of amount that is being distributed; it’s about reconciliation. In finance and accounting, when you hear reconciliation, it means figures don’t tally as presented by different sections and once figures do not agree, they must be made to agree.

“Unless we get to the bottom of it, have clarity and some level of certainty, we remain where we are.”

When asked when the meeting would be reconvened, he said, “As soon as possible; as we leave here, we are going to embark on the exercise because we feel time is of the essence. We must meet our responsibilities to the Nigerian workers.”

The Chairman, Forum of FAAC Commissioners, Mahmoud Yunusa, who spoke in an interview with our correspondent after the meeting, said that the amount in contention was about N100bn.

He said, “We started this meeting last week and the NNPC did not submit their figures until yesterday (Monday), which we were not able to review until this morning.

“This morning when we were reviewing the figures as presented by the NNPC, it came as a great surprise to see that the amount was less than N100bn. So, we decided that we will not accept the figure presented, that we will contest it.

“And we are contesting the figure because pipeline vandalism has reduced, while crude oil prices have continued to go up. So, we are wondering why the nation cannot raise enough money through that sector to share to states so that everyone can pay workers, contractors and so on.”

Yunusa added that the inability to approve the revenue for the month of February on time might affect the payment of workers’ salaries before Easter.

Investigations by our correspondent revealed that the amount remitted by the NNPC into the Federation Account for February was N74.06bn.

This, according to documents made available to the committee, is N37.76bn lower than the N111.83bn remitted in the previous month.

The document, which was obtained by our correspondent read, “A total sum of N74,067,185,437.92 was collected in the month of February, 2018, this shows a negative variance of N1,939,889,304.24 or 2.55 per cent below the approved monthly budget for 2017.

“Compared to the collection of N111,835,458,519.12 in January, 2018, this sum (N74,067,185,437.92), the February collection was lower by N37,769,273,081.20 or 33 per cent.

“We were unable to meet the approved budget as a result of low collection from concession rentals and PSC (Product Sharing Contract) and royalty.”

Meanwhile, Adeosun has reconvened the meeting of FAAC for today (Wednesday).

The meeting, according to a statement by her Media Adviser, Oluyinka Akintunde, on Tuesday night, is expected to hold at 9am at the headquarters of the finance ministry.

Akintunde said the minister had also called for an emergency meeting next week with the Group Managing Director of the NNPC, Dr. Maikanti Baru, and key management of the corporation over revenue payment into the Federation Account.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Nigeria’s Real Estate Sector Shrinks by 8.06% in the Third Quarter -NBS

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Economic uncertainty plunged Nigeria’s real estate sector by 8.06 percent in the third quarter of the year, according to the National Bureau of Statistics (NBS).

Nigeria’s statistics office said “In nominal terms, real estate services recorded a growth rate of –8.06 per cent in the third quarter of 2020, indicating a decline of –11.78 per cent points compared to the growth rate at the same period in 2019, and by 9.12 per cent points when compared to the preceding quarter.

“Quarter-on-quarter, the sector growth rate was 18.92 per cent.

“Real GDP growth recorded in the sector in Q3 2020 stood at -13.40 per cent, lower than the growth recorded in third quarter of 2019 by –11.09 per cent points, but higher relative to Q2 2020 by 8.59 per cent points.

“Quarter-on-quarter, the sector grew by 17.15 per cent in the third quarter of 2020.

“It contributed 5.58 per cent to real GDP in Q3, 2020, lower than the 6.21 per cent it recorded in the corresponding quarter of 2019.”

Nigeria’s economy contracted by 2.48 percent in the first nine months following a 6.10 percent and 3.62 percent contraction in the second and third quarters respectively.

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Economy

Nigeria Requires N400 Billion Annually to Maintain Federal Roads -Senator Bassey

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The Chairman of the Senate Committee on road maintenance, Senator Gersome Bassey, on Friday said Nigeria requires about N400 billion annually to maintain federal roads across the country.

The Senator, therefore, described the N38 billion budgeted for road repairs in the 2021 proposed Budget as grossly inadequate. According to him, nothing meaningful could be achieved by the Federal Roads Maintenance Agency (FERMA) with such an amount.

He said, “For the 35 kilometres federal roads in the country to be motorable at all times, the sum of N400bn is required on yearly basis for maintenance.”

Bassey “What the committee submitted to the Appropriation Committee in the 2021 fiscal year is the N38bn proposed for it by the executive which cannot cover up to one quarter of the entire length of deplorable roads in the country.

“Unfortunately, despite having the power of appropriation, we cannot as a committee jerk up the sum since we are not in a position to carry out the estimation of work to be done on each of the specific portion of the road.

“Doing that without proposals to that effect from the executive, may lead to project insertion or padding as often alleged in the media.”

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Economy

Scarcity of Day-Old-Chicks Cripple Poultry Farmers in Akwa Ibom

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Despite billions of Naira spent on Akwa Prime Hatchery and Poultry Limited by the Executive Governor of Akwa Ibom State, Udom Emmanuel, poultry farmers in the state said they had to order day-old-chicks from outside the state as the 200,000 capacity poultry farm developed specifically to make day-old-chicks and other poultry products available at affordable prices is almost empty at the moment.

The farmers expressed frustration over many challenges they face in the course of bringing day-old-chicks from outside the state. Usually, Ibadan, Enugu and sometimes as far as Kaduna, while the hatchery built and inaugurated in 2016 remains idle.

Mr Ekot Akpan, one of the poultry farmers who spoke with the pressmen said the state had not had it this bad.

Akpan said: “For the 12 years that I have been in poultry farming, this is the first time that poultry farmers have been so harshly affected by both economic and non-economic factors. And, quite unfortunately, nobody is available to offer any explanation.

“Farmers have been left at the whims and caprice of owners of the means of production.

“There seems to be no government regulation of the poultry industry. How, do you explain a situation where you wake up suddenly and the price of a day old chick is selling for N600, a bag of feed goes as high as N6,000.

“And, in a state that government claims to be pursuing agriculture as one of his cardinal programmes.

“For instance, in 2016, the state government said it has constructed an hatchery, and the intention according the government was to ensure availability of day old chicks at affordable price to farmers, but, quite, unfortunately, that effort has not yielded any tangible result.

“Farmers are still getting their day old chicks from Ibadan, Kaduna, and Enugu. So, the question now is where is the hatchery?

“One would have expected that farmers would be buying old chicks at humane prices, but, from all indications they acclaimed hatchery is a ruse. So, which one is the Akwa Prime Hatchery producing,” he said.

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