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Tag: FAAC

  • Delta State Govt denies wrong doing with 13% derivation funds

    Delta State Govt denies wrong doing with 13% derivation funds

    Officials of the Delta State Government have denied any wrongdoing in handling 13% derivation funds accrued to the State.

    On Monday, Delta Commissioner for Finance, Chief Fidelis Tilije disclosed that the state’s total debt profile currently stands at N272 billion.

    Tilije, who disclosed this at a news conference in Asaba, said that the N240 billion refunds from the Federation Accounts Allocation Committee (FAAC), was not a loan but the state’s share of 13 per cent crude oil derivation arrears from 2004 till date.

    The commissioner, in the company of Mr Olisa Ifeajika, Chief Press Secretary to Gov. Ifeanyi Okowa, noted that the state government could offset its current debt if it discounted 100 per cent of its share of N240 billion refund approved by the Federal Government.

    “The total debt profile of Delta state as we speak is N272 billion out of this, N84 billion is due to contractors and  pension  arrears is about N27 billion.

    “The rest are the debt profile,  most of that were actually inherited by the Gov. Ifeanyi Okowa led administration.

    “And in this past months, we have a total expected refund of N240 billion with respect to the 13 per cent oil derivation refunds to nine states that is ongoing.

    “We had initially wanted to phase out  many legacy projects that we wanted to complete, we approached the State House of Assembly and got approval to discount N150 billion which we pruned to N100 billion as bridging finance facility from the N240 billion.

    ”I did say recently that out of this N240  billion that is expected from FAAC receipts, Delta has received N14.7 billion in three quarterly instalments.

    “And out of this N100 billion bridging finance, we have accessed N30 billion from the commercial market,” Tilije said.

    He said that with the totality of the refunds expected from FAAC, the state could clean up the outstanding debt profile if it fully discounted the N240 billion.

    The commissioner explained that the governor, being a prudent manager of human and resources, felt that it would be necessary not to allow a repeat of the experience he had as new government in 2015.

    “At inception in 2015, Gov. Okowa’s  administration saw hell managing the lean resources available to the state as a new government.

    “This informed why all the state governments had to take a bailout fund from the Federal Government in 2015.

    “The truth is that if the state government has totally taken or fully discounted the N240 billion FAAC refund, the next successive government will fall back to the experience Gov. Okowa had in 2015.

    “So, unlike the other oil producing  states, who fully discounted their refunds, Okowa decided to be his brother’s keeper, take a percentage of the N240 billion and leave the rest for the incoming government to access over a period of four years.

    “Besides, if we had gone ahead to discount the N240 billion in full, we would have been able to clean up all our  outstanding debt,” the commissioner said.

    Tiliji noted that every government financed its budgets from FAAC receipts, Internally Generated Revenue (IGR),  borrowings and sundry facilities and tasked the social media to always report facts.

    On his part, Ifeajika  said that the government was transparent and had nothing to hide.

    According to him, the state government is conscious of the rule of law which informed why it approached the State House of Assembly for approval to access the bridging finance facility from the commercial market.

    “In Delta, we are transparent, we have nothing to hide. The governor has assured that all the legacy projects will be completed before the end of his administration.”

  • FG, States, LGCs share N954.085 billion in July

    FG, States, LGCs share N954.085 billion in July

    The Federation Account Allocation Committee (FAAC), has shared N954.085 billion to the three tiers of government, as federation allocation for July.

    This is according to a statement signed by Mr Phil Abiamuwe-Mowete, the Director (Information/Press) on Wednesday in Abuja.

    From the amount, the Federal Government received N406.610 billion, the states received N281.342 billion, the Local Government Councils got N210.617 billion.

    This was inclusive of Gross Statutory Revenue and Value Added Tax (VAT),

    It said that the oil producing states received N55.515 billion as derivation (13 per cent of Mineral Revenue).

    The statement indicated that the Gross Revenue available from the VAT for July was N177.167 billion which was a decrease distributed in the preceding month.

    “The distribution is as follows; Federal Government got N26.575 billion, the States received N88.584 billion, Local Government Councils got N62.008 billion.

    “Accordingly,  the Gross Statutory Revenue of N776.918 billion distributed was higher than the sum received in the previous month.

    “From which the Federal Government was allocated the sum of N380.035 billion, States got N192.759 billion, LGCs got N148.609 billion, and Oil Derivation (13 per cent  Mineral Revenue) got N55.515 billion.”

    The statement also said that Companies Income Tax (CIT) and Petroleum Profit Tax (PPT), Excise Duties and Oil and Gas Royalties recorded significant increases.

    According to the statement, Import Duty and VAT, however, decreased considerably.

    It said that total revenue distributable for the current month of July was drawn from Statutory Revenue of N776.918 billion.

    The VAT was also N177.167 billion bringing the total distributable amount for the month to N954.085 billion.

    However, the balance in the Excess Crude Account (ECA), as at Aug. 24 stands at 470,599.54 million dollars.

  • $418m Paris Club debt: Court dismisses 36 governors’ suit against FG

    $418m Paris Club debt: Court dismisses 36 governors’ suit against FG

    A Federal High Court, Abuja, on Friday, dismissed the 418 million dollars Paris Club debt suit filed by the 36 state governments against the Federal Government.

    Justice Inyang Ekwo, in a judgement, dismissed the suit for lacking in merit.

    “I do not see any merit in this case on the whole and I hereby dismiss it for lack of merit,” Justice Ekwo said.

    The judge held that the 36 states’ attorneys-general, who instituted the suit had no locus standi to filed the matter.

    The court had, on Nov. 5, 2021, restrained the Federal Government from deducting monies accruing to the 36 states from federation account to settle 418 million dollars judgment debt in relation to Paris Club Refund pending the determination of the substantive suit.

    The court gave the order following an ex-parte motion moved by counsel to the plaintiffs, Jibrin Okutekpa, SAN.

    While the 36 states Attorney-Generals are the plaintiffs on the suit.

    Some of the defendants listed in the suit include the Attorney-General of the Federation (AGF), Accountant General of the Federation and Ministry of Finance.

    Others are Central Bank of Nigeria, Debt Management Office, Federation Account Allocation Committee, Incorporated Trustees of Association of Local Government of Nigeria (ALGON), among others.

    According to the motion dated and filed Oct. 27, 43 defendants are sued in the matter.

    Although four prayers were sought for, Justice Ekwo granted three in the motion ex-parte.

    The reliefs sought by the plaintiffs include an order of interim injunction, restraining the Federal Government from deducting any money accruing or due to all or any of the 36 states of the federation.

    The senior lawyer, who informed the court that the Federal Government had not commenced the deduction of the monies, withdrew the fourth prayer, asking for a refund of the monies deducted.

    He hinted that the deduction was expected to begin in November, 2021.

    He said in spite of his clients’ protest against such action, the defendants had vowed to go-ahead with the deduction.

    He said if allowed, no state would be able to pay workers’ salaries.

    Besides, Okutekpa argued that the states were not party to any contract resulting in such debts.

    “That is why we ran to your court,” he said.

  • Governors decry NNPC zero contribution to federation account

    Governors decry NNPC zero contribution to federation account

    The Nigeria Governors Forum (NGF) has decried the zero contribution of the Nigerian National Petroleum Company (NNPC) Ltd. to the Federation Account in recent months.

    Dr Kayode Fayemi, Chairman, NGF and Ekiti State Governor, made this known at the Governors’ Forum on Natural Energy, Oil and Gas at the fifth Nigeria International Energy Summit (NIES) on Thursday in Abuja.

    Fayemi said: “The NNPC contributed zero to the federation account last month. This is not the first time.

    “Of course, we know why; though the price of crude oil is going to about 110 dollars per barrel at the international market.

    “The more it goes up, it seems like the more we suffer.”

    He noted that it was ironic that the NNPc was declaring profit and unable to meet its obligations to the Federation Account Allocation Committee (FAAC).

    Fayemi said the governors were concerned about how to grow the industry, stressing that transparency, accountability and governance were critical in achieving this objective.

    He noted that the Petroleum Industry Act was responding to some of the challenges facing the sector though the governors had raised concerns regarding some of the provisions of the Act.

    The NGF chairman also faulted the oil and gas sector being on the Exclusive Legislative List of the Federal Government.

    Fayemi explained that when he was the Minister of Mines and Steel Development, he reviewed the Act regulating the sector to allow more states and local governments participation.

    He added that Nigeria should begin to harness its abundant gas resources as the world push for transition to cleaner sources of energy.

    Also, Ondo State Governor, Mr Rotimi Akeredolu, said the country needs to end the petrol subsidy regime now because it was not sustainable.

    Akeredolu, represented by the State Commissioner for Energy and Mines, Mr Rasaq Obe, also called for increased crude oil production to about two million barrels per day to improve the revenue from the sector.

  • How FG, States, LGCs shared N699.8 bn FAAC allocation for December 2021

    How FG, States, LGCs shared N699.8 bn FAAC allocation for December 2021

    The Federal Government, States and Local Government Councils (LGCs), on Friday, shared N699.824 billion as federation allocation for Dec. 2021.

    A statement issued by Mr Oshundun Olajide, Acting Director, Information, Ministry of Finance, Budget and National Planning, said that the amount was shared at the Federation Accounts Allocation Committee (FAAC).

    According to it, the virtual conference was chaired by the Permanent Secretary, Mr Aliyu Ahmed.

    “From this amount, inclusive of cost of collection to Nigeria Customs Service (NCS), NUPRC and Federal Inland Revenue Service (FIRS), the Federal Government received N279.457 billion, the States N210.046 billion, while LGCs got N155.456 billion.

    “Meanwhile, the oil-producing states received N49.003 billion as derivation (13 per cent of Mineral Revenue).”

    The statement said that the communiqué issued by FAAC at the end of the meeting, indicated that the gross revenue available from Value Added Tax (VAT) for Dec. 2021 was N201.255 billion as against N196.175 billion distributed in November.

    This, it said, resulted in an increase of N5.080 billion.

    Of the VAT, Federal Government got N28.111 billion, States N93.705 billion and LGCs N65.593billion.

    “The gross statutory revenue of N560.066 billion received for the month was lower than the N643.481 billion received in the previous month by N83.415 billion.

    “From this, the Federal Government received N248.885 billon, States N126.238 billion, LGCs N97.324 billion and derivation (13 per cent mineral revenue) got N34.820 billion.”

    It said that the communiqué also revealed that Companies Income Tax (CIT) and VAT increased reasonably.

    It added that Petroleum Profit Tax (PPT) and oil and gas royalties decreased significantly while import and excise duties decreased marginally.

    “The distributable statutory revenue of N507.267 billion, VAT of N187.409 billion, Exchange Gain of N5.148 billion, brings the total distributable revenue for the month to N699.824 billion.”

  • JUST IN: NNPC confirms zero FAAC remittance projection for May, disagrees corporation is broke

    JUST IN: NNPC confirms zero FAAC remittance projection for May, disagrees corporation is broke

    Nigerian National Petroleum Corporation (NNPC) said the zero revenue remittance projection in its letter to the Accountant General of the Federation(AGF) pertains only to the revenue stream it manages for the country.

    It said the letter was not a reflection of the overall financial performance of the Corporation.

    Dr. Kennie Obateru, the Corporation’s spokesman, said the clarification became necessary in the light of media reports insinuating that the Corporation was in financial straits.

    Obateru said the NNPC is conscious of its role and was doing everything possible to shore up revenues and support the Federation at all times.

    “The shortfall will be remedied by the Corporation as it relates only to the Federation revenue stream being managed by the NNPC and does not reflect the overall financial performance of the Corporation.

    “The NNPC remains in positive financial trajectory for the period in question,” Obateru stated.

    The Corporation pledged to continue to pursue and observe its cost optimization process with a view to maximizing remittances to the Federation Account.

    NNPC, in a letter to the Accountant General of the Federation projected that it would deduct N112 billion from Oil and Gas proceeds for the month of April 2021 to ensure continuous supply of petroleum products to the country and guarantee energy security.

    The letter bore the title: Re: Impact of Hike in Crude Oil Prices on the Deregulated Downstream Sector: Projected Remittance to the Federation Account for April to June 2021.

    NNPC said the letter was inappropriately shared by unscrupulous persons, fuelling reports of impending revenue shortfalls with dire consequences for the various tiers of government.

    NNPC, however, assured that it would continue to meet its financial obligations to the Federation.

  • More woes for Nigeria as NNPC projects zero remittance for May

    More woes for Nigeria as NNPC projects zero remittance for May

    Nigeria may face more dire times following the projection of a deflated revenue for the three tiers of government, federal, states and local governments as the Nigerian National Petroleum Corporation (NNPC) battles to cover for subsidy on petrol while it has warned monthly remittance to the federation accounts allocation committee (FAAC) for May will be zero.

    Katsina State Governor Aminu Bello Masari has warned that the insecurity in the country may be escalated if the Federation Account Allocation Committee fails to share allocations to state and local governments in May.

    In a letter by the corporation to the Accountant-General of the Federation (AGF), Mr. Ahmed Idris,

    NNPC said it posted a value shortfall of N111.966 billion in February 2021, which will ultimately impact on its ability to contribute to the joint account shared by the federal, state and local governments.

    A copy of the letter, signed by the corporation’s Chief Financial Officer, Mr. Umar Ajiya, and dated April 26, 2021, was obtained and quoted in several media outlet.

    The minister of finance, budget, and national planning; the director-general, Nigeria Governors’ Forum; the director, home finance; and the chairman, Commissioners of Finance Forum were copied.

    Also, Katsina State Governor Aminu Bello Masari spoke to newsmen in Abuja on the danger of the projected zero allocation to FAAC from NNPC; similarly, an ex-lawmaer Dino Melaye also warned on the consequences of the subject matter in a video posted on his social media handles .

    “Without resources, again, it’s another factor that affects security, you cannot create jobs for the teeming unemployed youths in the rural communities…It’s with resources state governments and local governments we’ll be able to contain some of these restive youths so that they can be used for better purposes because most of them might be foot soldiers to the bandits.” MASARI

    Implication of Zero from NNPC:

    The implication is that the zero remittance from the NNPC may affect the monthly allocation to states, which may ultimately struggle to meet their statutory obligations, including payment of salaries and pensions.
    The NNPC, in the letter, attributed the N111.966 billion shortfall to the rising average landing cost of petrol, which jumped to N184 per litre in March as opposed to the existing N128 ex-coastal price.

    According to the corporation, the N111.966 billion incurred as landing costs would be deducted from April oil and gas proceeds due to the federation in May.

    It stated: “Further to our previous correspondences on the above subject, we wish to advise on the projected remittance to the Federation Account for the months of April (May FAAC) to June 2021 (July 2021 FAAC).

    “The accountant-general of the federation is kindly invited to note that the average landing cost of petrol for the month of March 2021 was N184 per litre as against the subsisting ex-coastal price of N128 per litre, which has remained constant notwithstanding the changes in the macroeconomics variables affecting petroleum products pricing.

    “As the discussions between government and the labour are yet to be concluded, NNPC recorded a value shortfall of N111, 966, 456, 903.74 in February 2021 as a result of the difference highlighted above.”

    The corporation said a projection of remittance to the Federation Account for the next three months had been sent to the Office of the Accountant-General.

    It added: “Accordingly, the AGF is invited to note that the sum of N111,966,456,903.74 will be deducted from April 2021 oil and gas proceeds due to the federation in May 2021, which will translate to zero remittance to the Federation Account from NNPC in the month of May 2021.”

    The corporation stated that the move was to ensure the continuous supply of petroleum products to the nation and the guarantee of energy security in the country.

    Group Managing Director of the NNPC, Mallam Mele Kyari, had earlier raised the alarm over the rising landing cost of the product, saying that the NNPC could not continue in that trajectory.

    Masari: Zero Allocation May Escalate Insecurity Nationwide- Masari

    Katsina State Governor Aminu Bello Masari has warned that the insecurity in the country may be escalated if the Federation Account Allocation Committee fails to share allocations to state and local governments in May.Masari, who addressed State House reporters in Abuja yesterday after meeting with the Chief of Staff to President Muhammadu Buhari, Prof. Ibrahim Gambari, was responding to the alarm by the Nigerian National Petroleum Corporation that states might get less from the Federation Account next month owing to the huge petrol subsidy payment.

    Masara said inability of states and local councils to fund responsibilities might escalate the security crisis in the country.

    He said: “Without resources, again, it’s another factor that affects security, you cannot create jobs for the teeming unemployed youths in the rural communities…It’s with resources state governments and local governments we’ll be able to contain some of these restive youths so that they can be used for better purposes because most of them might be foot soldiers to the bandits.”

    He said the security situation in Katsina was still of high concern, but added that his administration was doing everything to control it.

    Masara also said a declaration of state of emergency on security could not solve the current insecurity the country.

    He noted that the military personnel that would be used to execute such emergency situation were already overstretched.

    He appealed to Nigerians to stop politicizing security issues, saying policing the nation at this critical time was everybody’s business.

    He said Nigeria must not be allowed to disintegrate as such would mean a major crisis for the entire African continent.

  • Obaseki’s claim of FG printing N60bn to augment March FAAC false – NEC

    Obaseki’s claim of FG printing N60bn to augment March FAAC false – NEC

    The National Economic Council (NEC) has dismissed claims that N60 billion was printed to augment the Federation Account Allocation Committee (FAAC) for March.

    Mr Laolu Akande, Senior Special Assistant to the President on Media and Publicity, Office of the Vice President, briefed State House correspondents after virtual NEC meeting presided over by Vice President Yemi Osinbajo on Thursday at the Presidential Villa.

    TheNewsGuru.com, TNG reports that Governor Godwin Obaseki had recently alleged that the Central Bank of Nigeria (CBN) printed N60 billion in March to support federal allocation to states.

    “Finally, council also affirmed that there was no N60 billion CBN money printed for March FACC; having heard presentations from the controversy generated regarding insinuations of alleged printing of N60 billion to augment March allocations.

    “The council affirmed that there is no truth whatsoever in the claim; the meeting reviewed the controversy and heard from the Finance Minister and the Nigeria Governors Forum (NGF) as represented by Etiki State governor and the CBN governor.

    “Both the minister and the CBN governor stated categorically to the council that the allegation of printing of money to augment allocation is outrightly false.

    “The NGF also supported the conclusion and NEC affirmed same as the highest constitutional body tasked with economic affairs in the country,’’ Akande said.

  • FAAC: FG, States, LGs share N601.12bn in November

    FAAC: FG, States, LGs share N601.12bn in November

    The Federation Accounts Allocation Committee (FAAC) shared a total of N601.110 billion to the three tiers of government in November 2020.

    This was announced by the Permanent Secretary, Federal Ministry of Finance, Aliyu Ahmed, after the Federation Account Allocation Committee (FAAC) meeting on Wednesday in Abuja.

    The total distributable revenue of N601.110 billion comprised statutory revenue of N436.457 billion; Value Added Tax (VAT) revenue of N156.786 billion and augmentation of N7.867 billion from the Forex Equalisation revenue.

    The gross statutory revenue of N436.457 billion available for the month of November 2020 was higher than the N378.148 billion received in the previous month by N58.309 billion.

    The gross revenue of N156.786 billion available from the Value Added Tax (VAT) was also higher than the N126.463 billion available in the previous month by N30.323 billion.

    A breakdown showed that the federal government received N215.600 billion, the State governments got N171.167 billion and the local government councils received N126.789 billion.

    The oil producing states received N31.392 billion as 13 per cent mineral revenue, while cost of collection, transfers and refunds had allocation of N56.162 billion.

    The federal government received N190.122 billion from the gross statutory revenue of N436.457 billion; the state governments received N96.433 billion and the local government councils received N74.345 billion. N30.370 billion was given to the relevant states as 13 per cent mineral revenue and N45.187 billion was the total for cost of collection, transfers and refunds.

    The federal government received N21.872 billion from the Value Added Tax (VAT) revenue of N156.786 billion. The state governments received N72.906 billion; the local government councils received N51.034 billion, while cost of collection, transfers and refunds had allocation of N10.975 billion.

    From the N7.867 billion augmentation from the Forex Equalisation revenue, the federal government received N3.606 billion, the state governments received N1.829 billion, the local government councils received N1.410 billion and the relevant states received N1.022 billion as 13 per cent mineral revenue.