Posted by John Ofikhenua, Abuja on
Federation Accounts Allocation Committee (FAAC) meeting yesterday shared a total of N436.72billion as allocation for the month of October 2008 among the Federal Government, States and Local Government areas in the country.
Federation Accounts Allocation Committee (FAAC) meeting yesterday shared a total of N436.72billion as allocation for the month of October 2008 among the Federal Government, States and Local Government areas in the country.
According to a communiqué signed by the Accountant General of the Federation (AGF) Mr. Ibrahim Dankwambo, the allocation was N3.92billion higher than that of the preceding month, which was N432.80billion, representing 0.9 percent increase.
The total allocation was shared as follows: Federal Government received N188.87billion, State Governments got N95.76billion while the Local Government areas carted home N73.82billion and N45.93 was earmarked for 13 percent derivation, representing 52.68percent, 26.72 percent, 20.60 percent and 13 percent respectively.
The communiqué also stated that there was increase in the total revenue collected for the month due to the leap in the Value Added Tax (VAT) collected in the month under review.
In addition, the Minister of State for Finance, Mr. Remi Babalola noted that FAAC has opened a Gas Revenue Account separate from Oil Revenue Account as directed by the Supreme Court.
His words: "Following the ruling of the Supreme Court on this matter and in consideration of the decision of FAAC that the Office of the Accountant-General of the Federation and the NNPC open a Gas Revenue Account separate from the Oil Revenue Account, I am pleased to inform FAAC that this has been carried out by the agencies concerned."
He also revealed that there was an augmentation in the month under review.
"There was also augmentation for this month, the total amount augmented was N436.7billion which is a little higher than what was spent in the preceding month. However, the augmentation also went up, we augmented with about N85.7billion compared to the augmentation of N71.8billion at the last month," he said.
He attributed the augmentation to the constraint posed by some of the operations of the Nigerian National Petroleum Corporation (NNPC).
Babalola also disclosed that FAAC deliberated on the international financial system and the Nigerian capital market, adding that it was unanimously agreed that the nation's financial market was still very robust.
While driving home his confidence in the financial system he said: "You just saw the results of some of the banks recently. One of the banks declared almost an about N30billion dividend, that tells you how healthy the banks are".
The minister further stated that the shareholders' fund of two of the banks is about N350billion; an indication of the capital adequacy in the system at about 22 percent.
Besides, FAAC also considered ways of building up high credit rating in the states and scaling them up to a level of business competitive environment.
"We look at the possibility as well of all the states to compete on doing business, what we call the doing business environment, to compete among themselves for any investment whether domestic or foreign that comes into the country. The technique for healthy competition among states to make sure they compete for every dollar," he said.
He claimed that Nigeria's oil production is currently constrained by under-investment. Actual production is down to 2 million barrels per day (mbpd) against a producibility of 3 mbpd and a quota of 2.25 mbpd.
"At the Federal level, we have repeatedly cautioned that as oil resource is a depleting asset, the revenue derived should be transformed into assets that will generate sustainable income. It is this income that may be consumed not the inflows from the oil revenue. "Based on the foregoing, it is my desire to place before this committee for discussion the need to set up a sub-committee on Joint Venture funding with specific terms of reference to advise on how we can use some of the excess over buffer in the excess crude account for investment purposes without contravening the law, " he added
Commenting on power intervention, the minister said states were required to seek the endorsement of their respective Houses of Assembly so as to legally support the utilization of the share of the States and local government councils on the power project funding.
"Thirty-four States have passed the resolution but the Federal Ministry of Finance has as at now been officially notified by only thirty one States up from the eighteen States as at the October meeting."