Fashola: Revenue Shortfall Halted FAAC Meeting

Gboyega Akinsanmi

The monthly meeting of Federal Allocation Accounts Committee (FAAC), which was scheduled to hold in Enugu State Thursday, was abruptly deferred due to insufficient funds available in the Federation Accounts.

The Lagos State Governor, Mr. Babatunde Fashola, disclosed this at the World Food Day and agriculture value chain empowerment held at the Johnson Agiri Agricultural Complex at Agege, Lagos.
The agriculture value chain programme was designed to empower 3,000 farmers, who were given training on how to utilise the farming equipment distributed to them by the Lagos State Government.

The programme, aimed at increasing the state food production to 25 percent, attracted some members of the State Executive Council (SEC) and farmers from 20 local government areas and 37 local council development areas of the state.

Speaking at the forum, Fashola lamented the deferment of the FAAC meeting, which he said was unnecessary if Nigeria’s revenue allocation regime was not structured around oil rents, royalties and sales.

The governor explained that he received a message on his way “to the programme that the monthly FAAC meeting, where states know how much the country earn in the last 30 days, has been deferred.”

Fashola said the FAAC meeting was deferred because there was no enough money in the federation account, noting that the fund “is distributed among the three tiers of government-federal, state and local governments.

“The meeting which was scheduled to hold in Enugu State yesterday was postponed because there was no enough money in the Federation Account. That is where the domestic economy of Nigeria is today.

“That was the reason I said there was no government that can function effectively without well structured tax system. So, if we are to wait for the monthly federal allocation, we will not be able to provide the dividends of democracy to the residents of Lagos State.”

THISDAY investigation showed that the meeting was halted even after all Commissioners for Finance from the 36 states of the federation had arrived Enugu. But the commissioners had to attend an economic summit, which the Minister for Finance, Dr. Ngozi Okonjo-Iweala, also attended

An impeccable source at the FAAC confirmed that the meeting could not hold due to what Fashola ascribed to inadequate funding. The source said there was about N400 billion available for sharing for September.

The source further explained that what was available was a far cry from the budget benchmark, which was pegged at a little above N600 billion monthly, noting that the shortfall compelled the FAAC to defer its meeting to next week.

The source said the Department of Petroleum Resources (DPR) “can only rake in N59 billion. It was the lowest the DPR generated in the last two years. Other revenue generating agencies have not been able to meet up.

“The Nigeria Customs Service (NSC) rarely meets its target monthly due to high rate of smuggling. The federal government does not really access the Excess Crude Account (ECA) to make up for the shortfall.

“The federal government’s decision not to make up for the shortfall from the ECA is due to the historic decline of oil price at the international market. There is an impelling need to keep the ECA funds for the purpose of contingency.”

But Fashola explained that it was through the money the state government realised from taxes that it used “to provide the empowerment materials for the residents of the state.
This empowerment is to ensure that persons who were unemployed can begin business of their choice.

“At least, 149 persons who were idled before today will set out to work; raising new entrepreneurs is what we do in Lagos. If you want our democracy to be effective in the next coming election, vote and protect your vote. This economy must remain inclusive so that our democracy will continue to improve.

“We do not measure the economic progress in our state by the number of billionaires and owners of private jets which exclude many in the country, but we measure ours by the number of ordinary people in the society

“These are people who produce small products, render services that give them honest income and puts food on their table. With all these, we are raising new entrepreneurs and tackling unemployment in the state.”