The Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, on Monday admitted speculations that Nigeria had gone broke.
She also stated that the country had been going through difficult times and advised states to improve their revenue generation drive.
Ahmed, who stated this in an interview on a daily breakfast show on the Nigerian Television Authority, Good Morning Nigeria, stated that the money shared at the March Federation Account Allocation Committee was short of N50bn…
She stated, “It is a very difficult time. I can explain to you how difficult it is, not just for the Federal Government but also for the states. We see increasing reductions in our FAAC revenues; FAAC revenues are the revenues that we put together every month, that are collected from both oil and non-oil sectors from the collection of the NNPC (Nigerian National Petroleum Corporation) the FIRS (the Federal Inland Revenue Service) and all other revenues collection agencies.
“ So, FAAC reduces and whenever FAAC reduces, it is a very difficult situation and in the past one year, we have tried to fall back on some specific accounts that are meant to be saved; savings that when you have such a situation, you fall back on the resources and augment.
“So, we take funds based on Mr President’s approval either from Excess Crude or Stabilisation Account or in some cases, President approved for us to take funds from LNG (Liquefied Natural Gas) dividends. In the month of March, we had a shortfall of FAAC that was about N50bn; we didn’t have enough accrued in any of those accounts other than some N8.5bn that we took from exchange rate differential account so we added that and we ended up with the FAAC of N605bn.
“An average FAAC that is healthy for us is N650bn, so it means we had a shortfall of about N50bn. The states to be honest wanted us to go and borrow from the central bank to augment FAAC.”
She stated that advice by states was rejected, adding that the three levels of government were asked to manage what was available.
“So, it was very surprising when we had a sitting governor saying that the CBN had printed money for FAAC. That was very unfortunate because it was not true. The FAAC was N60bn, the FAAC information is published so you can see the revenue contributed by each of the agency; that is what we shared.
“The states would have wanted us to borrow and augment but we didn’t do that. And we would make sure we don’t have to do that because it’s time all of us to go back and do more. A lot of states are trying to do that in terms of increasing the performance of their internally generated revenues, but it is difficult to do that at a time when growth is very, very slow.”
“Going forward, what we have been doing in the ministry of finance, budget and national planning is a plan that we have put in place to grow revenues. Our revenues have been growing but because the expenditures have been growing at a pace that is much faster than the revenue growth, the impact is not felt
The minister had last week been embroiled in a face-off with Edo State Governor Godwin Obaseki, over the latter’s claim that the Federal Government printed unbacked N60 billion and distributed to the states to take care of the shortfall in the March 2021 allocation.
Governor of the Central Bank of Nigeria, Godwin Emefiele, had weighed in on the matter, saying that such a practice was acceptable in times of fiscal crisis.