Minister of Finance, Mrs Kemi Adeosun, said on Thursday that the stalemate at the Federation Account Allocation Committee (FAAC) meeting would delay the payment of workers’ salaries in states.
Adeosun gave the indication while briefing State House correspondents on the deliberations at the National Economic Council (NEC) meeting presided over by Vice President Yemi Osinbajo.
The minister said that the council was briefed on the FAAC debacle where states resolved to wait until the poor remittance made into the federation account by the Nigerian National Petroleum Corporation (NNPC) was reconciled before they would receive their allocations.
“We operate NNPC as a business, we have invested public capital in that business and we have an expectation of a return. and when that return falls lower than our expectations then the owners of the business, which in this case is the federal government and the states needs to act.
“So, that is really what caused the deadlock yesterday (June 27).
“We really felt that the figures that the NNPC was proposing for FAAC was unacceptable; we felt that some of the costs could not be justified.
“And so we have decided rather than approve the accounts, we would go back and do further work.’’
“Further negotiation and interaction is going on with NNPC as we speak.
“However, we did brief both Mr President and the Vice President on the deadlock and asked for their support and their forbearance because the consequence of this is that salaries might be well delayed in many states as a result of this.
“But we feel that in order to get to the accurate figures that we need we have asked for forbearance and the governors and indeed the federal government are all in agreement that we need to get to the bottom of those figures.’’
The minister added that now that the price of oil is around 76 dollars in the spot market and Bonny light selling for about 78 dollars the government wanted to be putting money away in the Excess Crude Account.
The minister stated that FAAC members were very conscious of the fact that “this period of relatively high oil price might not last we would like to be able to save.
“If we cannot get into the federation account the sorts of revenues we are expecting then we will not be able to save.
“So, it was a very important point really underscored by all the governors and they really want action to be taken.
“And they are fully in support of the position of the ministry of finance and the commissioners of finance not to approve those accounts until we get further explanations on some of the costs that are being presented.’’
Adeosun also said that the balance in the ECA added an additional credit of $80.6 million in May amounting to $1.92 billion as at June 26, stabilisation account balance was N18.89 billion, while the Natural Resources Development Fund had N 133. 72 billion.
She said that NEC also appointed a Committee of four governors comprising Kaduna, Kogi, Ebonyi and Lagos to review the administration and operation of the Stabilization Fund Account.
Also Delta State governor, Ifeanyi Okowa, announced that the Nigeria Sovereign Investment Authority (NSIA) released its account for the year ended 2016 and updated its 2017 activities.
According to him, NSIA reported fifth straight year of profitability in all its funds with core profits (excluding foreign transaction gains) of N26.28 billion ($88 million) for the year.
“NSIA also reported that total assets under management was about $1.25 billion for the most part of the year, as the additional contribution of $250 million was not received until the third quarter of 2017.
“It also reported that the return on asset was up to 6.60% in dollar terms,’’ Okowa stated adding that NSIA was shifting focus to infrastructure and direct investments in Nigeria.
On the 2017 activities, he said that the NSIA implemented the Presidential Fertilizer Initiative (PFI) in 2017 and began the construction of first three healthcare projects in Lagos, Kano and Umuahia respectively.
He said that the agency also continued work on Second Niger Bridge Projects, invested in and own 13% of Bridge International Academics Ltd – a network of Schools which delivers affordable high-quality Primary education to lower-income families.
He said that NSIA also invested in Babbar-Gona, an agricultural franchise that empowers smallholder farmers.
Okowa hinted that in 2018 NSIA would focus on executing infrastructure investments strategy in its core focus areas of Power, Toll Roads, Agriculture and Healthcare etc., and exploring opportunities in other sectors of investment such as refining, transport infrastructure and industrial real estate.
He stated that NEC resolved that account of NSIA be approved.
