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Tag: FAAC

  • FAAC: Fed Govt, states, councils share N655b in December

    FAAC: Fed Govt, states, councils share N655b in December

    The three tiers of government have started 2018 on a good note as members of the Federation Account Allocation Committee (FAAC) yesterday shared N655.177 billion for the December 2017.

    Addressing reporters at the end of the monthly FAAC meeting on December 2017 disbursements, the minister of finance and chairman of FAAC, Mrs Kemi Adeosun, stated that N540.446 billion was shared as statutory disbursements.

    However, after deducting costs of collection for the Customs and Federal Inland Revenue Services (FIRS) the federal government pocketed N252.543 billion, states, N128.093, local governments got N98.755 billion while N47.738 billion shelled out as 13 per cent derivation to oil producing states.

    After making statutory deductions to FIRS, the three tiers also shared N80.604 billion from proceeds of Value Added Tax (VAT) with the federal government receiving N13.091 billion, state governments, N40.302 billion and local governments N28.211 billion.

    According to the minister,  gross revenue of N540.446 billion received for the month was lower than the N549.533 billion received in the previous month by N9.087 billion.

    Adeosun noted that the decrease in crude oil export sales by 0.59 million barrels resulted in decreased revenues from export sales of $11.65 million.

    The finance minister also disclosed that the accruals into the Excess Crude Account still stands at $2.317 billion.

    Also speaking after the meeting, the chairman of finance commissions forum Alhaji Mahmoud Yunusa said many states governments have keyed into the efficiency unit which has been working favourable for the states.

    Yunusa from Adamawa state many state governments have embarked on cost cutting measures after adopting the efficiency unit protocol which is part of the fiscal responsibility plan that they have all agreed to adopt.

  • FAAC reports NNPC to NEC over missing $1.4b remittance

    FAAC reports NNPC to NEC over missing $1.4b remittance

    There is $1.486 billion generated from gas sales from the Nigeria Agip Oil Company (NAOC) divested assets between January 2013 and December 2016?

    The Federation Accounts Allocation Committee (FAAC) and the Nigerian National Petroleum Corporation (NNPC) have not been able to trace the cash.

    According to documents in possession of The Nation, the Department of Petroleum Resources (DPR) reported that the amount was paid into the Federation Account but a scrutiny of the account by FAAC showed that it was never paid.

    FAAC set up a sub-committee to investigate the issue and it was reported that “the same figure was captured by DPR for which the sum of $114.45 million was ascertained as Royalty. …NNPC/NPDC requested that the sum of $1.486 billion should be considered as part-payment for the Good and Valuable consideration of the NAOC divested assets that were valued at $1.540 billion, which the Ad-hoc Committee disagreed on the premise that there was need to verify the amount claimed by NNPC.”

    According to the report submitted to FAAC on December 16,  “the chairman (of the sub-committee) reported that out of the established NLNG Gas Sales value of $1,165,827,482.74 for the period under consideration, a total of $85,111,629.90 was transferred to MCA Escrow Account, leaving a balance of $1,080,715,852.94 as the amount paid into the Federation Account.”

    FAAC was also informed that NNPC paid another $126,753,615.34 into the federation account as NLNG-NAOC gas sales supplementary reconciliation invoices for the period, thus bringing the total amount paid by NNPC/NPDC to $1,207,469,468.28 and not $1,486,621,856.04 as earlier claimed by the oil giant.

    The sub-committee chairman reported that it “upheld that the amount established as earlier paid to the Federation Account be netted off the Good and Valuable Consideration of $1.540 billion, leaving outstanding Good and Valuable Consideration for the NAOC assets to stand at $322,530,531.72,” according to the document.

    FAAC, therefore, asked NNPC to expedite action on the reconciliation of the Federal Inland Revenue Service (FIRS) Petroleum Profit Tax (PPT) to enable the sub-committee conclude its exercise.

    Also, the FAAC has confirmed that the Nigerian Petroleum Development Company (NPDC) is owing the Federation Account N1,313,915,561,688.39 (January 2010 to December 2016).

    To recover the debt, FAAC has reported NNPC to the National Economic Council (NEC), which is headed by the Vice President for its failure to remit NPDC’s indebtedness to the federation account.

    FAAC resolved to report NNPC to NEC in view of its refusal to fulfil its promise to make the money available for distribution during the last FAAC meeting.

    The Director, Home Finance, Federal Ministry of Finance, was directed to compile NNPC’s infractions for NEC for sanctions.

  • Paris Club refund: Delta, Ogun, Adamawa, six others to wait

    Paris Club refund: Delta, Ogun, Adamawa, six others to wait

    •27 states collect theirs
    •ECA swells to $2.317bn
    •FG, States, LGs share N609.959 billion for November

    Nine states including Delta, Ogun and Adamawa are to wait for now before collecting their own share of the third tranche of the Paris Club refunds, The Nation leant last night.

    However, 27 other states have collected their dues in what promises to be a rosy Christmas and New Year seasons for public servants in the benefitting states.

    Much of the funds is expected to be utilized to offset arrears of workers’ salaries and pensions.

    The release of the refunds to the states is in keeping with the directive of President Muhammadu Buhari that the states should get the money before Christmas to enable them pay workers and pensioners.

    The Director Home Finance in the FMF, Mrs. Olubunmi Siyanbola, confirmed the payment yesterday at the end of the November 2017, Federation Account Allocation Committee (FAAC) meeting in Abuja.

    But she declined to name the states that were paid and those that are to wait.

    A total N609.959 billion was shared by the three tiers of government at the FAAC meeting which was shifted from Friday to yesterday.

    This is N77.25 billion more than what they shared in October.

    The Nation gathered that there are some technical challenges and reconciliation matters to be resolved before the nine non-benefitting states can access their own refunds.

    Some of the states are actually expected to refund excess cash previously paid to them.

    But some oil producing states may get more than others having been short paid in the past.

    Investigation showed that Delta, Ogun, Adamawa, and six others have some issues to clarify before drawing the final tranche of the refunds.

    While a consultant has secured a court order in  August to freeze the bank account where Delta’s share of the refunds was domiciled, Ogun and Adamawa are said to have  been paid in excess of their dues and might need to reconcile their accounts.

    A Federal Capital Territory High Court had frozen Delta account following an application by Mauritz Walton Nigeria over failure to pay consultancy fees.

    The court mandated Zenith Bank to “create an escrow account for the frozen cash.”

    A top source, privy to the controversy on the London-Paris Club said:” Some of the nine states have not met the requirements to qualify them for the drawing of the refunds. One of the key criteria is the reconciliation of the actual amount deducted and what such states deserve as refunds.

    “Some of the states cannot even trace records much less reconciliation of records. The Federal Government is not a Father Christmas, they must come clean with their books.

    “Some states have defaulted in paying the consultants they hired. Instead of paying these consultants the 5% in the agreement, they paid them about 2% to 2.5%. They are now forcing these consultants to go to court.

    “Some of the state governors were embarrassed by the agreements entered into by their predecessors on London-Paris Club refunds.

    “For instance, Abia, Kogi, Adamawa, Taraba , Delta and Zamfara opted to pay 10% of their refunds to consultants.  But the states now see this rate as being on the high side.

    A few other states offered between 12 and 20 per cent to their consultants. The breakdown is as follows: Ondo (12%);  Niger, Enugu, Imo, Anambra and Ebonyi (15%); and Edo, Bayelsa, and Oyo( 20%).

    Another source said: “Some states, like Ogun and Adamawa, are expected to make refunds following alleged excess payments made to them. But these states have disputed getting excess.

    “The reconciliation of records will determine the truth or otherwise of the debit status of some of these states.”

    Asked yesterday to shed light on why nine states were excluded from payment of the third tranche of the refunds, Siyanbola said  it was only “a matter of process that is holding” them back and stressed  that they would  get theirs as soon as the processes were completed.

    Another issue that was raised at the FAAC meeting was the accruals into the Excess Crude Account (ECA) which now stands at $2.317 billion as against $2.308 billion last month.

    Commenting on the development, the Accountant General of the Federation (AGF) Mr. Ahmed Idris attributed the marginal increase in the ECA “to interests that have to continue accruing for keeping the money for the future.”

    When asked if the $1 billion the state governors approved for withdrawal from the ECA to fight Boko Haram had been deducted, Ahmed Idris stated:”it is one thing for requests to be made, there is a process for money be taken out of an account.”

    Idris noted that the state governors as part owners of the ECA were perfectly in order to request that part of the money be used to secure the country.

    Regarding Governor Ayo Fayose of Ekiti state’s objection to the withdrawal of $1 billion from the ECA, Idris said Governor Fayose should have made his objections known to the Governors Forum instead of the press.”

    The AGF also explained why the meeting had to take place yesterday , stressing that because of Christmas activities, it was decided to hold the meeting mid-month (December) as against 20-25 of the month so that money would  be available for workers to celebrate Christmas.

    Because of the change in date, Idris noted that “institutions found themselves inundated with reconciling figures at short notices and some FAAC officials were at the Central Bank of Nigeria (CBN) till 9pm and the documents needed got to stakeholders this morning (Saturday)  thus prompting today’s  (yesterday) meeting so that Nigerians can have better Christmas and New Year celebrations”

    Of the N609.959 billion shared by  the three tiers of governments the federal government got N248.227 billion, while the  states received N125.904 billion and the local governments N97.067 billion.

    The oil producing states got an additional N43.215 billion as 13% derivation requirements while the balance of N15.120 billion went for cost of collection and FIRS refund.

    On Value Added Tax (VAT) disbursements, Idris revealed that the total sum of N80.426 billion was shared, with the federal government receiving N11.581 billion, state governments N38.605 billion, local governments N27.023 billion  while  the balance of N3.217 billion went as cost of collection and FIRS refund.

    In his address, the chairman of Commissioners Forum, Alhaji Mahmoud Yunusa said the “Saturday’s figures were higher now but they can be better off. The states are happy that workers will be paid before Christmas.”

  • NNPC document forces shift of FAAC meeting till today

    NNPC document forces shift of FAAC meeting till today

    The  Federation Account Allocation Committee (FAAC) unexpectedly  shifted its November  meeting from yesterday to today following the unavailability of  a document on revenue generated  by  the   Nigeria National Petroleum Corporation (NNPC).

    Stakeholders,The Nation gathered,could not receive the component statement (a very important FAAC document) from the Nigeria National Petroleum Corporation (NNPC) to the Central Bank of Nigeria (CBN).

    This is the first time FAAC is taking place  on a Saturday.

    A delegate to the meeting said: “NNPC is the major cause of all this.It  brought no money just like it did  last month and the governors insisted it  must bring in money before it  later brought out N30 billion from Excess Crude Account (ECA) for the last FAAC to hold.

    “Today,the CBN and the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) said there was no component statement available from NNPC.

    “They have not received the component statement from the NNPC indicating that NNPC has not paid money into the Federation Account. Without that money, we have to wait till tomorrow (today) for FAAC meeting to take place.

    “When the component statement is sent from NNPC it will take about six hours for the stakeholders can go through it.

    “The component statement is with the AGF and it will take about six hours before the FAAC meeting can be scheduled.”

    The October FAAC meeting suffered the same fate, prompting delegates  to call for the suspension of the meeting until matters were reconciled.

    At that meeting, it was agreed that states would be fully involved in tracking and collating the figures presented by the NNPC to the FAAC.

    Addressing journalists at the end of the October  FAAC meeting in Abuja which held several weeks late Mr. Mahmoud Yunusa, Chairman of commissioners forum said they “discovered discrepancies in the October 2017 figures of the FAAC Papers submitted by NNPC and demanded  genuine figures. Going forward, we will engage a consultant to work with NNPC to collate figures and report back to states on the true figures.”

    Based on the demands of the state governments for proper figures to be disclosed by the NNPC, Mahmoud Yunusa said “there was a slight inflow in the amount that accrued for sharing at the end of the day.”

    The states, he said, decided to take what was handed out to them so that they “can go manage to go home with what we got today so that we can pay salaries.”

  • Deductions take toll on 11 states’ FAAC allocation

    Deductions take toll on 11 states’ FAAC allocation

    The National Bureau of Statistics (NBS) has said 11 states lost a huge part of their August 2017 allocation to deductions.

    According to the latest Federal Account Allocation Committee (FAAC) report released by the bureau, a total of N467.85 billion was distributed among the three tiers of government in August.

    “The amount disbursed comprised of N387.32bn from the statutory account and N80.53billion from valued added tax (VAT).

    “Federal Government received a total of N193.05billion from the N467.85billion shared. States received a total of N130.69billion and local governments received N98.01billion.

    “The sum of N31.59billion was shared among the oil producing states as 13 per cent derivation fund.”

    Eleven states lost more than N1 billion from their allocations, with Lagos being the worst hit.

    Lagos got a gross allocation of N9.52 billion and lost N2.80 billion to deductions. Osun got a gross allocation of N3,06 billion and lost N2.41 billion to deductions, to have a net allocation of N650 million.

    Delta also got a gross allocation of N10.50 billion and lost N2.45 billion to deductions, to have a net allocation of N8.05 billion.

    States which lost more than N1 billion to deductions were Zamfara, Rivers, Plateau, Ondo, Ogun, Cross Rivers, Ekiti and Jigawa.

  • FAAC July revenue drops to N387.31b

    FAAC July revenue drops to N387.31b

    The revenue shared yesterday to the federal, state and local governments from the Federation Account for July dropped by N183.26 billion from the amount shared for June.

    The amount shared yesterday is N387.31billion compared to June’s N570.58 billion.

    The Permanent Secretary in the Ministry of finance, Dr. Mahmoud Isa Dutse, confirmed the amount yesterday at the close of the joint monthly Federation Account Allocation Committee (FAAC) meeting.

    The amount shared comprised Value Added Tax (VAT), Company Income Tax (CIT) and Petroleum Profit Tax (PPT).

    Dr. Dutse said the decline in revenue was caused by a drastic fall in revenue from Companies Income Tax due to the expiration of the deadline for filing tax returns.

    He noted that while oil revenue recorded increases due to rise in export sales for the federation by $62 million, the same could not be said of non-oil revenues.

    Dutse said: “Though the month under consideration recorded increase in average price of crude oil from $50.27 to $51.05 per barrel and significant increase in export volume by 1.20 million barrels, resulting in increase revenue from export sales for federation by $62 million, the amount shared reduced drastically.”

    A breakdown of the total allocation for July showed that the Federal Government received N193.04 billion, states (N130.69 billion) and local government areas (N98.01 billion) while N31.59 billion was given to the nine oil producing states as 13 per cent derivation.

    Chairman, Forum of Finance Commissioners, Mahmud Yunusa, lamented the drop in revenue.

    He warned: “The time has come for states to start looking inwards to shore up revenue. We need to block leakages in revenue and come up with reforms to shore up revenue. We are also working on cost of running governance and any cost that is not necessary in running government needed to be reduced.”

  • FG, states, LGs share N652. 229bn in July

    FG, states, LGs share N652. 229bn in July

    The three tiers of government on Tuesday shared N652.229 billion as statutory revenue for July.

    Of the N652.229 billion shared, Federal Government got N286.650 billion, states received N178.619 billion and local government councils garnered N134.927 billion.

    The sum of N29.894 billion was given to oil producing states as 13 per cent revenue derivation.

    The Accountant General of Federation, Alhaji Idris Ahmed, released the figures at the end of the monthly Federation Account Allocation Committee (FAAC) meeting held in Abuja.

    He put statutory revenue received during the month at N570, 584 billion which was higher than N317.562 billion received in June by N253.022 billion.

    Ahmed said: “The decrease in the average price of crude oil from $55.18 to $50.27 per barrel and a significant decrease in export volume by 3.20 million barrels, resulted in decreased revenue from export sales for the federation by $183.68 million.

    “Crude oil production suffered due to leakages, shut-ins and shut downs at terminals for maintenance and force majeur declared at forcados terminal since February.

    “There were significant increases in Company Income Tax (CIT) being the peak period for its collection and Petroleum Profit Tax (PPT). Also VAT, import and Excise duties recorded marginal increases.”

    Asked if Lagos State has started enjoying the 13 per cent derivation principle as one of oil producing states, the AGF added: “Lagos is already being identified as oil producing state. The first hurdle has been crossed. The relevant agencies to determine the quantity of oil that is being produced from Lagos is working round the clock. We are on course, Lagos already knows its position.”