Tuesday, 20 April 2021 03:49

Fed. Govt: we shunned states request to borrow N50bn for sharing

The dust raised by Edo State Governor Godwin Obaseki’s claim that the Central Bank of Nigeria (CBN) printed over N60 billion to augment last month’s allocation to the three tiers of government may take a while to settle.

On Monday, Finance Minister Zainab Ahmed added a fresh twist to the controversy by disclosing  that governors put pressure on the Federal Government to borrow N50 billion from the CBN to make up for the March shortfall.

Ahmed said government refused to yield  to the governors’ wish and insisted that states should make do with whatever that was available to the Federation Account Allocation Committee (FAAC) for sharing.

The minister, who maintained that Obaseki’s allegation was “not true,” advised states to brace for  “increasing reduction in our FAAC revenue.”

Ahmed spoke on a live Nigeria Television Authority (NTA) programme monitored by The Nation on Monday.

CBN Governor Godwin Emefiele and the Progressives Governors’ Forum (PGF) had also denounced the allegation by Obaseki, a Peoples Democratic Party(PDP) governor.

The fact-sheet released by the PGF  shows that  the total distributable revenue for March was N596.94billion.

The forum said due to the shortfall in gross statutory revenues, compared to the previous month of February, “an augmentation was made in the sum of N8.65 billion from the Forex Equalisation Fund Account.

It explained that  the augmentation brought the total distributable revenue to N605.59 billion.

It was learnt that the decision to augment the shortfall was taken behind closed doors.

A source, who witnessed the  proceedings   disclosed that  there was a heated debate over the shortfall in revenue between Commissioners of Finance and the federal authorities led by the Permanent Secretary, Ministry of Finance.

According to the source, the meeting ended in a deadlock when the commissioners   insisted   the states should receive more money than what was allocated to them.

He explained that the  decision to augment the shortfall was taken behind closed doors “because the Permanent Secretary is not empowered to take such a decision”.

Shedding light on the development, the Finance minister said: “In the month of March, during the FAAC meeting, we had a shortfall of about N50 billion and we did not have enough accrued in any of the reserve accounts. The states, to be honest, wanted us to borrow from the Central Bank of Nigeria, but we resisted; we just told  everybody to go back and live within what they had.”

Ahmed sympathised  with the state governments, saying:  “It is a difficult time, I can explain to you how difficult it is, not just for the Federal Government, but also for the states. We see an increasing reduction in our FAAC revenue.”.

The minister chided Obaseki for saying that say ‘the CBN has printed money for FAAC’,  “That was very unfortunate because it is not true.”

But, at the weekend, the PDP governors rose in defence of Obaseki by berating Emefiele and the PGF.

They said a man with economic and financial knowledge like Obaseki could not have raised a false alarm.

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