SAN FRANCISCO, June 29, (THEWILL) – Workers have been put on notice not to expect an early salary this month of June because the Governors’ meeting with the Federation Accounts and Allocation Committee (FAAC) ended in a deadlock.
According to Finance Minister Kemi Adeosun, If the issues are not resolved, salaries may be affected in the states.
Finance Commissioners, who converged on Abuja with the expectation to collect their states’ share of the monthly allocation, reportedly walked out of the FAAC meeting as they protested the deductions.
FAAC members, she said, felt that some of the costs presented by the Nigerian National Petroleum Corporation (NNPC) could not be justified, hence they decided that rather than approve the accounts, the negotiations will continue.
She said President Muhammadu Buhari and Vice President Yemi Osinbajo were briefed and supported the Ministry of Finance and the commissioners for finance not to approve those accounts until further explanations on some of the costs being implemented are given.
She added that the National Economic Council (NEC), presided over by Prof. Osinbajo, has demanded explanations from the NNPC for unclear costs the corporation made from FAAC.
Briefing State House correspondents at the end of the NEC meeting, Mrs. Adeosun said: “Also, in my capacity as chairman of FAAC, I briefed governors on the deadlock that we have got currently in the federation account and explained what happened. And there was quite an extensive debate on what to do.
“For the purpose of this briefing, we operate NNPC as a business. We have invested public capital in that business and we have expectations of return and when that return falls lower than our expectations then the owners of this business which in this case is the Federal Government and states, need to act. So, that was what caused the deadlock and we really felt the figures the NNPC was proposing for FAAC were unacceptable. We felt that some of the costs couldn’t be justified and so we have decided that rather than approve the accounts, we will go back and do further work.
“So further negotiations and interactions are going on with NNPC, as we speak. However, we did brief both Mr. President and Mr. Vice President on the deadlock and asked for their support and their forbearance in this because the consequence of this is that salaries might well be 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 the Federal Government are all in agreement that we need to get to the bottom of those figures.
“In particular, now that the oil price is now $76 per barrel in the spot market, which means that bonny light is about $78, we want to be aggressively putting money away into the excess crude account.
“So we are very conscious that this period, this window of relatively high oil price might not last and we will like to be able to save. If we cannot get into the federation account the sort 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 taken and they are fully in support of the positions of the Federal Ministry of Finance and the commissioners for finance not to approve those accounts until we get further explanations on some of the costs being implemented.
“Based on oil price, oil quantity, you can pretty much calculate what you are expecting to see in the federation account and if the figure is less, then the right question that any stakeholder must ask is, why.
“So we have been going back and forth with NNPC to try and understand these figures before we can accept them. Remember that the FAAC figures have to be formally accepted by the Federation Account Committee and we were simply not comfortable with the quantum of some of the deductions made and, therefore, we could not approve those figures.
“So even as we speak, there is an interface going on between the commissioners forum, Ministry of Finance, office of the accountant general, CBN and NNPC, but we hope to be able to convene FAAC within the next few days.”
