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Thursday, 1 June 2017

Paris Club refund: Low revenue, reconciliation delay payment to states

Fidelis Soriwei and Ifeanyi Onuba, Abuja

 DWINDLING revenue generation into the Federation Account as well as the ongoing reconciliation of states’ claims by the Federal Government committee is the major factor delaying the payment of the second tranche of the Paris Club loan refund to states.

Findings by The PUNCH at the Federal Ministry of Finance showed that the committee, which was set up two months ago to reconcile the outstanding claims, was still meeting with the respective states on their claims.

It was gathered from officials in the ministry that all the states had submitted their claims to the committee, who explained that the reconciliation was ongoing to determine the exact amount the states were entitled to.

A top official in the ministry confided in one of our correspondents that apart from the fact that the committee had yet to complete its assignment, the revenue challenge facing the country had become a major factor that would determine when the claims would be settled.

The official said the Federal Government had, shortly after the release of the first tranche in December, reached an understanding with the states that no further release would be made until all outstanding claims of states were reconciled.

The source stated, “That committee started work since February and was given a 12-month period to interface with the state governments and do a proper reconciliation of the states’ outstanding claims.

“This is to enable the Federal Government to have a proper picture of the amount of claims that would be paid because the N522bn that was initially released in December last year was just about 25 per cent of what the states have claimed.

“So, it is after that reconciliation has been completed that we can now make the release.

“Don’t forget that even if we complete that process now, the cash flow of the Federal Government is still a factor that will determine the rate at which disbursements would be made.”

The Director of Information in the Ministry of Finance, Mr Salisu Dambatta, when contacted, declined to comment on the matter.

The Minister of Finance, Mrs. Kemi Adeosun, did not pick her calls and also did not respond to a text message sent to her on when the payment of the refund would be made to the states.

An analysis by The PUNCH on the revenue inflow to the federation shows that there is a shortfall in the revenue against the projections of the Federal Government as a result of crude oil production shutdown caused by pipeline vandalism and low tax receipts.

For instance, between January and April this year, the federal, states and local governments received a total sum of N1.81trn as statutory allocation from the Federation Accounts Allocation Committee.

A breakdown of the amount shows that in January, the three tiers of government shared N430.16bn out of which the Federal Government took N168bn; states, N114.28bn; and local governments, N85.4bn.

In February, the federation generated N514bn out of which the Federal Government’s share was N200.6bn; states, N128.4bn; and local governments, N96.52bn.

In March, however, revenue generation dipped to N466.9bn, and from it, the Federal Government got N180.5bn; states, N116.5bn; and local governments, N87.5bn.

Revenue declined further by N52.07bn from N467.8bn shared in March 2017 to N415.73bn in April, with the Federal Government receiving N163.89bn; states N117.59bn; while local governments received N87.77bn.

Adeosun had said the Federal Government would require N165bn monthly to settle its workers’ wage bill.

FG, govs agree on payment of second tranche  

 Meanwhile, there were indications on Sunday that the Federal Government and the state governors had reached a decision on the payment of the second tranche of loan refund.

Investigation by The PUNCH revealed that in order to generate more funds to pay the refund, the finance minister was sourcing for funds among Federal Government parastatals.

It was learnt that Adeosun was mobilising funds for the payment just as she got funds from the Nigeria Liquefied Natural Gas to pay the first tranche of the funds.

The source added, “There is nothing like disagreement between the governors and the Federal Government. Nobody is angry about anything.

“The fact is that there is no money now. You know the Minister of Finance got the last money from proceeds from the NLNG to pay the first 50 per cent. And the minister is supposed to find money in any of the parastatals to take care of the rest 50 per cent.

“There is an agreement between the Federal Government and the states that the money should be paid.”

The Head, Media and Public Affairs, Nigeria Governors’ Forum’s secretariat, Abdulrazaque Bello-Barkindo, told The PUNCH that he had “no authorisation to speak on the issue.”

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