By Uche Amunike
The Federal Account Allocation Committee (FAAC) meeting for the month of October 2021 remains inconclusive as States and Local Governments questioned the commencement of deductions concerning the $418 million judgement debt for ‘consultancy services’ regarding the Paris Club Loans refund.
The Nigerian Governors Forum, (NGF), released a statement where they objected to the execution of the judgement, pending full determination of the ongoing litigation on the subject matter insisting that they were not informed of any such deductions beforehand.
The document was signed by Mr David Ilofu, Chairman of Commissioners for Finance of Nigeria, which represents State Governments at the FAAC meeting.
As a result of this development the monthly meeting was postponed to allow all pending issues to be sorted out.
The document explained that the FAAC meeting for the month of October 2021 which was held on Friday 22nd October 2021, with the intention of distributing revenue accrued to the Federation (federal state and local governments) was inconclusive.
It partly read: ‘The October 2021 meeting, which was chaired by the permanent secretary on behalf of the honourable minister, received revenue performance reports from the revenue-generating agencies (Nigerian National Petroleum Corporation, Federal Inland Revenue Service, Department of Petroleum Resources, Nigeria Custom Service, and Ministry of Mines and Mineral Development).’
‘These reports by the agencies and the revenue inflow analysis by the office of the Accountant General of the Federation for the month of October 2021 could not be adopted by the committee.’
It further stated that members rejected giving their approval for the disbursement of the available revenue after they found out the manner in which funds belonging to the Local Government Councils were deducted in favour of some consultants for a judgement debt of $418,000,000.00 for consultancy services with regards to Paris Club Loans refund.
It further stated that because of the available information on ground, the deduction will continue for 10 years or 120 months contrary to the provisions of section 162 of the Constitution of the Federal Republic of Nigeria 1999, as amended.
The Commissioners of Finance pointed out that NGF had objected to the execution of the judgement until current litigation on the subject matter is fully determined.
The document added that the commissioners of finance representing state and local government councils we are not pre-informed of the deduction and this came at a time when states and local governments are in dire straits. Therefore it will further worsen their fiscal position.
As a result of this, the meeting was adjourned to make room for further consultations and resolution of the issues that have been previously raised by the Nigeria Governors Forum (NGF), concerning the assignment that brought about the claim and the judgement.
In August the government, through their lawyer, Mr Femi Falana wrote to the Federal Ministry of Finance, seeking a stay of execution of the judgement of the trial courts on the matter, pending the determination of all appeals. They maintained that once an application for injunctive relief was pending in a court of law, parties were stopped from engaging in any act that could foist the fait accompli on the court in respect of that application or action.
The FAAC Committee is chaired by the Minister of Finance, Budget and National Planning with Commissioners for Finance in the states as members representing the 36 States and 774 local government councils.
Other members of the committee who attend the FAAC meeting monthly in Abuja, to distribute accrued revenue to the three tiers of government are the FCT Director, Treasury, Accountant General of the Federation, (AGF) and the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC).
