Federation Accounts Allocation Committee (FAAC)

A top-level committee representing the entire federation and chaired by Anambra state governor Charles Soludo will hold its second meeting late Tuesday to advance Nigeria’s quest to add a massive N4trn to the cash available monthly for sharing by the three tiers of government on the back of the fuel subsidy removal.

That figure represents what can be gained from July to December this year alone and for the whole of 2024, the amount could be double this.

A senior government official close to the committee told BusinessDay Tuesday that the Soludo team whose membership also includes the group CEO of NNPC limited, the acting governor of the central bank of Nigeria and finance ministry chiefs including the accountant general of the federation, began its crucial model-building work last week after being appointed by the National economic council, NEC chaired by Vice President Kashim Shettima.

Apart from the N400bn which NNPC limited says is the monthly saving from subsidy removal, the committee is also dimensioning the extent of additional inflows from the recent changes in rate used by Customs & Exercise department to calculate import tariff as well as gains from the massive adjustment in the FX rate used to calculate receipts from crude oil exports.

For this month, the three tiers of government met at the monthly FAAC meeting to share a total of N786bn but BusinessDay has learnt that next month’s purse could almost double to about N1.4trn.

According to a Finance ministry official, “this expected bump in FAAC allocation will add huge addition to the cash available to the various governments, especially the states some of which get up to 90 per cent of their funds from FAAC and with this they can be expected to clear the huge backlog of unpaid salaries.”

Many states are broke, and unable to pay the monthly salaries of their civil servants. In Benue state for example, civil servants got their first pay in seven months only last weekend and many other states are in similar dire strait.

More details to follow-

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