$2.1 billion loan threaten FAAC monthly allocation to States

With a $2.1 billion budget support loan to States in the past and which is still hanging on their necks amid declining internally generated revenue, the liquidity nightmare of States governments may have further worsened with the news from the Nigerian National Petroleum Corporation (NNPC) that it would no longer remit funds to augment the Federation Account Allocation Committee (FAAC) for sharing to states in May.

According to Sunnews, so far, only Lagos, Rivers and a few other states currently generate revenue above N50 billion to augment their share of monthly FAAC allocation.

Lagos State recorded the highest Internally Generated Revenue of N418.99 billion, accounting for 32.1 per cent of the total and closely followed by Rivers State with N117.19 billion.

Others with the highest IGR in 2020 include Abuja (N92.06 billion), Delta (N59.73 billion), and Kaduna (N50.75 billion).

However, since February, there have been concerns over the shortfall in the FAAC revenue for the three tiers of government.

Recently, Edo State Governor, Mr Godwin Obaseki, raised the red flag that Nigeria was in dire straits and accused the Central Bank of Nigeria (CBN) of printing N60 billion to shore up the March allocation.

His claims were, however, punctured by both the CBN Governor, Mr Godwin Emefiele and the Finance Minister, Mrs Zainab Ahmed.

Emefiele specifically described Obaseki’s position as untrue, even as he threatened to force the states to pay the outstanding $2.1 Budget support facility approved by President Muhammadu Buhari in 2015.