- To publish audited accounts Allocations from FAAC dropped by N18.2 billion to N281.5 billion in April
Ndubuisi Francis in Abuja
The 36 states of the federation and the Federal Capital Territory (FCT), Abuja, have agreed to reform their finances as well as those of the local councils under a Fiscal Sustainability Programme (FSP), to ensure their long term viability.
The 22-point fiscal reform action plan to be implemented by the states under the FSP mirrors the ongoing public financial management transformation being undertaken by the federal government, including biometric capture of all civil servants, the establishment of an Efficiency Unit, implementation of Continuous Audit, improvement in Independently Generated Revenue (IGR) and measures to achieve sustainable debt management.
A statement issued by the Special Adviser on Media to the Minister of Finance, Mr. Festus Akanbi, said the reforms were unanimously agreed to by the state governors during the National Economic Council (NEC) meeting, which was held last Thursday.
The FSP highlights five key strategic objectives, followed by 22 recommended action points, with a view to achieving objectives around improved fiscal behaviour that will align both short-term and long-term sustainability objectives of the federal and state governments.
Starting from this year, all state governments are expected to abide by the FSP’s strategic objectives around the five key elements of Accountability & Transparency,
Increase in Public Revenue, Rationalisation of Public Expenditure, Public Financial
Management Reforms, and Sustainable Debt Management.
The federal government is developing a financial support structure, which will be directly tied to the attainment of agreed fiscal reform milestones.
The ultimate objective of the FSP is to ensure that states are set on the path of fiscal sustainability.
Under the FSP, states are therefore required to publish audited annual financial statements within six months of financial year end.
There will also be an introduction and compliance with the International Public Sector Accounting Standards (IPSAS).
Stares will equally publish their annual budgets online as well as publish budget implementation performance report online quarterly effective from March 2017.
A standard IPSAS compliant software will be deployed for use by all the states and local governments.
Meanwhile, allocations from the Federation Account Allocation Committee (FAAC) to the three tiers of government dropped by N18.2 billion to N281.5 billion in April.
It declined by N18.2bn from N299.74bn in March to N281.5bn in April, figures released by the Federation Account Allocation Committee have revealed.
There was also a slide of N18.8bn in gross statutory revenue from N232.61bn in March to N213.81bn in the month of April.
Thee Minister of Finance, Mrs Kemi Adeosun, who addressed journalists after the monthly FAAC meeting in Abuja yesterday, blamed the drop in allocation to a huge decline recorded in the prices of crude oil.
The finance minister said there was a revenue loss of $45.9m as a result of drop in average price of crude oil from $39.04 in December,2015 to $29.02 in January.
While oil production increased slightly between December 2015 and January 2016 despite explosions at Escravos terminal,she said force majeure declared at Brass terminal, shut-in and shut-down of pipelines at other terminals for repairs maintenance affected government revenues.
“The gross statutory revenue of N213.81bm received for the month was lower than the N232.61bn received in the previous month by N18.8bn.
“There was revenue loss of $45.9m as a result of drop in average price of crude oil from $39.04 in December 2015 to $29.02 in January 2016,” she said.
In terms of allocation to the three tiers of government, the minister who is also the chairman of the committee said the decline in revenue had a negative impact on the amount shared.
For statutory allocation, the Federal government received the sum of N101.21bn, states N51.33bn, local governments N39.57bn.
The sum of N15.75bn was allocated to oil producing states based on the 13 per cent derivation principle.
For Value Added Tax (VAT) distribution, the minister said the sum of N9.39bn was allocated to the federal government, states N31.32bn while the local government councils were allocated a total sum of N21.92bn.
The balance in the Excess Crude Account at $2.26 billion.