Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by ogododo: 8:12am On Apr 30, 2021 |
Bauchi State Governor, Senator Bala Mohammed, yesterday warned that Nigeria will be in chaos and financial hardship if the NNPC does not rethink its decision to make zero remittance to the Federation Account in April because of the need to defray the cost of petrol subsidy.
The NNPC had in a letter to the Accountant-General of the Federation warned that it would be unable to make any remittance to the central account of the federation for distribution in May because it needed to defray around N111 billion cost of February’s subsidy on petrol.
Reacting to the NNPC’s zero allocation notice, Mohammed said: “You have just heard that the NNPC said that they will not be able to give money to FAAC. I don’t know the amount of chaos that would cause because most of the states are depending on the Federation Account.”
He attributed the downturn in the economy to what he described as the cluelessness of the All Progressives Congress (APC)-led administration.
According to him, it is “because of the cluelessness and lack of capacity to manage the economy that we have found ourselves in this. There is even a blame game between the members of the party within the APC.”
Mohammed told reporters after the National Executive Committee (NEC) meeting of the Peoples Democratic Party (PDP) in Abuja that the PDP, if given a chance in 2023, would not be arrogant with power.
“So, I think we are not going to be arrogant. We know the mistake we committed before and we have taken steps to correct them. We are presenting to Nigerians the better framework, better platform for them to really actualise their aspirations,” he said.
The Bauchi state governor said that the task before the PDP is to ensure unity within its rank ahead of the 2023 general election.
FG, States Urged to Prioritise Spending, Remove Petrol Subsidy
Meanwhile, analysts yesterday called on the federal, state and local governments to prioritise their spending and be more creative in generating internal revenue as a way of coping with the hard times heralded by dwindling revenue from the Federation Account.
The analysts, in separate interviews with THISDAY, also urged sub-national governments to defer expenditures that could be delayed till the revenue situation improves as well as to develop measures that would help boost internally generated revenue (IGR) in the states.
They spoke against the backdrop of a letter, dated April 26, 2021, by the Nigerian National Petroleum Corporation (NNPC) to the Accountant-General of the Federation, Mr. Ahmed Idris, that it will not be able to remit any funds to the Federation Account in April for distribution in May, in a bid to recover about N120 billion spent on petrol subsidy.
The analysts called on states to look inwards and come up with ingenious plans to boost their revenues by encouraging more investments as well as creating an enabling environment for businesses.
They stated that the announcement by NNPC about not remitting revenue to the Federation Account was particularly “very worrisome.”
The Managing Director, Financial Derivatives Company Limited, Mr. Bismarck Rewane, in his reaction, explained how petrol subsidy affects government’s revenue.
He said: “The truth is that what this points to is the fact that subsidy is a cost to the NNPC and a cost to the government and the bottom line is that when subsidies increase, the revenue available to run government’s activities is reducing. So, there is an inverse relationship between subsidy, the level of subsidy and the level of revenue available to the government.”
Managing Director/Chief Executive, Dignity Finance and Investment Limited, Dr. Chijioke Ekechukwu, said it was high time the government recognised the need to change fiscal allocation policy and allow the states to be self-sufficient and self-sustaining.
He said the development was an indication that the federal government needed to allow the pump price of petroleum products to be determined by demand and supply and “not by any meeting with the labour union.”
“But it is also a time for these governments to look inwards and harness other sources of revenue to cushion the effect,” added.
Similarly, President, Capital Market Academics of Nigeria, Prof. Uche Uwaleke, stated that austere times equally calls for cutting costs and reducing wastes in government spending.
He said the development should be of concern to Nigerians, especially civil servants at the state level as salaries would either be delayed or not paid, adding that a shortfall in projected revenue will also affect states’ capacity to pay contractors handling various projects.
Uwaleke said the situation would “adversely affect the distributable revenue for the months that NNPC is unable to remit money to the Federation Account due largely to rising under recovery costs or fuel subsidy.”
“This is because the NNPC is a major contributor to that pool. The others are the FIRS, Customs and to a little extent, Ministry of Solid minerals,” he added.
According to him, given the situation, state governments should reprioritise their spending and make salary payment a priority.
On his part, Managing Director/Chief Executive, SD& Capital Management Limited, Mr. Idakolo Gbolade, said the non-remittance by NNPC would constrain the federal government to meet repayments of due obligations, including salaries, counterpart funding and debt repayments.
He said the states would also not be able to pay salaries and service local debts, adding that there will be increased insecurity of jobs and life, should the trend persist.
According to him, the states should look inwards and evolve ingenious plans to boost their revenue by encouraging more investments as well as create an enabling environment for businesses to thrive.
He added that the states should also energise the local economy by encouraging businesses, especially SMEs with incentives to increase their capacity.
In his contribution, a Senior Lecturer at the Department of Economics, Pan-Atlantic University, Dr. Olalekan Aworinde, said printing of money as disclosed recently by the Governor of Edo State, Mr. Godwin Obaseki, should not be considered.
“This issue of subsidy, I have always said is a fraud because there are a lot of people that would not bring in petrol products but are being paid subsidy claims. Oil as a matter of fact cannot solve our problem; there is the need for the government to diversify. There is a need to improve the state of infrastructure as well as the Ease of Doing Business in order to attract the much-needed foreign investors.
“The way out is for governments at all levels to be proactive. Nigeria is broke and a lot of people that are supposed to be paying taxes are not paying taxes. “We need to bring in a lot of people into the tax net and all of these require a lot of cooperation. There are only a few people that are paying taxes, while a lot of people are not.
“There are so many people that are working and earning incomes, but are evading taxes. Apart from that, there are lots of issues with our tax policies in this country and there are lots of loopholes in our tax policies,” Aworinde added.
The Director-General of the Lagos Chamber of Commerce and Industry, Dr. Muda Yusuf, said the unfolding scenario was troubling and described it as the consequences of the perpetuation of an unsustainable subsidy regime.
Yusuf said if the NNPC became incapacitated because of the burden of funding subsidy, the implications for states and local government would be dire.
He said: “The social and economic systems of many states and local governments would be at risk of complete collapse. The NNPC is a major source of funds into the Federation Account. Many states are about 70 to 80 per cent dependent on revenue allocations from the Federation Account.
“Infrastructure spending will suffer serious setbacks across all levels of government, payment of salaries will be at risk, fiscal deficit may escalate and debt sustainability issues will be aggravated.
“It is thus imperative to come up with a creative and innovative exit strategy from the subsidy regime. It is also important to address the fiscal federalism question to reduce the current high dependence of sub-nationals on the centre.”
Also, the Managing Director of BIC Consultancy Services Limited, Dr. Boniface Chizea, said the zero remittance from NNPC to the Federation Account in May would affect the three tiers of government to the extent that they are allowed to feel the shortfall.
Chizea said the only way the impact could be minimised was to borrow from the Central Bank of Nigeria (CBN) to make up the shortfall.
He said the fact that the NNPC contributed N 96.86 billion, N64.16 billion and N41.184 billion to the Federation Account in January, February and March respectively was sufficient alert for remedial steps to have been envisaged.
“A back of the envelope calculations gives the average contribution from the NNPC over the three months at about N60 billion. So, if this shortfall cannot be made up, we can assume that the states collectively would experience a shortfall of N60 billion in their allocation which could approximate to N1.5 billion allocation to beneficiary entities,” Chizea said.
He added that public servants would have a course to worry because state governments’ inability to pay salaries would worsen the hardship in the land and might precipitate macroeconomic instability.
Chizea said complete removal of subsidy was the only solution to forestall future recurrence.
“We have been on this matter for a very long time now. But the political will has been lacking to push this through. One of the first requirements for subsidy removal is that the major oil marketers will take over this responsibility for supplying petrol. There is a glimmer of hope for an end to the payment of subsidy from consideration of the fact that Dangote has 650,000 barrels a day refinery,” he said.
In his contribution, Managing Director of Cash Express Limited and a licensed Bureau De Change Operator, Mr. Josaphat Madueke, said the situation would affect the economy depending on the percentage of the NNPC’s contribution to the Federation Account and the amount of savings the government could fall back on.
Madueke said: “It means that the month of May may be tough for the foreign exchange market if it affects the ability of the CBN to fund the market. But, it is a bad omen, whichever way one looks at it.”
https://www.thisdaylive.com/index.php/2021/04/30/bauchi-gov-nnpc-zero-remittance-to-faac-recipe-for-crisis/amp/ 2 Likes 1 Share |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by airminem(f): 8:13am On Apr 30, 2021 |
When Jonathan wanted to end the subsidy, they kidnapped the then minister of finances mama and threatened to spil her blood on the oil if they attempted to end subsidy. They raged war against Jonathans government. Now its their turn.. Rogues, end subsidy at onces. No more free money! 40 Likes 3 Shares |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by liajosh(m): 8:15am On Apr 30, 2021 |
Use your brain to make things happen be innovative for once. 7 Likes |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by Sunnybay7: 8:19am On Apr 30, 2021 |
Tell CBN to print more money. 17 Likes 1 Share |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by ogododo: 8:30am On Apr 30, 2021 |
Many of una go auction your official quarters. 6 Likes 1 Share |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by sapientia(m): 8:34am On Apr 30, 2021 |
Are we not in crisis? 4 Likes |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by ictjobber: 8:35am On Apr 30, 2021 |
There's a reason why Northerners no dey win any election outside the shores of Nigeria 26 Likes 1 Share |
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Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by SouthSouth1914: 8:35am On Apr 30, 2021 |
APC ran Nigeria to the ground in just 6 years! What a feat 44 Likes 2 Shares |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by opalu: 8:35am On Apr 30, 2021 |
When oil revenue ceases, there are many benefits:- 1. All the Lazy Governors will sit up and be more productive. 2. People wont treat election as do or die due to free money. 3. It is only those who have real solutions that will be attracted to leadership positions. 4. More than 70% of Nigerian Agencies and Parastatals are heavy liabilities. So they will naturally fold up and be scrapped for only those generating profits. 5. Companies will all migrate to only states that are conducive for their businesses. 22 Likes 1 Share |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by Nbotee(m): 8:35am On Apr 30, 2021 |
Make una jus go ahead and increase the price of petrol and stop beating around the bush 1 Like |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by helinues: 8:36am On Apr 30, 2021 |
The person who appointed NNPC portfolio for himself should be held responsible 11 Likes |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by Heavyy: 8:36am On Apr 30, 2021 |
WhatsApp me if interested 0 8o64943297 |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by sylve11: 8:36am On Apr 30, 2021 |
Again. |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by MANNABBQGRILLS: 8:36am On Apr 30, 2021 |
You have just heard that the NNPC said that they will not be able to give money to FAAC. I don’t know the amount of chaos that would cause because most of the states are depending on the Federation Account.” Like seriously?! Is this the way our darling nation will move forward when states will always depend on the Federation Account? Why can't other states emulate Lagos State : the stat of firsts. When Obasanjo stopped paying Monthly allocation to Lagos State Years back, The state economy never collapsed, they even started progressing more and more. Whoever drafted the foolish constitution won't end well. Many things needs to be change. Starting from the power of incumbency rubbish. Nigeria must be great again. 4 Likes 2 Shares |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by Nbotee(m): 8:36am On Apr 30, 2021 |
post=101250271: You have just heard that the NNPC said that they will not be able to give money to FAAC. I don’t know the amount of chaos that would cause because most of the states are depending on the Federation Account.” Becos U Darling Daddy claimed subsidy was a scam and he's now the Chief Scammer considering how he's now using the whole monthly revenue to pay for scam Who's Ya Zaddy Again!! 28 Likes 3 Shares |
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Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by BruncleZuma: 8:37am On Apr 30, 2021 |
As una monthly Niger Delta funded jamboree allowee never enter 3 Likes |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by Taye4j: 8:37am On Apr 30, 2021 |
Bunch of clueless fools. |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by osesology(m): 8:37am On Apr 30, 2021 |
Epistle |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by MANNABBQGRILLS: 8:38am On Apr 30, 2021 |
Nbotee:
Becos U Darling Daddy claimed subsidy was a scam and he's now the Chief Scammer considering how he's now using the whole monthly revenue to pay for scam Incoherent jargons as usual. Waste of time and space. KnocksWe discussed politics with mature and responsible members here, not kids that keep rambling and rambling with insults......okay?! 1 Like 4 Shares |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by PlayerMeji: 8:38am On Apr 30, 2021 |
The same government Father Mbaka said he heard was going to save the world... 1 Like |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by CotenantNIG: 8:39am On Apr 30, 2021 |
Why can't this governor generate income themselves |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by ecolime(m): 8:39am On Apr 30, 2021 |
Nigeria on its knees
They can't generate income because their useless policies keep collapsing businesses.
By the time there is no more money to share at the center, everybody eyes go clear. 2 Likes 1 Share |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by Nbotee(m): 8:39am On Apr 30, 2021 |
post=101250320:
Incoherent jargons as usual. Waste of time and space. Knocks Of cos U'll term it incoherent.. I'll b lying if I expected anything more.. How a govt dat claimed subsidy was a scam is now using up monthly revenue from crude sales to pay for the same subsidy despite claiming to have removed same time and time again over the past year alone. U and ur likes are proof dat having a brain and using it are 2 different things 24 Likes 2 Shares |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by MPESA(m): 8:40am On Apr 30, 2021 |
helinues:
The person who appointed NNPC portfolio for himself should be held responsible Talk am with your full chest ... Call the name of the person.... mention Your pay master name make him terminate your appointment ASAP.... PMB is a disaster. 14 Likes 1 Share |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by arsenal33: 8:41am On Apr 30, 2021 |
It's good. Governors should start working without cheap money. No more printing of naira |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by arsenal33: 8:41am On Apr 30, 2021 |
It's good. Governors should start working without cheap money. No more printing of naira. Obaseki over to you. |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by obailala(m): 8:41am On Apr 30, 2021 |
Centre about to collapse.. |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by Racoon(m): 8:42am On Apr 30, 2021 |
Crisis? Yes! But this is just scared that the rip off they always get from the monthly allocations is about to become an elusive package.Nigeria politicians are wicked. 1 Like |
Re: Bala Mohammed: NNPC Zero Remittance To FAAC, Recipe For Crisis by Lovedbyyou(m): 8:42am On Apr 30, 2021 |
Nnpc is broke |
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