Rising debts: States will seek FG’s bailout deal – FAAC commissioner

The State Governments may request a bailout from the Federal Government after debts spirals out of control, the Chairman, Forum of Commissioners, Federation Accounts Allocation Committee, Timothy Odah, has said.
Odah made the disclosure when he addressed newsmen after the monthly FAAC meeting, which distributed two months revenue to the three tiers of government in Abuja on Friday.
He said several states were indebted to contractors and the dwindling revenue from Nigeria’s oil and non-oil earnings had exacerbated the problems.
“The year is almost ending, most states owe contractors and they are causing problems,” he said.
Odah also called on the Central Bank of Nigeria to review its monetary policy that mandated states to deposit 50 per cent of public accounts with the apex bank.
He criticised the new policy, saying: “It is very demoralising and affecting the states so much.
“The compulsory deposit of 50 per cent has heightened the coupon rates on facilities taken by the public offices or states especially.
“We have interest rates going up to 20 per cent to 24 per cent and this is not good for the states.
“The policy is giving us a very harsh experience.
“Banks are not giving us facilities because of the Federal Government policy that requests banks to get clearance from the Federal Ministry of Finance before giving facilities to states.”
Odah, who is the Commissioner for Finance in Ebonyi State, thanked the Federal Government for increased allocation to security in the wake of insurgency and terrorism in the country.
He said security allocation in some states had taken a large part of public funds and that had created problem for other sectors.
“Security now takes 25 per cent of the budget in most states,” he said.
On the crisis in FAAC over shortfall in allocation, Odah said though some of the issues had been resolved, “the problem is far from being over”.
He said allocation for the months of August and September were shared at the Friday FAAC meeting to the three tiers of government.
He said the moratorium on augmentation was reflected in the distribution as FAAC would, henceforth, share the actual and not budgeted revenue to the tiers of government.
The forum chairman told newsmen that in the past four months, the FAAC meeting had not received the forensic statement of accounts from the Post Mortem committee.
He added: “For the past four months, the postmortem committee of FAAC suspended its work because of the nationwide tour of the Revenue Mobilisation, Allocation and Fiscal Commission.
“In view of that, we are not receiving the forensic statement of accounts from the post mortem committee.
“At the same time, we have asked the Minister of Finance (Dr. Ngozi Okonjo-Iweala) to consider bringing in PPPRA into the forum of FAAC so that conflicting statements would be ironed out.”
Odah said the present revenue challenge of the country was a clarion call for all tiers of government to be less dependent on revenue from oil, but move toward economic diversification.
The forum chairman advised states to focus more on the priority areas of their budget after the payment of salaries.
Earlier on Friday, the Federal, States and Local Governments shared N1.25 trillion from the Federation Account for August and September.
A breakdown of the amount showed that the Federal Government received N236.15 billion, States N119.78 billion, while Local Governments got N92.34 billion for September.
For August, the Federal Government received N248.27 billion, States N125.92 billion and Local Governments N97.08 billion.