Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, yesterday narrated how the federal government rejected a request by governors to borrow N50 billion from the Central Bank of Nigeria (CBN) to augment the revenue shortfall in March for distribution by the Federation Account Allocation Committee (FAAC).
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The minister, who featured on a National Television Authority (NTA) programme, monitored in Abuja, said that was why the federal government found claims by Edo State Governor, Mr. Godwin Obaseki, that it printed N60 billion to augment funds shared to states in March as shocking.
She spoke just as governors lamented the precarious finances of states due to the negative impact of the COVID-19 pandemic on revenue generation, resulting in a 40 per cent drop in their revenues.
The governors, under the umbrella of the Nigeria Governors’ Forum (NGF), have also written Ahmed, asking her to halt the issuance of a promissory note to one Dr Ted Edwards being payment for legal services rendered to the Association of Local Governments of Nigeria (ALGON) in connection with the Paris Club refund.
The minister said rather than grant the governors’ request, the federal government told them to manage the available funds.
She said: “It is a difficult time. I can explain to you how difficult it is not just for the federal government, but also for the states. We see increasing reduction in our FAAC revenue.
“In the month of March, we had a shortfall of FAAC that is almost about N50 billion and we did not have enough accrued in any of those accounts. The states, to be honest, wanted us to borrow from the central bank, but we resisted. We just told everybody to go back to live within what they had.
“So, it was very surprising for us when we heard a sitting governor saying that CBN has printed money for FAAC. That was very unfortunate because it is not true.”
The minister said whenever there was reduction in federal allocation, the federal government resorted to taking from some reserve accounts, adding that in the case of March allocation which fell by N50 billion, all the state governments were asked to manage their resources.
Responding to a question on how the economy was faring, she said the economy was stabilising from the recession that happened in the third quarter of 2020.
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