Bail-out Fund: FG deducts N122bn from 35 states’ FAAC share in 7-months -NBS
Motolani Oseni
The Federal Government (FG) deducted an accumulated sum of N122.4 billion from the monthly allocation due to thirty-five (35) states in Nigeria between January and July 2019, the monthly Federal Account Allocation Committee’s (FAAC) report released (year-to-date) by the National Bureau of Statistics (NBS) has shown.
While providing details on the item, the NBS noted in its report that the other deductions include National water rehabilitation projects, National Agricultural Technology Programme, Salary Bailout, Payment for Fertilizer, State water supply project, State Agricultural Project and National Fadama Project.
Other deductions: According to the NBS report, Osun State tops the list of states that recorded the highest deductions across the 35 states (excluding Lagos).
Specifically, most states in Nigeria largely depend on loans for developmental projects while the federal government had earlier given states bailout funds between 2015 and 2017 to pay workers’ salaries.
Meanwhile, on a month-to-month basis, the Federal Government deducts stipulated amounts from the statutory allocation to the state government.
Osun State parted with N10.3 billion within January and July 2019.
Ogun, Delta, Bayelsa and Akwa-Ibom made the top states with the biggest deductions.
Lagos State remitted no fund under this category, as this may be due to the fact that the state did not receive bail-out fund from the FG in 2016.
Bail-Out Fund: FG deducts N122 billion from states’ account in 7-months [Full-List]
On the sideline, further analysis of the data obtained from the NBS shows that the sum of N21.98 billion was deducted from the monthly allocation entitled to states between the period of January 2019 and July 2019. This is categorised as “external debt deductions”.
While Lagos did not partake in the other deductions category, the State leads in external debts’ category. This may be due to the high debt profile of the state. An earlier report on the states’ debt profile shows that Lagos topped the debt profile list.
Other states that rank high include Rivers, Kaduna, Oyo, Bauchi and Cross-River.
The Bottom Line: As earlier revealed in an earlier publication, the Federal Government declared its readiness to recover the N614 billion budget support (bail-out fund) given to states, as a committee to facilitate the recovery is already being constituted.
From the analysis, it is clear that the bail-out earlier funds given to states are already being frequently deducted, however, in bits.
This further explains why some states are still in financial strain, as the Internally Generated Revenue and monthly allocation cannot meet their huge obligations.
