allAfrica.com: Nigeria: States Back Stoppage of Dollar Payment (Page 1 of 1)

A few days after President Umaru Musa Yar'Adua stopped the payment of their share of monthly allocations and excess crude proceeds in US dollars as earlier proposed by the Central Bank of Nigeria (CBN), the 36 states of the federation yesterday said they supported the decision for the fact that the dollar is not the nation's legal tender.

Also yesterday, the Federal Government directed the Office of the Auditor General of the Federation to carry out a comprehensive audit of all revenue inflows into the Federation Account from the Nigeria Customs Service, Nigerian National petroleum Corporation (NNPC), Federal Inland Revenue Service (FIRS), and Department of Petroleum Resources (DPR) as well as review the petroleum subsidy account.

Fielding questions from finance correspondents after the monthly meeting of the Federation Account Allocation Committee (FAAC) yesterday at the Ladi Kwali Hall of Sheraton Hotel and Towers, Ondo State Commissioner for Finance and Economic Planning and Chairman of Forum of Finance Commissioners, Chief Tayo Alasoadura, said the states' support for the stoppage of the dollar payment was predicated more on the need to keep the country's pride and independence than pecuniary reasons.

According to him, "We are happy with the decision. We don't want dollar payment because we have raised the issue at the meeting that dollar is not our legal tender. Why should the highest revenue body of the country be paying money in dollar?

"We are degrading our own currency for other currencies. Let us have our money in naira. Anyone that wants to convert to dollar can go to the market to buy dollar. The legal tender of Nigeria is naira and we should be paid in naira. We are all in agreement with the President on this matter.

"Our rejection of the dollar payment is not because of depreciation of the dollar. Our decision is based on the country's pride and our independence. We should be paid in our own legal tender. We don't want dollar payment."

Earlier, while declaring open the FAAC meeting, Minister of State for Finance, Mr. Remi Babalola, said that the issue of payment of statutory allocations to all tiers of Government in foreign currency had been laid to rest following the presidential directive.

"As some of you may already be aware, the President and Commander-in-Chief of the Armed Forces has directed that any plan to disburse Federation Account funds to Federal, state and local governments in foreign currency should be stopped forthwith. With this development, I believe that this matter should be laid to rest," he said.

He added that, "the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) had written the president and my Ministry to express reservations about the proposed policy on several grounds and advising the President to stop its implementation."

Babalola, however said on the order of the President, he had written to the Office of the Auditor General of the Federation to probe all inflows into the Federation Account with a view to ascertaining completeness as well as ensuring the integrity of balances in the account.

The directive, he said, followed series of complaints about non-remittance of accrued revenue by revenue generating agencies.

He said: "I noted at the last meeting that the issue of completeness of revenue being contributed to the Federation Account by the NCS, NNPC, DPR and FIRS was and is still a matter of great concern to the ministry.

"The activities of the Post-Mortem Sub-Committee to post-review completeness of inflows into the Federation Account did not appear to have had the desired effect.

"To arrest the deteriorating situation, and based on Presidential directive, I have written to the Auditor-General of the Federation to carry out a comprehensive audit of all inflows into the Federation Account. Additionally, the Auditor-General will review the Petroleum Subsidy Account, towards ensuring that government funds in this respect are properly utilised."

However, speaking on the review of indices by the RMAFC, he noted that there were plans to implement the indices, which would be used in sharing of the Federation Account.

According to him, "with respect to the implementation of the new indices for revenue allocation recently submitted to the Office of the Accountant General of the Federation (OAGF) by RMAFC, I informed you that I have written Mr. President to intimate him about the situation and efforts being made to implement the new indices.

"I have set up a committee comprising representatives of the Ministry of Finance, Accountant-General of the Federation, National Planning Commission and RMAFC to look at the new indices to ensure equity, fairness and due process before implementation.

"The Committee met several times and recommended that the indices currently in place, that is the 2006 indices, should continue to be applied, while efforts are on to ensure the acceptability of the proposed 2007 indices. It should be noted that we are in sync with the NEC that the indices should be brought to currency as latest as practicable."

After months of work, Babalola disclosed that the National Economic Council (NEC) had adopted the report of the Presidential Committee set up to review the ALGON/Primary Health Centre project. The ALGON/Primary Health Centre project, which involves the construction of a health centre in each of the 774 local governments of the Federation, was the idea of the administration of the former President, Chief Olusegun Obasanjo.

As part of the decisions, he revealed, "the NEC has advised that the balance held with the Central Bank of Nigeria in an escrow account, amounting to N12.7 billion be refunded to the local governments on an equal basis. We are awaiting presidential directive in this respect."

Meanwhile, the amount in the excess Crude Proceeds Account has grown to $13.9 billion as at the end of January this year.

The Accountant General of the Federation (AGF), Ibrahim Dankwambo, who confirmed this to newsmen yesterday at the end of FAAC meeting, said the amount represented an increase of 39 per cent over $10 billion accumulated as at August 2007.

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