An influential committee, led by Anambra State Governor Charles Soludo, is set to hold its second meeting on Tuesday to advance Nigeria's goal of increasing the monthly cash available for distribution among the three tiers of government by a significant N4 trillion. This massive amount is expected to be attained through the removal of fuel subsidies. The committee will focus on strategies for achieving this goal, with the aim of realizing this figure from July to December 2023 alone, and potentially doubling it for the entire year of 2024.
According to a senior government official familiar with the committee's activities, the Soludo-led team began its crucial work last week after being appointed by the National Economic Council (NEC), chaired by Vice President Kashim Shettima. The committee includes key figures such as the Group CEO of NNPC Limited, the acting governor of the Central Bank of Nigeria, and top officials from the Ministry of Finance, including the Accountant General of the Federation.
In addition to the monthly savings of N400 billion resulting from the removal of fuel subsidies, the committee is also assessing the potential impact of recent changes in the import tariff calculation rates used by the Customs & Exercise department, as well as gains from the significant adjustment in the foreign exchange (FX) rate used to calculate revenue from crude oil exports.
During this month's meeting of the Federation Accounts Allocation Committee (FAAC), the three tiers of government shared a total of N786 billion. However, sources indicate that next month's allocation is expected to nearly double to around N1.4 trillion. This significant increase in FAAC allocation is anticipated to provide a substantial boost to the finances of the various governments, particularly the states, some of which rely on FAAC for up to 90% of their funds. With this additional funding, states are expected to address the pressing issue of unpaid salaries, helping to clear the huge backlog that has left many civil servants in dire financial situations.
The current financial strain has left numerous states unable to meet their obligations, including the timely payment of civil servants' salaries. For instance, civil servants in Benue State received their first paycheck in seven months just last weekend, and many other states are facing similar dire circumstances.
The committee's ongoing efforts signify a concerted push towards bolstering government finances, providing a glimmer of hope for the financial stability and well-being of both the government and its employees.
