June salaries of federal and states civil servants across the country may not be paid on time as the Federation Account Allocation Committee (FAAC’s) technical session which held yesterday was abruptly adjourned on account of Nigerian National Petroleum Corporation (NNPC) failing to make accurate returns to federation account.
Yesterday’s adjournment the third since March this year, followed another incident in April and now June. Journalists duly invited for the monthly FAAC press briefing who were waiting for the outcome of the meeting were informed that the briefing had been rescheduled for a later date.
Neither the Chairman, Commissioners for Finance Forum, Mahmoud Yinusa, nor any other FAAC member could brief the media on what played out.
Meanwhile, a top government source said the recurring revenue disagreement between the States and the NNPC has been presented to the Presidency for resolution once and for all.
Those who attended the FAAC meeting could be heard discussing in low tones, and urging the NNPC should carry the States along in its dealing rather than operating in insolation.
In the March adjournment, the bone of contention was a N100 billion shortfall that was detected from NNPC’s declared revenue.
It took the intervention of Minister of Finance, Mrs. Kemi Adeosun, to reach out to the 36 states Governors to direct their respective Commissioner of Finance to accept February revenue shared in March.
Meanwhile, the Federal Government hinted it is planning to raise $2.8 billion of debt offshore as part of its 2018 budget and will explore all options to lower borrowing costs, the Director General of the Debt Management Office (DMO), Patience Oniha, told Reuters. The government has laid out plans to borrow offshore even though interest rates are rising in the United States which could see Nigeria pay a higher premium on this occasion compared with its most recent debt sale in February.
Nigeria which exited recession last year, approved a three-year plan in 2016 to borrow more from abroad so that 40 percent of its loans would come from offshore in an attempt to lower borrowing costs. It now has around 23 percent of its debt from offshore sources, up from 16 percent when it approved the plan.
The Debt Management Office has sent a request for a proposal to banks for an international bond offering, IFR reported, citing sources.
“We will explore all options keeping in mind our twin objectives of extending the tenor of the debt stock and lowering costs,” Oniha said.
The National Assembly needs to approve the new borrowing before it could be launched. Oniha in January, said the DMO could tap capital markets or concessionary loans from the World Bank and would consider funding options after the 2018 budget had been approved.
Just last week, President Muhammadu Buhari signed a record N9.12 trillion budget for 2018 into law, aimed at fostering economic growth before elections next February.
Growth rates in Nigeria have bounced back since the third quarter of 2016, when a recession, its first in 25 years, hit bottom although observers see the trajectory as being rather weak.
However, Nigeria’s growth slowed in the first quarter of 2018 for the first time since pulling out of recession as its non-oil sector struggled.