Account for trillions of FAAC allocations or face legal action — SERAP tells 36 governors, Wike
…As FG, States, LGs share N1.1trn in March
The Socio-Economic Rights and Accountability Project (SERAP) has urged Nigeria’s 36 state governors and the Minister of the Federal Capital Territory, Abuja, Mr Nyesom Wike to “provide our organization with documents on the spending of trillions of FAAC allocations received by your state and the FCT since 1999, and to widely publish any such documents.”
SERAP also urged them “to invite Independent Corrupt Practices and Other Related Offences Commission (ICPC) and Economic and Financial Crimes Commission (EFCC) to jointly track and monitor the spending of FAAC allocations by your state and the FCT and to probe any allegations of corruption linked the allocations.”
SERAP’s requests followed reports that the Federation Account Allocation Committee (FAAC) disbursed N1.123 trillion to the federal, state, and local governments for March 2024 alone. States collected N398.689 billion.
In the Freedom of Information (FoI) requests dated 20 April 2024 and signed by SERAP deputy director Kolawole Oluwadare, the organisation said: “Nigerians ought to know in what manner public funds including FAAC allocations, are spent.”
SERAP said, “Without this information, Nigerians cannot follow the actions of their states and the FCT and they cannot properly fulfill their responsibilities as citizens.”
According to SERAP, “trillions of FAAC allocations received by Nigeria’s 36 states and the FCT have allegedly gone down the drain. The resulting human costs directly threaten the human rights of socially and economically vulnerable Nigerians.”
The FoI requests, read in part: “ensuring that the FAAC allocations received by your state and the FCT are spent to achieve the security and welfare of Nigerians are serious and legitimate public interests.”
“Secrecy in the spending of FAAC allocations received by your state and the FCT is entirely inconsistent and incompatible with the Nigerian Constitution 1999 [as amended] and the country’s international anti-corruption obligations.
“Secrecy in the spending of FAAC allocations received by your state and the FCT also denies Nigerians the right to know how public funds are spent. Transparency in the spending would allow them to retain control over their government.
“The documents should include the evidence and list of specific projects completed with the FAAC allocations collected, the locations of any such projects and completion reports of the projects.
“The documents should also include details of the salaries and pensions paid from the FAAC allocations collected, as well as the details of projects executed on hospitals and schools with the FAAC allocations.
“Despite the increased FAAC allocations to states and FCT, millions of residents in your state and the FCT continue to face extreme poverty and lack access to basic public goods and services.
“The reported removal of petrol subsidy and the floating of the exchange rate by the Federal Government has translated into increased FAAC allocations to states and the FCT. However, there is no corresponding improvement in the security and welfare of millions of Nigerians.
“FAAC allocations received by your state and the FCT are reportedly characterised by mismanagement, diversion of funds, and abandoned projects. FAAC allocations have also been allegedly spent for other purposes such as election campaigns and political patronage.
“Publishing the documents on the spending of FAAC allocations by your state and the FCT would promote transparency, accountability, and reduce the risks of corruption in the spending of the funds.
“Publishing the documents would enable Nigerians to meaningfully engage in the implementation of projects executed with the FAAC allocations collected.
“The report that some 140 million Nigerians are poor suggests corruption and mismanagement in the spending of trillions of naira in FAAC allocations collected by your state and the FCT.
“We would be grateful if the recommended measures are taken within 7 days of the receipt and/or publication of this letter. If we have not heard from you by then, SERAP shall consider appropriate legal actions to compel you and your state and the FCT to comply with our requests in the public interest.
“According to our information, the Federation Account Allocation Committee (FAAC) last week disbursed N1.123 trillion to the federal, state and local governments for March 2024.
“State governments got N398.689 billion while local government councils got N288.688 billion. The mineral-producing states received an additional N90.124 billion (13% of mineral revenue). In February, states collected N336 billion.
“According to the Nigeria Extractive Industries Transparency Initiative (NEITI), the federal, states and local governments shared N10.143 trillion from the Federation Account as statutory revenue allocations in 2023, with states collecting N3.585 trillion.
“SERAP also urges you to provide details of the transparency and accountability mechanisms that have been put in place to ensure that the trillions of naira of FAAC allocations that have been received by your state and the FCT are not embezzled, misappropriated or diverted into private pockets.
“SERAP is concerned about the persistent lack of transparency and accountability in the spending of FAAC allocations by your state and the FCT.
“SERAP notes that Section 15(5) of the Nigerian Constitution requires public institutions to abolish all corrupt practices and abuse of power.
“Section 16(2) of the Nigerian Constitution further provides that, ‘the material resources of the nation are harnessed and distributed as best as possible to serve the common good.’
“Section 13 of the Nigerian Constitution imposes clear responsibility on your state to conform to, observe and apply the provisions of Chapter 2 of the constitution.
“Nigeria has made legally binding commitments under the UN Convention against Corruption to ensure accountability in the management of public resources.
“Nigerians are entitled to the right to receive information without any interference or distortion, and the enjoyment of this right should be based on the principle of maximum disclosure, and a presumption that all information is accessible subject only to a narrow system of exceptions.
“The Freedom of Information Act, Section 39 of the Nigerian Constitution, article 9 of the African Charter on Human and Peoples’ Rights and article 19 of the International Covenant on Civil and Political Rights guarantee to everyone the right to information, including the documents on the spending of FAAC allocations by your state.
“The Nigerian Constitution, Freedom of Information Act, and the country’s anti-corruption and human rights obligations rest on the principle that citizens should have access to information regarding their public institutions’ activities.”
Meanwhile, the Federation Account Allocation Committee (FAAC), at its April 2024 meeting chaired by the Accountant General of the Federation, Mrs. Oluwatoyin S. Madein, shared a total sum of N1,123.391 trillion to the three tiers of government as Federation Allocation for the month of March, 2024 from a gross total of N1,867.808 trillion.
From the stated amount inclusive of Gross Statutory Revenue, Value Added Tax (VAT), Electronic Money Transfer Levy (EMTL), and Exchange Difference (ED), the Federal Government received N345.890 Billion, the States received N398.689 Billion, the Local Government Councils got N288.688 Billion, while the Oil Producing States received N90.124 Billion as Derivation, (13% of Mineral Revenue).
The sum of N69.537 Billion was given for the cost of collection, while N674.880 Billion was allocated for Transfers Intervention and Refunds.
The Communique issued by the Federation Account Allocation Committee (FAAC) at the end of the meeting indicated that the Gross Revenue available from the Value Added Tax (VAT) for March 2024, was N549.698 Billion, which was an increase from the N460.488 Billion distributed in the preceding month, resulting in an increase of N89.210 Billion.
From that amount, the sum of N21.988 Billion was allocated for the cost of collection and the sum of N15.831 Billion given for transfers, intervention and refunds.
The remaining sum of N511.879 Billion was distributed to the three tiers of government, of which the Federal Government got N76.782 Billion, the States received N255.940 Billion, Local Government Councils got N179.158 Billion.
Accordingly, the Gross Statutory Revenue of N1,017.216 Trillion received in the month was lower than the sum of N1,192.428 Trillion received in the previous month of February 2024 by N175.212 Billion.
From that amount, the sum of N46.934 Billion was allocated for the cost of collection and a total sum of N659.049 billion for Transfers, Intervention and Refunds.
The remaining balance of N311.233 Billion was distributed as follows to the three tiers of government: Federal Government got the sum of N133.960 Billion, States received N67.946 Billion, the sum of N52.384 Billion was allocated to LGCs and N56.943 was given to Derivation Revenue (13% Mineral producing States).
Also, the sum of N15.369 Billion from Electronic Money Transfer Levy (EMTL) was distributed to the three (3) tiers of government as follows: the Federal Government received N2.213 Billion, States got N7.377 Billion, Local Government Councils received N5.164 Billion, while N0.615 Billion was allocated for Cost of Collection.
The Communique also disclosed N285.525 Billion from Exchange Difference, which was shared as follows: Federal Government received N132.935 Billion, States got N67.426 Billion, the sum of N51.983 Billion was allocated to Local Government Councils, while N33.181 Billion was given for Derivation (13% of Mineral Revenue) Value Added Tax (VAT), Import Duty, Gas Royalty, Companies Income Tax (CIT) and others increased considerably while Excise Duty, Oil Royalty, Petroleum Profit Tax (PPT), Customs External Tariff levies (CET) and Electronic Money Transfer Lev (EMTL) recorded decreases.
According to the Communique, the total revenue distributable for the current month of March 2024, was drawn from Statutory Revenue of N311.233 Billion, Value Added Tax (VAT) of N511.879 Billion, N14.754 Billion from Electronic Money Transfer Levy (EMTL), and N285.525 Billion from Exchange Difference, bringing the total distributable amount for the month to N1,123.391 trillion.
The balance in the Excess Crude Account (ECA) as at April 2024 stands at $473,754.57.
