Oil Price Crash: States May Get Zero FAAC Allocation in June

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SWITZERLAND, APRIL 22 – Governor Kayode Fayemi of Ekiti state on Tuesday said states may get zero statutory allocations from Federation Accounts Allocation and Fiscal Commission (FAAC) in June this year owing the drastic fall in the price of crude oil.

Fayemi, who is the Chairman of the Nigerian Governors Forum (NGF) also said the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed had disclosed that President Muhammadu Buhari has approved the withdrawal of 150 million dollars from the Nigeria Sovereign Investment Authority (NSIA) Stabilization Fund to support the June 2020 FAAC disbursement.

The governor, who spoke on Channels Television programme, ‘Politics Today’ however said he was not aware that the fund will be released in the next 72 hours.

According to him “I am not aware of any stabilization fund that has been released in 72 hours. What I heard from the Honourable Minister is that $150m has been approved by Mr. President to augment the June FAAC allocation which is likely to be very, very reduced, probably zero”.

“You have seen the difficulty that oil prices are experiencing around the world. So, it is a no-brainer. You don’t need to be a rocket scientist to know that you may not even have N200b to share as FAAC in June”.

“ We are talking of June because oil is sold three months ahead. So, the ones that have been sold before now, they have given us that it is not as bad as it is”.

“But we have FAAC tomorrow, so we will see what comes out of it. I don’t have any expectation that it will be robust as we have experienced in the last three months of the year”.

With the fall in oil price and the Covid-19 pandemic, there are fears among workers of the 36 state governments over the ability of their governments to continue to pay their salaries.

Fayemi, however, said Ekiti state is not owing to any salary at the moment and hopes it will continue paying as at when due in the future.

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