Representatives of state governments at the last Federation Accounts Allocation Committee meeting have bemoaned the decision by the Federal Government to save additional revenue for the payment of the new minimum wage......See Full Story>>.....See Full Story>>
This development, which affected their revenue distribution from the federation committee, was received with opposing views when an update on statutory allocation showed that the government transferred a sum of N200bn into the non-savings account at the August FAAC meeting, making a total of N595bn.
The Commissioners of Finance, Akwa Ibom, Dr Linus Noah; Delta, Okenmor Tilije and Ekiti, Akintunde Oyebode raised the observation at the last FAAC meeting held August 16, 2024, minutes of which our correspondent obtained.
At the meeting, it was learnt the committee distributed a total sum of N1.36tn to the three tiers of government, N1bn less than N1.35tn shared in June.
This is despite recording an increase of N13bn between the gross total of N2.61tn in July and N2.48tn in June.
In his opening address, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, applauded President Bola Tinubu for signing the National Minimum Wage Act into law, adding that its implementation will be of immense benefit to all Nigerians.
He further disclosed that discussions were still ongoing on the consequential adjustments.
The minutes quoting the minister read, “Work on the new minimum wage is still in progress, adding that government had continued to dialogue with the organised labour and the private sector with a view to reaching an agreement.”
But after a presentation by a representative from the Office of the Accountant-General of the Federation on the gross statutory revenue and necessary deductions of N1.29tn, the commissioner took turns to question the reasoning for such deduction.
Reacting, the Commissioner of Finance, Akwa Ibom State, Dr Linus Noah faulted the move, stressing that the income should be shared in view of the current financial challenges faced by the states.
Additionally, Dr Noah’s counterpart from Delta State, Okenmor Tilije, disagreed with the proposed idea of saving the money for the benefit of the central government only and asked that it be shared to augment the distributable allocation.
The minutes read, “The HCF, Akwa Ibom State, referred to the provision made in the month for transfer to Non-Oil Savings Account. He proposed that given the financial challenges facing the states, the amount should be used to augment the distributable revenue for the month.
“In addition, the HCF, Delta State, agreed with his counterpart from Akwa Ibom State on the need to share the N595bn in the Non-Oil Savings Account to augment the distributable revenue.”
Responding, the AGF explained that the decision was taken to save for the rainy day and upcoming financial obligations, including payments of the N70,000 minimum wage.
The minutes added, “On the issue of the N595bn, Non-Oil Savings, the AGF advised members on the need to save for the rainy day, adding that the Federal and State Governments might require more funds to meet their future obligations, among which was payment of new minimum wage to workers.”
But reiterating its stance, the Chairman of Commissioners’ Forum/HCF, Ekiti State, Akintunde Oyebode, stated that the authority should have allowed sub-nationals to decide how to use their portions, as they were not benefiting from the interest on the saved funds.
“Commenting, the Chairman, Commissioners’ Forum/HCF, Ekiti State opined that since the Sub-nationals were not benefiting from the interest on the saved amount, they should be allowed to make decisions on what to do with their respective portions,” the minutes added.
He stated that the time value of money was also a factor to consider in deciding to save for a rainy day.
But the Permanent Secretary, Finance Ministry, Lydia Jafiya, who acted as chairman of the meeting after Edun’s departure, while noting the various contributions by members, overruled the discussion and called for the adoption of the revenue distribution for the month.
Recall that President Bola Tinubu signed the new minimum wage into law July 29 after meeting with leaders of the Nigeria Labour Congress and the Trade Union Congress of Nigeria. This was after months of deadlocked meetings.
Although the government is yet to begin implementation, organised labour has called for patience while expressing optimism that the process may be concluded by the end of August. Punch