State government representatives at the recent Federation Accounts Allocation Committee (FAAC) meeting have expressed dissatisfaction with the Federal Government's decision to save additional revenue for the payment of the new minimum wage. This move, which impacted the revenue distribution from the federation, was met with resistance from several state finance commissioners.
During the August 16, 2024, FAAC meeting, it was revealed that the government transferred ₦200 billion into the Non-Oil Savings Account, bringing the total savings to ₦595 billion. This development was met with opposing views from the Commissioners of Finance for Akwa Ibom, Delta, and Ekiti states.
The meeting saw the distribution of ₦1.36 trillion to the three tiers of government, slightly less than the ₦1.35 trillion shared in June, despite an increase in gross statutory revenue. The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, in his opening remarks, praised President Bola Tinubu for signing the National Minimum Wage Act into law and emphasized ongoing discussions regarding consequential adjustments.
However, the decision to save a portion of the revenue was questioned by Dr. Linus Noah, the Commissioner of Finance for Akwa Ibom State, who argued that the funds should be distributed to the states to address their financial challenges. Delta State's Commissioner of Finance, Okenmor Tilije, also disagreed with saving the funds, suggesting that the money should be shared to augment the distributable allocation.
The Accountant-General of the Federation defended the decision, stating that the savings were intended for future financial obligations, including the payment of the new ₦70,000 minimum wage. Despite this explanation, the Chairman of the Commissioners’ Forum, Akintunde Oyebode from Ekiti State, reiterated that sub-national governments should have the autonomy to decide how to use their portions of the funds, especially since they do not benefit from the interest on the saved amount.
Further into the meeting, state finance commissioners raised concerns about the Nigerian National Petroleum Company Limited's (NNPCL) transparency and its indebtedness to the federation. The commissioners called for NNPCL to conduct its transactions independently and be more accountable in its operations.
The FAAC meeting concluded with the Permanent Secretary of the Finance Ministry, Lydia Jafiya, overruling the discussion on the savings and adopting the revenue distribution for the month. Meanwhile, the implementation of the new minimum wage, signed into law by President Tinubu, is still under discussion, with organized labor expressing hope that the process will be completed by the end of August.
