US$150 Million Withdrawal: Endorsed by Nigeria’s President from NSIA Stabilization Fund to Support FAAC Allotment

By Abdul Rahman Bangura –

NEW AFRICA DAILY NEWS ( NADN ) Freetown, Sierra Leonne- NIGERIA, President Muhammadu Buhari certified withdrawal of US$ 150 million from Nigeria Sovereign Investment Authority (NSIA) Stabilization Fund to support June 2020 FAAC disbursement.

Zainab Ahmed – Minister of Finance, Budget and National Planning remarked in news-gathering stimulant criteria is in riposte to the novel Coronavirus surge and oil prices fiscal shock in Abuja. She added that the budget was also to handle these arising fiscal threats that the pandemic had inflicted.

She recounted that the Stabilization Fund dealt with for such dilemmas and was to be wielded for this intention, while the government was also sifting additional alternatives to bolster FAAC disbursements over the lesson of the 2020 fiscal year.

The Minister elucidated that, founded on the fiscal speculations underpinning the 2020 Appropriation Act, monthly Federation Account Allocation Committee (FAAC) disbursements to the Federal and State Governments were projected at N888.5 billion.

She furthered, equitable to the considerable decrease in global oil tariffs, FAAC monthly distributions had declined in contemporary months to N716.3 billion in January and N647.4 billion in February 2020.

According to her, their experience shows that monthly average FAAC receipts must average at least N650 billion for the Federal and State Governments to meet their current obligations. Unfortunately, they project that monthly receipts may decline to below N400 billion, over the next three to six months.

“Mr. President has also approved that the Federal Ministry of Finance, Budget and National Planning should engage with the CBN to agree on a Debt and Interest

Moratorium for States on Federal Government and CBN-funded loans, in order to create fiscal space for the States, given the projected shortfalls in FAAC allocations.

“Accordingly, once monthly average FAAC receipts fall below a specific threshold, interest and capital payments by States shall be suspended till monthly average FAAC receipts exceed the threshold.

“The details of this Moratorium will be expeditiously worked out with a view to submitting the final proposals for Mr. President’s guidance and final approvals.

“This intervention is vital to create fiscal space for the States, as they deal with the and economic impact of the crisis. States will also be encouraged to explore similar arrangements for their outstanding debts to Commercial Banks” she explained.

1 United States Dollar = 367.00 Nigeria Naira- April 07/ 2020.

For New Africa Daily News Abdul Rahman Bangura Reports,  Africa Correspondent