The House of Representatives has tasked its Committees on Special Duties, National Planning, and Economic Development to investigate the and utilization of increased allocations disbursed to state governments by the Federal Account Allocation Committee (FAAC).
Additionally, the Committee on Inter-Governmental Affairs has been directed to participate in the investigation and furnish a report to the house within four weeks for further legislative deliberations.
This decision follows the adoption of a motion of urgent public importance by Rep. Ademorin Kuye (APC-Lagos) during the session in Abuja on Tuesday.
Increased FAAC allocation due to subsidy removal
In his motion, Kuye argued that over the past seven months, states and local government areas have seen a significant increase in funds from FAAC following the removal of subsidies.
He noted that in 2023, states and local government areas received N6.57 trillion, which doubled the N3.16 trillion received in 2022. However, despite the surge in revenue, over 14.2 million citizens continue to struggle with poverty.
Kuye pointed out that despite the increased funding, some states still face challenges in salary payments, effective management of public institutions, provision of public transportation, and access to clean water.
According to him, “It is worrisome that some state governors have brazenly refused to complement the Federal Government’s poverty amelioration efforts and are not driving the necessary economic transformation.”
“If the states are doing the needful, that would have reduced the sufferings of Nigerians,”
What you should know
- In the wake of the fuel subsidy removal by the federal government, the FAAC allocation increased significantly. For example, in June 2023, the FAAC allocation rose by about 100% to N1.9 trillion necessitating the President to save the surplus as Infrastructure Support Fund for states.
- Also, the federal government, states and LGAs across the country shared around 51 trillion as exchange rate gain in 2023- a significant rise in the nation’s history.