Buhari Orders $150m Withdrawal From NSIA to Augment FAAC Disbursement

President Muhammadu Buhari has ordered the disbursement of $ 150 million from the National Sovereign Investment Authority (NSIA).

Zainab Ahmed, Minister of Finance, Budget and National Planning, told reporters in Abuja on Thursday.

Ahmed said the withdrawal would be made from the NSIA’s stabilization fund to increase disbursements from the federation’s account allocation committee to the three tiers of government.

“Monthly disbursements from federation accounts to federal governments and the state government are ideally projected at N888 billion. Due to the significant drop in oil prices, FAAC’s monthly disbursements have dropped in the past few months to 716 billion in January, N647 billion in February and even more to N581 billion in March 2020,” she said.

“Our experience shows that FAAC’s average monthly receipts should be N650 billion to allow the federal and state governments to meet their current obligations in a healthy manner.

“Unfortunately, we project that monthly receipts could fall as low as N400 billion over the next three to six months. To address these emerging fiscal risks, the president approved the withdrawal of $ 150 million from the Nigeria Sovereign Investment Authority stabilization fund to support FAAC disbursements in 2020.

“The fund was created for these emergencies and should be used for that purpose”.

Ahmed said the federal government is exploring other options for increasing FAAC disbursements over the year.

The three tiers of government generally rely on FAAC disbursements and the revenue generated internally to meet obligations such as salary payments.

The NSIA stabilization fund represents 20% of the assets held by the authority.

A description of the fund on the NSIA website says the fund will provide “support for stabilizing the federation’s revenue in times of economic stress”.