State governments have criticized the Federal Government’s decision to save additional revenue for the payment of the new minimum wage, leading to a reduction in their revenue distribution from the Federation Accounts Allocation Committee (FAAC).
During the FAAC meeting on August 16, 2024, the Federal Government transferred N200 billion into the Non-Oil Savings Account, raising the total to N595 billion.
This move drew opposition from state representatives, who argued that the funds should be distributed instead, citing financial challenges.
Akwa Ibom’s Commissioner of Finance, Dr. Linus Noah, and his Delta counterpart, Okenmor Tilije, called for the N595 billion to be shared among states to augment their distributable revenue.
However, the Accountant-General of the Federation defended the savings, stating it was necessary for future obligations, including the payment of the new N70,000 minimum wage.
Ekiti’s Finance Commissioner, Akintunde Oyebode, further argued that states should have the autonomy to decide how to use their portions of the revenue, as they do not benefit from the interest on the saved funds.
Despite these objections, the revenue distribution was ultimately adopted.
The disagreement comes as the government works on implementing the National Minimum Wage Act, signed into law by President Bola Tinubu on July 29, 2024.
While implementation is still in progress, the Nigeria Labour Congress has urged patience, expecting the process to conclude by the end of August.
