The recent commercialisation of the Nigerian National Petroleum Corporation by the Federal Government, according to Dr Ikenna Nwaosu, a member of the Nigerian Economic Summit Group (NESG), may impact public finances.
If the NNPC stopped making contributions to the federation account, according to Nwaosu, there would be enough money to distribute among the three levels of government.
However, he warned that a severe economic collapse might occur in the upcoming part of the year if something drastic was not done.
“If something drastic is not done, there could be a major collapse in the economy by the coming quarter. This is so because, going by what the World Bank said and the statistics released last week, the economy might be in danger of collapse if nothing is done. I am unsure whether NNPC will be able to contribute to the Federation Accounts Allocation Committee account since it is now a private company. So if it doesn’t contribute to the federation account, we won’t have enough money to share across the three tiers of government. So that is something the government needs to address.
“Finally, on the interest rate matter, the Central Bank of Nigeria is doing something about it, but how sustainable I cannot tell. So these are my views and I believe the government must act now.”
Bizwatch recalls that the Nigerian National Petroleum Company Limited made it clear during its unveiling last week that it would no longer send money to the Federation Accounts Allocation Committee monthly for distribution to the three levels of government.
It claimed that this was predicated on its most recent conversion from a public corporation to a limited liability business and that it owed FAAC nothing because the old corporation, not the new oil firm, was responsible for all outstanding debts to the committee.
As the NNPC Limited was formally introduced, President Muhammadu Buhari proclaimed that the new organisation would now be exempt from institutional restrictions.
