A prominent economist, Prof. Ken Ife, has cautioned that the prolonged delay in issuing the communiqué from the January meeting of the Federation Account Allocation Committee (FAAC) could place significant fiscal pressure on governments across the country.
Prof. Ife, who serves as Lead Consultant on Private Sector Development to the ECOWAS Commission, made this known in an interview with the News Agency of Nigeria (NAN) in Abuja on Wednesday.
According to NAN, the first FAAC meeting of 2026 was held on January 20, yet more than a week later, no official communiqué has been released.
Ife explained that any delay in revenue allocation has far-reaching consequences for the Federal, State and Local Governments, particularly in meeting critical financial commitments.
“Any postponement in revenue distribution creates a chain reaction. It delays the payment of workers’ salaries and obligations to contractors, ultimately slowing productivity and economic activities at the sub-national level,” he said.
He noted that most states and local governments rely heavily on monthly FAAC allocations to fund development projects and recurrent expenditures, including salaries.
“This could lead to acute liquidity challenges for sub-national governments that do not have sufficient alternative revenue sources,” he added.
The economist attributed the delay to possible disagreements over revenue remittances into the federation account, especially involving the Nigerian National Petroleum Company Limited (NNPC Ltd.).
He also identified administrative bottlenecks linked to the implementation of the Fiscal Reform Act 2025, as well as unresolved fiscal policy concerns, including the enforcement of the Supreme Court ruling on local government financial autonomy.
Ife observed that some local governments have yet to meet conditions for direct fund disbursement, such as opening designated bank accounts, forcing allocations to be routed through state governments and weakening the intended autonomy framework.
Additionally, he pointed to delays in the reconciliation and finalisation of financial records on platforms like the Government Integrated Financial Management Information System (GIFMIS) by the Office of the Accountant-General of the Federation (OAGF).
He further cited disputes between state governments and the NNPC over oil revenue remittances—particularly during periods of low production or high operating costs—as another possible factor.
Prof. Ife also expressed concern over what he described as the discretionary waiver of large NNPC financial liabilities to the federation account without adequate consultation with sub-national governments.
He warned that sustained delays in releasing the FAAC communiqué could disrupt fiscal planning and pose broader risks to Nigeria’s economic stability.