Governors are seeking an amendment of the revenue allocation formula to increase their revenue base.
This, they believe, is the way out of the states’ financial crisis.
The states share 26 per cent of the revenue in the Federation Account. The Federal Government takes 52 per cent.
Yesterday at a meeting with President Muhammadu Buhari at the Villa, the proposal was tabled.
But the President was concerned that
that nearly two-thirds of states are still having difficulties with
salary payments despite the bailout funds provided to them by the
Federal Government.
The President made the remark in his
speech at the meeting, according to a statement by his Senior Special
Assistant on Media and Publicity, Mallam Garba Shehu.
The statement added that to ameliorate
the hardship being faced by workers, the President said that the Federal
Government will make more funds available to the states by expediting
action on refunds due to them for the maintenance of federal roads and
other expenses incurred on behalf of the Federal Government.
He also said he will establish an
inter-ministerial committee to study the Fiscal Restructuring Plan for
the Federation, which was presented to him by the governors.
The committee will review the plan to
improve the finances of state governments and make recommendations on
how proposals in the plan should be dealt with by the Presidency, the
Federal Executive Council and the National Assembly through legislation.
President Buhari urged the governors,
however, to understand that while he was ready to do all within his
powers to help the states overcome their current financial challenges,
the Federal Government also has funding problems to contend with.
“You all know the problems we have found ourselves in. You have to bear with us,” he told them.
Nigerian Governors Forum (NGF) Chairman
Abdulaziz Yari (Zamfara) and Nasir El-Rufai (Kaduna), who chaired the
committee that worked on the Fiscal Restructuring Plan, asked the
Federal Government to do more to help the states financially.
The governors told the President that
while they had resolved to take other measures to boost their
internally-generated revenue, the implementation of the Fiscal
Restructuring Plan will help them to deal with their funding problems on
short, medium and long-term bases.
They said that if the plan was adopted
and implemented by the Federal Government, states will become more
financially empowered to fulfill their constitutional responsibilities.
Speaking with State House correspondents
at the end of the meeting, Yari called for an amendment of the sharing
formula to increase revenue to state.
According to him, it is impossible for
state governments to save for the rainy day, with the current 26%
allocation to states and 52% to the Federal Government.
On the allegation that Finance Minister
Kemi Adeosun blamed state governments for their current financial crisis
due to their inability to save, Yari said: “The states are only taking
26 per cent, whereas the Federal Government is taking 52 per cent and
you are asking us to save?
“Anyway, I doubt if the Minister made
that statement or it is coming from the media. The truth remains that
the states are taking 26 per cent and the Federal Government 52 per
cent; what are they doing with the money?
“We are not sovereign; so, how can we
save? We are dealing with our different states’ economy, which we are
trying our best to fix. Most times, we are busy shouting that what is
supposed to be given to us has not been given. For the past three years,
we have been asking them to show us if the excess crude has been used
judiciously or not.
“So, the question of saving or not does not arise.”
Noting that the meeting is about the economy, Yari said the governors passed state-by-state demands to the Federal Government.
He said: “You will agree with me that states are the landlords; we own the land
and the people. So, therefore, the
economy of this country lies in the state. Everything comes from the
state, the oil, agricultural produce, mining and people are in the
states while the Federal Government is in Abuja.
“So if any state has any issues and is
known to Mr President, I doubt very much if he will be able to sleep
with his two eyes closed.
“We are closer to the people and have
many challenges in the states. Today, we have received support from the
Federal Government in terms of bailout, restructured our debts, given us
15% of the Excess Crude Account for development.
“All these are temporal measures. Each state has a programme right from
short to mid and long term, which we
presented to Mr. President and he graciously accepted and he plans to
put a committee in place that would look at the matter starting with
short term.
“For the short term, we are looking at a
situation whereby our refunds that are hanging since 2005, right from
Obasanjo’s exit of the Paris Club, some of the monies that were not
paid, so that the states that are having difficulties can get money from
there.
“Loan restructuring, bailout and ECA; we
are asking for 18 months moratorium before we can start paying, so that
we would be able to strategise.
“To develop IGR is not overnight; it is a
long term programme that one has to plan for. And also, our workforce
has increased and there is nothing we can do about it because people are
getting their daily bread from there and we cannot say we are going to
cut salaries and wages.
“We have to find a solution, otherwise,
we would keep going back and forth because you will not achieve anything
as oil been sold for $100 per barrel is now selling for $28 and $31.”
“So we have devised a plan for short term, medium term and long term. These are part of short term.”
posted by Oscar Jonathan
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