Nigeria’s Economy In Danger As States Protest Dwindling Revenue

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October 17, 2014.

NewsRescue

By: Ibrahim Olalekan

The meeting between Finance Commissioners of the 36 states and the Minister of State For Finance, Ambassador Bashir Yuguda ended in stalemate as there was no enough cash to share at the Federation Account Allocation Committee (FAAC) meeting under the National Council of Finance and Economic Development (NACOFED).

Reports provided by The Nation newspaper revealed that figures presented by the Minister of State for Finance Ambassador Bashir Yuguda were “inaccurate”. Commissioners present at the meeting also told the minister to “harmonise the figures or tell us if the nation’s economy is in danger”.

A commissioner said last night: “The meeting was cancelled because the figures were very bad as a result of the continuous fall in revenue.”

The states, the commissioner said, “were not ready to give the Minister of State for Finance or the Federal Government the benefit of the doubt”.

Because of the continuous drop in revenue, some state governments recently demanded that the Federal Government should stop making further payments into the Excess Crude Account (ECA).

Another commissioner who attended the meeting said: “Some states are in serious arrears of salary because of the drop in revenue. States like Benue, Edo, Cross River are having problem paying their salaries.

“Oyo State is in crisis and Lagos State is surviving because of its reserve. Ogun State lost N1billion in July and August. Losing this amount every month means there’s crisis in the land.

“People are losing hope. It will slow down economy because governments are the largest employers of labour. Some federal ministries are owing or not paying their salaries as at when due.

“The Federal Government should either stop paying into the ECA and pay our debts first and meet their obligation or there will be crisis.”

The commissioner added that at the last FAAC meeting in Abuja, the minister of state for finance pleaded with commissioners for two weeks grace to bring the demand of the states for augmentation of monthly allocations to be shared to the attention of President Goodluck Jonathan.

The commissioners agreed to give Yuguda the grace period because he is new on the job, but in the last two months, the country had experienced continued revenue shortfall.

The commissioners warned that the Federal Government’s credibility was at stake as many states are battling to meet their basic obligations to their citizens.

Lamenting the situation, Lagos State Governor Babatunde Fashola said yesterday at the 2014 World Food Day/Agric Value Chain empowerment: “As I was coming to this event, I received a message that the monthly Federal Allocation Accounts Committee (FAAC) meeting where states know how much the country earned in the last 30 days and what percentage would be shared between the three tiers of government-Federal, state and local governments-from the Federation Accounts, was postponed because there was not enough fund in the Federation Account. That is the situation of the country’s economy today.”

Fashola explained that no state government could function effectively without a well-structured tax system.

“So, if we are to wait for the monthly federal allocation, we will not be able to provide the dividends of democracy to the residents of Lagos State.

“It was through the money we realised from taxes that we used to provide the empowerment materials for the residents of the state.”

The meeting was however adjourned till next week in Abuja when the minister is expected to bring up an acceptable revenue for sharing.

 

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of NewsRescue
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