Federal allocation may come to zero soon, KWIRS warns states, LGs

Having observed the ever increasing fall in the revenue of Nigerian states from the federation account, coupled with the ceaseless vandalism and attacks on oil and gas pipelines, Muritala Awodun, chairman, Kwara State Internal Revenue Service (KWIRS), has foreseen that the federal allocation might come to zero.

Awodun, who spoke in an interview with BusinessDay in Ilorin, the Kwara State capital on Wednesday, said states and local government councils should begin diversification of economies and aggressively drive ‎revenue generation and administration in their various domains as panacea, since all indications were pointing to the probability of zero federal allocation.

Speaking against the backdrop of revenue drive and financial re-engineering currently undertaken by the Abdulfattah Ahmed-led administration in the state, Awodun said the parlous situation of Nigerian economy had taught Kwara State a big lesson, which had impacted positively on its revenue.

States and local government areas can be successful and not crippled financially, if only urgent measures are taken to forestall the bad days ahead, he said.

He said: ‎”The Kwara State government identified the need ‎for us to change the process of revenue mobilisation, and this was borne out of the fact that the federal allocation will continue to nosedive and probably come to zero as we go along. If we don’t restructure the arrangement of ownership of resources in Nigeria, then it will be worse for the states, because I see federal allocations going to zero. “So, what a state like Kwara saw clearly is the need to begin to look inwards and re-arrange how revenue is gathered together.

“This is what we can say, we borrowed from Lagos. Lagos, as we all know during the government of Bola Tinubu, did this when they started local council development areas and the problem they had with President Obasanjo, they were financially crippled. They say necessity is the mother of all inventions, and they had to come out of this through this re-arrangement, which created Lagos State Internal Revenue Service, and they have done so well from that time, moving from N800 million monthly to N23 billion monthly.

“So, it is a worthy example for any states to follow. This situation as it is now, warrants us to rearrange, that is exactly what His Excellency, Governor Ahmed did for us.”

While speaking on the revenue target of the state through KWIRS, the chairman said the service target N34 billion revenue for 2016, as against N7.2 billion revenue made in 2015, adding that a lot of re-arrangement and re-branding had been done since December 2015 to improve the services and revenue generated by KWIRS.

He said, “We met the state at N7.2 billion, that was the total IGR collected for 2015, and we set a target of N24 billion for ourselves in 2016. The budget moved to His Excellency‎ and after interacting with us, that budget moved to N29 billion, but when we also engaged State House of Assembly in considering the budget, it moved to N34 billion.

“So, what was approved by Kwara State House of Assembly was N34 billion. But, we also made the House to know that we are holding 70% which is N24 billion; we said we should be held responsible for 70%, because we know that we are moving from N600 million monthly budget performance to N24 billion, which is about N2 billion monthly budget ‎performance.”