Between June 2015 and July 2016, Nigeria spent a whooping N1.4 trillion in intervention funds on the 36 states of the country, our investigations show.
The Federal government first allotted NLNG dividend proceeds amounting to N414 billion to the states in July 2015, after which, in September 2015, the Central Bank of Nigeria (CBN) extended another N338 billion in salary bail-out funds to the states to enable the latter clear a building backlog of debt owed to workers.
Soon after, still in September, came a N567 billion debt restructuring loan for FGN bond asset-swap by the Debt Management Office (DMO) and a N90 billion conditional budget support facility (MoF) in June 2016.
The total amount of these bail-out facilities is N1.4 trillion, a third of the country’s total revenue forecast for 2016.
Most of the states are liabilities to the Federal government and depend on monthly government allocations for survival, according to Ayo Akinwunmi, head of research at FSDH Merchant bank.
“There is need for the states to look inwards and grow their internally generated revenues,” said Taiwo Oyedele, head of tax and regulatory services at PWC.
“They can attract investments and create jobs for their people, by giving incentives like tax relief for willing investors, otherwise they will remain a strain on the federal government’s finances,” Oyedele said.
The thirty-three insolvent states in Nigeria generated an average monthly revenue of N126.59 billion and incurred average monthly expenditure of N185.55 billion, according to Budgit data.
“The Federal government must desist from spoon-feeding the states so that they can be more independent and commercially viable,” said Kyari Bukar, the CEO of private think-tank the Nigerian Economic Summit Group (NESG).
LOLADE AKINMURELE
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