• Thursday, March 28, 2024
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States’ continued reliance on FG risky, unsustainable, say Sanwo-Olu, Ahmed

Babajide Sanwo-Olu

Governor of Lagos State, Babajide Sanwo-Olu and minister of Finance, Budget and National Planning, Zainab Ahmed, have warned that the continued reliance of Nigerian component states on the Federal Government for economic sustenance is risky and unsustainable.

They stated this at the opening of Federation Account Allocation Committee (FAAC) retreat in Lagos on Monday, saying that the states must devise ways of shoring up their internally generated revenue (IGR) for self sustenance.

The theme of the retreat was “Efficient Federation Revenue Allocation as a Nexus for National Economic Diversification.”

Sanwo-Olu, who was represented by his deputy, Obafemi Hamzat, said each of the states needed to diversify its revenue sources rather than waiting on Federal Government for monthly allocation.

Sanwo-Olu also encouraged the Federal Government to look beyond oil revenue by diversifying into agriculture and other sectors of the economic.

“We must also do anything we can to boost revenue along the line of manufacturing. It is important every state first look for ways to diversify. We must reduce our dependence on federal allocation,” said Sanwo-Olu.

Describing the FAAC as one of the most important national institutions due to the critical nature of its responsibilities, Sanwo-Olu said there was the need for fair and just revenue-sharing formula, for the component states to achieve a meaningful diversification and sustainable growth in IGR.

Also to make revenue sharing formula fairer, equitable, and more development-oriented, he suggested the need to attach increased value to population density as a critical factor, in addition to the nominal population figure.

Minister of finance, budget and national planning, Zainab Ahmed, represented by the permanent secretary in the ministry, Mahmud Dutse, noted that the Federal Government had embarked on policies and measures to improve the fiscal health of the country.

“To the states, these measures include various financing options in form of bailout funds, budget support facility, relaxation of conditions for borrowing and ease of doing business.

According to Ahmed, over the years, the Federal Government had been committed to efficient management of the nation’s   resources through fair, just and equitable distribution of revenues accruable to the federation account to the three tiers of government as monthly statutory allocations.

She, however, expressed concern that states have relied largely on federal allocations to finance their budgets, describing it as risky and unsustainable.

She urged the government to take the issue of diversification of sources of revenue at national and sub-national levels seriously, plug leakages and ensure effectiveness in revenue collection.