36 state govs call for immediate review of revenue formula

 WORRIED about  the economic situation in the country where 18 states of the federation cannot pay workers salaries, all the thirty- six state governors yesterday resolved to forget  their differences and decided to meet with President Muhammadu Buhari for an urgent review of the revenue formula and address the problems precipitated by it.

                                   

The governors noted that it became imperative to work with the President because the issue of dwindling resources was not a state government problem alone, but an issue that has serious national impact.

The governors agreed that the Federal Government should have 52 percent allocation of the national resources while states should have 36 percent to enable them concentrate on the development of their various states.

The current revenue formula stand as Federal Government – 52.68 per cent; State – 26.72 per cent and Local Government – 20.60 per cent.

The states also resolved to set up bodies that would help fish out where their predecessors “hid the resources accruing to the states from the federation account.”

Reading a communique at the end of the Nigerian Governors’ Forum (NGF) which lasted over four hours, chairman of the body and governor of Zamfara State, Alhaji Abdullazeez Yari, who disclosed that they will meet with the president to hand over to him, their template towards resolving the problem, warned that if nothing urgent is done to block the loopholes, the country would be plunged into greater crises.

The NGF had series of disagreements with former President Goodluck Jonathan on issues, especially the excess crude oil receipts, revenue receipts from the Nigerian National Petroleum Corporation (NNPC), Sovereign Wealth Fund and dwindling national revenue resources to the federation account.

On whether the Forum discussed the issue of non-payment of salaries and other financial problems, Yari said: “Well, we discussed that extensively, and we are trying to see that we find a lasting solution to it. The Federal Government is also affected, so it is a problem of the entire nation. Therefore, we are going to send the communiqué to the president so that we can get a lasting solution to it.”

Also speaking with journalists after the meeting, Governor Adams Oshiomhole of Edo State called on President Buhari to block all the leakages and then go after those he alleged to have stolen the country’s fund and force them to return what they have taken unlawfully from the national purse.

He said: “I think the media is not being accurate, the country is bankrupt, not just the states. The Federal Government’s finances are even worse, considering that they borrowed over N4 trillion. The entire funds for pension scheme have been drawn down by the Federal Government. It is because they borrow at will that you can’t seem to see that they are also bankrupt

On the way forward, the governor said: “What people don’t look at is that oil price is dropping. It is not the drop in oil price that is causing the crisis, it may have accentuated it, but it is not the primary cause. Even at $60 per barrel we could do a lot better if so much hasn’t been stolen, first under the so-called excess crude, direct stealing in the guise of subsidy, and stealing from excess crude to fund all kinds of things.

“We have various agencies, treasuries are empty. So, it is not because of the drop in oil price. The real way forward is for the new government to block all the leakages and then those who have taken it to return what they have taken unlawfully from the national purse.

“There will be enough even at $60 to keep Nigeria going. Government’s primary purpose is not just to pay salaries. Salaries are as a result of work and that work is people delivering services which is what the civil service is meant to do. We have to talk about government meeting its obligation to the people which of course include the payment of salaries.

There is urgent need to stop the stealing and get those who have taken to vomit. For example, if you say you have $2.6 billion in excess crude account, we know that by May 2013 you had more than $10.5 billion in the excess crude account and now there has been no distribution to states.

“We expect that the excess crude must have appreciated. So why has it gone down to $2.5bn, when and for what? These are issues that need to be addressed and we must stop the bleeding. Obviously as they say no nation earns enough to meet the greed of leaders, but we earn enough to meet the legitimate need of our people. So. if we are not able to meet the need, it can’t be explained by drop in price.

“You recognise as media people that oil dropped to $9 under Gen. Abdulsalami Abubakar, but salaries were being paid. So it is not about price, it is about very huge theft of public funds.

“In Edo State, we are up to date in the payment of salaries, we paid for May even before May 29, so we are paying not because we are rich, but I do appreciate that they have worked and deserve their pay. The payment of salaries is a legal obligation.”

Present at the meeting were Governors of Taraba, Anambra, Ondo, Bauchi, Enugu, Katsina, Sokoto, Akwa Ibom, Kwara, Kano, Lagos, Osun, Imo, Benue, Edo, Adamawa, Niger, Ebonyi, Abia, Zamfara, Nasarawa, deputy governors of Plateau, Delta and Borno.

Meanwhile, the National Bureau of Statistics (NBS) yesterday published a report indicating that the affected states have not been able to grow their internally generated revenue (IGR) significantly in recent years culminating in adverse budgetary performance in 2014.

Statutory allocations to all the tiers of government had fallen by over 30 per cent in 2014 due to sharp drops in revenue accruing to the federation account as a result of decline in the price of crude oil, Nigeria’s main source of public revenue.

With over 30 per cent decline in statutory allocations coming against marginal or no increase in IGR and coupled with sustained overheads on political office holders, the states found themselves in negative cash flow.

Most economy observers believed that government finances were destabilised due to undiversified revenue sources, especially weak performances of the states in IGR.

Consequently, the states’ workers are left with the fall out as their salaries are in arrears for between two and seven months in 18 states.

With exception of Ekiti which was the best performing in terms of increase in IGR in 2014 at over 58 per cent rise from N2.33 billion in 2013 to N3.46 billion in 2014, and two other states, all the other 15 states had either marginal increases or outright decline in their IGR performance in 2014.

The other two states with significant increase in their IGR according to NBS report are Kogi and Osun states. In 2014 Kogi increased its IGR by over 25 per cent to N6.56 billion from N5.02 billion in 2013 while Osun though has one of the worst cases of salary arrears, increased its IGR to N8.51 billion from N7.28 billion in 2013.

Ten of the salary owing states managed to increase their IGR by a paltry 1.2 to 2.3 per cent against over 30 per cent decline in their statutary allocations.

Some of the states, according to the NBS statistics, include Akwa Ibom, Imo, Oyo and Rivers States. Akwa Ibom and Rivers which are amongst top ten beneficiaries of statutory allocations could only increase IGR by paltry 1.8 and 1.2 per cent respectively while Imo and Oyo managed to do about 7.0 per cent increases.

Some of the states in outright negative performance in their 2014 IGR according to the NBS report includes Bauchi and Benue states.

All the states governed by All Progressive Congress (APC) are asking the federal government to assist them in paying their worker’s salaries due to the revenue crises.