ABUJA – Governors of the 36 states of the federation, Thursday, pushed for a new fiscal restructuring plan due to the present economic realities in their states, which had made it impossible for them to pay workers’ salaries. This is despite bailout funds advanced by the federal government to the states a few months ago.
The governors, acting under the aegis of Nigeria Governors Forum, NGF, made the proposal at a meeting with President Muhammadu Buhari at the Presidential Villa in Abuja.
They pushed for a new revenue allocation formula and handed over to the President a Fiscal Restructuring Plan for the Federation.
As the governors were putting forward their proposal, President Buhari expressed regrets that despite the bailout funds released to the states, 24 of them could still not pay workers salaries, saying the situation was of great concern to him.
The President, who shared the concern of the governors, however, said the Federal Government would quicken action on refunding monies spent on federal infrastructure by the states. He also promised to set up an inter-ministerial committee to enable him study the document.
According to the President, the committee will review the plan to improve the finances of state governments and make recommendations on how proposals in the plan should be dealt with by the Presidency, the Federal Executive Council and the National Assembly through legislation.
He also reminded the governors that though the Federal Government had plans of rescuing the states, it also had its own financial challenges.
“You all know the problems we have found ourselves in. You have to bear with us,” he said.
Speaking to journalists at the end of the meeting, Chairman of the Governors Forum, Governor Abdulaziz Yari of Zamfara State, said that the review of the allocation formula became imperative in view of dwindling oil prices.
Reminded of a report that the governors were not saving, a situation which had caused the present economic quagmire, Yari said that it was impossible for the states to save when the Federal Government was taking 52 per cent and allocating a paltry 26 per cent to the states.
He stated that the Federal Government had agreed to refund part of monies spent on infrastructure, adding that what was more important to them was the implementation of the new plan to enable states meet their fiscal challenges.
He said: “The meeting is about the economy. We deliberated among our colleagues and we did say we would pass our demands to the Federal Government to look at demands per state.
“You will agree with me that states are the landlords. We own the land and the people, therefore, the economy of this country lies in the states. Everything comes from the states- the oil, agricultural produce, mining and people are in the states, while the federal government is in Abuja.
“Therefore, if any state has any issues and is known to Mr President, I doubt very much if he will be able to sleep with his two eyes closed. We are closer to the people and have many challenges in the states.”
Bailout funds, restructured debts, temporary measures
“Today, we have received support from the Federal Government in terms of bailout, restructured our debts, given us 15% of the Excess Crude Account for development.
“All these are temporal measures. Each state has a programme right from short to mid and long term which we presented to Mr. President and he graciously accepted and he plans to put a committee in place that would look at the matter starting with short term.
Short term measures
“Concerning loan restructuring, bailout and Excess Crude Account, ECA, we are asking for 18 months moratorium before we can start paying, so that we would be able to strategise.
“To develop Internally generated revenue, IGR, is not overnight, it is a long term programme that one has to plan for. And also our service has exploded and there is nothing we can do about it because people are getting their daily bread from there and we cannot say we are going to cut salaries and wages.
“We have to find a solution, otherwise we would keep going back and forth because you have the plan for $100 per barrel and now oil is selling below the expected price, you will not achieve anything. Therefore, we have deviced a plan for short term, medium term and long term.
Part of the medium term programme
“We are looking at the revenue mobilization formula in ensuring that resources which were due for the past 10 years to states will be made available to them after the National Assembly approval, while the agricultural and mining will be a long term programme.
Osinbajo, Fashola as members of inter-ministerial committee
“The committee that will be set up will have the Vice President, Minister of Power, Works and Housing, Babatunde Fashola on that committee because he headed similar committee on revenue formula at the Nigeria Governors Forum in 2012/2013.
“At the same time, some states have committed their resources to some federal government projects like roads and airports. There is a committee that was set up to look into that. We are urging the committee to hasten and complete their work and present to Mr. President so that states can get relief. These governors are in the states and we are supporting the states in so many ways.
Why states can’t save
“States are only taking 26 per cent, whereas the federal government is taking 52 per cent and you are asking us to save? Anyway, I doubt if the minister made that statement. It is coming from the media. The truth remains that states are taking 26 per cent and the federal government 52 per cent. We are not sovereign so how can we save? We are dealing with our different states’ economy which we are trying our best to fix. Most times, we are busy shouting that what is supposed to be given to us has not been given.
“For the past three years, we have been asking if the excess crude has been used judiciously. So, the question of saving or not does not arise.”
Reacting to the new demands of the Nigerian Labour Congress, NLC, that the minimum wage be increased, the governor said Labour was right.
“Well, they are right because we agree that what they are being paid is too small but they must understand the situation the country is because from where we are deriving our resources from is now lower by 60 per cent. So, how do we do the magic? But we are going to do our best.”