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| Minister of Finance, Mrs Kemi Adeosun |
The federal government
has clarified that putting on hold deductions from the monthly allocations to
states in respect of repayments for their salary assistance loans should not be
mistaken for a bail-out.
Media
report continues:
Vice
President Yemi Osinbajo on Thursday announced during the 66th meeting of the
National Economic Council, NEC in Abuja that President Muhammadu Buhari had
approved the suspension of the deductions from the allocation for March 2016.
Mr.
Osinbajo had explained that the presidential gesture was to give states that
benefited from the loans a breather, as they continue to grapple with recent
pressures on their finances in the face of dwindling monthly revenue
allocations as a result of declining global oil prices.
The
Central Bank of Nigeria, CBN, governor, Godwin Emefiele, had told the Council
that about ₦689.5 billion had so far been disbursed as salary assistance loans
to the benefiting states, while additional ₦310 billion was disbursed as Excess
Crude Account-backed loans.
But,
at the Federation Accounts Allocation Committee, FAAC, meeting, representatives
of the 36 states governments went home sad, as they were handed parlous shares
from a total ₦299.75 billion statutory allocation for the month, the lowest
allocations in more than five years.
Details
of the allocations showed that the states, which took home about ₦64.52 billion
in February, were to share only ₦55.34 billion, representing 26.72 per cent of
the total revenue for the month.
The
Federal Ministry of Finance said on Thursday that the lean revenue allocation
was not only as a result of the crisis in the global oil market, but also a
reflection of the seasonally low collection period for the Federal Inland
Revenue Service, FIRS.
At
the moment, the ministry said at least 27 states were struggling to meet their
obligations, particularly to their workers, most of who have had to go for
several months without salary.
Latest
report by the National Bureau of Statistics, NBS painted a bleak portrait of
the revenue situation of the states, with only 11 of the 36 states of unable to
improve their 2014 internally generated revenue, IGR, records in 2015.
Minister
of Finance, Kemi Adeosun said the deferment of a total of ₦10.9 billion
obligatory repayments due to the Federal Government from the states in respect
of their restructured loan obligations was informed by this reality.
“We
(federal government) are not able to guarantee that all states will be able to
meet their salary obligations, as each state’s situation is dependent on its
own cost profile and other obligations it may have, but this initiative is to
better position them to do so,” the minister explained.
Although
all states would benefit from the relief package for March, Mrs. Adeosun said
any further deferrals would be subject to the agreement of a Fiscal
Restructuring Plan to be prepared by each state with clear measurable
objectives.
She
said her ministry was keen to ensure that the programme of financial discipline
by the federal government was replicated in all tiers of government, including
elimination of payroll fraud and increased efficiency in spending overheads.
“Enhanced financial
transparency by the publication of audited accounts and submission of debt
profile may also be required. Moving states towards fiscally sustainable
practices is a key objective of the federal government to ensure that Nigeria
recovers from the current economic challenge,” the minister explained.
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