Debt Ravaged Osun Receives Zero Allocation In April; Bayelsa, Cross River Suffer Too

Rauf Aregbesola, Osun State Governor

The Osun State government received nothing from the federation account in April 2016 after appropriate deductions by the federal government.

PREMIUM TIMES report continues:

The deduction from Osun was part of the ₦32 billion deducted by the federal government from states as repayment for bailout funds and other loans extended to the affected states and the federal government.

For Osun, the state’s allocation of about ₦2.03 billion from the federal revenue was insufficient to offset its total debt to the federal government of about ₦2.391 billion.

At the end of the Federation Accounts Allocation Committee (FAAC) meeting for April 2016, the state went home empty handed. It still, however, owes the federal government about ₦361 million which will be deducted from subsequent months.

The Director, Osun State Bureau of Communication and Strategy, Semiu Okanlawon, did not respond to calls to inquire how the state government, which has had difficulty paying workers salaries, would cope without its April allocation.

Mr. Okanlawon did not also respond to a text message sent to his telephone on Sunday.

Apart from Osun, other states that had huge deductions by the federal government include Bayelsa, Cross River, and Ogun.

Bayelsa had ₦3.207 billion, 66.7 per cent, deducted from ₦4.812 billion allocated to it in April.

Other deductions included Cross River State, ₦1.405 billion (63.46 per cent); Ogun, ₦1.185 billion (57.2 percent); Plateau, ₦1.248 billion (56.52 per cent); and Ekiti, ₦1.067 billion (55.33 per cent).

Seven states – Akwa Ibom, Anambra, Jigawa, Kogi, Lagos, Rivers, and Yobe – along with the Federal Capital Territory did not have deductions, as they did not collect the bail-out funds used for the deduction.

Apart from bail-out funds, which took about ₦3.078 billion from the affected states, loans the states are now repaying to the federal government include debts on Asset Management Corporation of Nigeria (AMCON) loans, commercial agricultural credit scheme, bond issuance programme, obligations to contractors, and deduction from excess crude account.

Other deductions include refund/payment arrears of derivation, foreign loans, special intervention/flood management projects, the national FADAMA project and reconstruction of commercial bank loans into FGN bonds.

While speaking on how Bayelsa State would cope after losing two-thirds of its allocation to debt repayment, the Commissioner for Information, Jonathan Obuebite, said the state has adopted strategies to shore its internally generated revenue base.

Apart from slashing the salaries of political office holders and members of the state executive council by 50 per cent, Mr. Obuebite said the state government reviewed its tax collection strategies to capture evaders.

He said since the adoption of new revenue generation strategies, the state’s revenue yield improved from about ₦100 million per month to about ₦500 million.

“Our target is to hit ₦2 billion every month,” he said. “Part of our strategy to realize that target is to get all the oil companies doing business in the state, including Shell, to pay their corporate tax to the state.

“Already, we are in court to get all the companies to begin to pay taxes in their area of operation. The state will be comfortable with that arrangement.”