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Nigeria needs N700bn monthly for recurrent expenditures alone ―Adeosun
Federal, states and local governments need N700 billion every month to meet the requirements of salaries, statutory transfers and debt service according to Minister of Finance Mrs Kemi Adeosun.
Speaking at the opening of a two-day national workshop on alternative sources of revenue generation for sustainable development in states and local government councils in Nigeria organised by Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) in Abuja on Monday, Adeosun said in the period of high oil prices, federation account distributed revenues as high as N909 billion in June 2014 but by the same month in 2016, FAAC allocation was N302 billion.
“The tight fiscal state negatively affected our cash flow position, leading to a situation where state governments facing liquidity challenges were unable to pay salaries and meet other financial obligations.
“The 22-Point Fiscal Sustainability Plan (FSP) for sub-national governments was introduced and acceded to by state governments in June 2016 with the view to enhancing fiscal prudence and transparency in public expenditure, mirroring the on-going Public Financial Management reforms being undertaken by the Federal Government.”
Adeosun noted that Strategic Objective 2 of the FSP was focused on improving public revenues, requiring each state to set realistic and achievable targets for improving internally generated revenue from all revenue generating activities of the state in addition to tax collection.
Other action plans included privatisation of state owned enterprises, establishment of Efficiency Units to reduce overhead expenditures, biometric capture of civil servants, implementation of continuous audit to reduce revenue leakages, and measures to achieve sustainable debt management.
“Fiscal discipline, improved revenue generation, rational allocation and efficient use of resources, must be strategies adhered to by every tier of government if we must return to path of sustainable growth”, the Minister said.
Speaking earlier in a goodwill address, Minister of Budget and National Planning, Senator Udo Udoma lamented that for too long, Nigerian abandoned non-oil revenue sources and surrendered its faith to the fortunes of crude oil revenue earnings.
“Today sadly, we are paying heavily for the many years of neglect or failure to diversify the country’s revenue sources away from crude oil.
“Revenues are required to develop growth and development however, instability in the oil sector in the past two to three years have resulted in a continuous downward spiral in revenue receipts by all tiers of government with increasing difficulties to meet statutory and non-statutory obligations to the citizenry.
“This is more so at the state and local government levels where internally generated revenues are abysmally low and insufficient to support the revenue of the state from the centre except for very few states.”
He then advised states and local governments to exploit areas of their comparative advantage to promote economic diversification for job creation and improved livelihood for the teeming populace.
Some of the areas where states and local governments could diversify into agriculture, solid minerals tourism, entertainment, Arts and Culture, and ICT.
Acting Chairman of RMAFC, Mr Shettima Abba-Gana told the audience that previous efforts by his commission had started yielding positive results as government has restrategised its priorities by delving into agriculture and mining.
He said his commission was presently studying new sources of revenue that will be commended to governments.