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Buhari promises States more money

By on April 30, 2016

President Muhammadu Buhari on Thursday promised to make more money available to states to tide them over the prevailing financial difficulties that have made it impossible for them to pay their workers’ salaries for months.

The president made the promise in Abuja after his meeting with the state governors under the aegis of the Nigerian Governors’ Forum (NGF), which presented him with a fiscal restructuring plan, asking for a review of the nation’s revenue sharing formula that would put more money in the coffers of the states.

Although details of the proposed plan were not disclosed, the president in his response to their proposal indicated that he would give it positive consideration and promised them that the federal government would make more money available to the states to help them meet their financial obligations.

The governors, who met with the president at the Presidential Villa, subsequently asked for an additional 18-month moratorium on their subsisting debts.
A statement signed by the Senior Special Assistant to the President on Media and Publicity, Mr. Garba Shehu, after the meeting, quoted Buhari as saying that the dire financial situation the states found themselves was of great concern to him.

Buhari said he was worried that nearly two-thirds of the states of the federation were still having difficulties with salary payments despite the federal government’s bailout.
He said he very disturbed by the hardship which state government workers across the country and their families were going through due to the non-payment of salaries, adding that the federal government would strive to make more funds available to the states by expediting action on refunds due to them for the repairs and construction of federal roads and other expenses incurred on behalf of the federal government.

Buhari also said that he would establish an inter-ministerial committee to study the Fiscal Restructuring Plan for the Federation which was presented to him by the governors.
The president said that the committee would review the plan to improve the finances of the state governments and make recommendations on how proposals in the plan should be dealt with by the presidency, Federal Executive Council (FEC) and the National Assembly through legislation.

However, Buhari reminded the governors to understand that while he was ready to do all within his powers to help the states overcome their current financial challenges, the federal government also has funding problems of its own to contend with.
“You all know the problems we have found ourselves in. You have to bear with us,” he told the governors.

The Chairman of the NGF, Governor Abdulaziz Yari of Zamfara State, and Governor Nasir el-Rufai of Kaduna State, who chaired the committee that worked on the Fiscal Restructuring Plan, asked the federal government to do more to help the states financially.

The governors told the president that while they had resolved to take other measures to boost their internally generated revenue, the implementation of the Fiscal Restructuring Plan would help them to deal with their funding problems on short, medium and long-term bases.

They said if the plan is adopted and implemented by the federal government, states of the federation would become financially empowered to fulfill their constitutional responsibilities.
Fielding questions from State House correspondents after the meeting, Yari, said in the short-term, the governors were looking at a situation whereby “our debts that have been hanging since 2005 right from Obasanjo’s exit of the Paris Club are paid. These are some of the monies that were not paid before. If they are paid, some of the states that are having financial difficulties now can get money from there.”

He also said that the states would like their loans to be restructured.
“Today we have received support from the federal government in terms of a bailout, restructuring of our debts, and giving us 15 per cent of the Excess Crude Account for development.
“We are also asking for 18 months moratorium on our loans before we can start paying, so that we would be able to strategise,” he added.

Saying all these were temporary measures, Yari explained that each state has short, medium and long-term programmes, which had been presented to Buhari, adding that the president had‎ graciously accepted and agreed to set up a committee that would look at the matter.

The governor said the committee would have as members: the president, Vice-President Yemi Osinbajo and the Minister of Power, Works and Housing, Babatunde Fashola.
He said Fashola would be on the committee because he headed a similar committee on the review of revenue formula as a member of the NGF in 2012.

Yari said states cannot raise internally generated revenues overnight, but have to develop a long-term programme to achieve more efficient collection of revenue in their respective domains.
He said the work force of states had exploded and there was nothing they could do about it because people earn their daily bread from the jobs.

On the allegation ‎by the Finance Minister Kemi Adeosun that the state governors did not save for the rainy days, hence the current financial crisis, Yari said: “States only take 26 per cent of the Federation Account, whereas the federal government gets 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 the states are taking 26 per cent and the federal government 52 per cent, what are they doing with the money?”

‎On the demand by the Nigeria Labour Congress (NLC) for an increase of the minimum wage‎ to N56,000, Yari said the union was right.
“We agree what they are being paid is too small but they must understand the situation the country is in, because from where we are deriving our resources is now lower by 60 per cent. So how do we do the magic? But we are going to do our best,” he said.

Earlier, the governors had admitted that they were desperately looking for solutions both in the short and long-term to the economic challenges created by the sudden fall in ‎oil prices.
“You know we are in a very bad situation and we need to come together and discuss intensively about this economy because it is what is now giving the states a headache and by extension the federal government,” Yari had said after a meeting of the NGF that ended late Wednesday night.

“If you look carefully at this month’s Federation Account allocations, it was the worst ever in the last six years, so definitely we had to come to the roundtable. We were elected under different party platforms to perform, not just to pay salaries and it is worse off it we are unable to pay salaries.

“So the issue is very, very serious and that is why we are coming back to discuss it and if we have the opportunity we will come back to see Mr. President on this issue,: the chairman of the forum told State House reporters.

He said rather than seek for more bailouts from the federal government, the governors would find a permanent solution to the problems facing their respective states.
Ekiti State Governor Ayodele Fayose, who also fielded questions from journalists, said the meeting was all about finding a lasting solution to the financial problems of the states.

Fayose also disagreed that the country was in a financial mess because it did not save during the years of boom. “Well that is subjective, every leader at one time or the other must have done their best within the ambit of availability. So for me, every former president, every former leader had made their contributions and I commend them, so the new people in the saddle of leadership must continue to give their best,” he said.

The Governor of Akwa Ibom State‎, Emmanuel Udom, who also spoke after the meeting of the NGF, called for cooperation among states, explaining that more interaction was needed to find a better way out of the woods.

On his own part, Edo State Governor Adams Oshiomhole complained that the All Progressives Congress (APC) states were exempted from the N2 billion ecological funds released by former President Goodluck Jonathan, adding that only the Peoples Democratic Party (PDP) states were considered in the distribution of the funds.

Oshiomhole said, however, that unlike the former president, Buhari, in the face of the worsening state of the economy, has remained a rallying point for all state governments in the country, irrespective of political affiliation.

He said: “We are very lucky to have President Buhari at this time. I have been here now for seven and a half years and I have had the opportunity to work with three presidents. That is the truth.
“Under the last president, it would have been impossible for us to approach Abuja to give us support because we have personal challenges. We would have been given lectures on fiscal responsibility and all those kind of talks, even though the wastage was more here than any other place at that time.

“We have a president who recognises that he is not just president of the federal government, he is the president of the federation of which the states are part of the whole and regardless of our political affiliation.
“This is very important, because everybody is able to ask this president to give him support and he is doing so.

“Whereas, in the recent past, some PDP governors got N2 billion from ecology fund, we APC governors were not given. But we promised to be different and I am happy this president is showing that difference.”
On the new proposal for an increase in the minimum wage by the NLC, he said he believed in a living wage for workers.

The governor said that he had been able to pay Edo State wor‎kers’ salaries despite the economic contraction because of his belief that their wages ranked high in terms of priorities for his government.
According to him, there was no need for him to borrow to pay salaries as he had increased revenue generation from taxing the wealthy more in the state.