States Face Cash Crunch, Salaries Swallow Revenues, Federal Govt Seeks More Fund - 9jaflaver

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States Face Cash Crunch, Salaries Swallow Revenues, Federal Govt Seeks More Fund

Two top officials of the Muhammadu Buhari regime on Wednesday indicated that the country urgently needed more funds to run government and provide basic amenities for Nigerians.

Although the Minister of Finance, Budget and National Planning, Zainab Ahmed, in an interview with the State House correspondents faulted a claim by the Edo State Governor, Godwin Obaseki, that the Federal Government printed between N50bn and N60bn in March, she said there was a need to improve revenue to run government.

On his part, the Accountant-General of the Federation, Ahmed Idris, at the 2021 retreat for members of the technical sub-committee on cash management, stated that there was increasing pressure on government funds.

The minister and the accountant-general of the federation said these as investigations by The PUNCH revealed that most state governments were fast turning into salary-paying centres as a larger percentage of their revenues was spent on personnel costs compared to capital projects.
For example, while the Ekiti State Government said it spent 93.6 per cent of its federal allocation on personnel costs, its Ondo counterpart admitted that it was challenging paying high personnel costs.
Recall that two state governors a few days ago painted gloomy pictures of finances of state and federal governments.

On Monday, Governor El-Rufai of Kaduna State, through his Special Adviser on Media and Communication, Mr Muyiwa Adekeye, while justifying the decision of the state government to lay off workers said, “In the last six months, personnel costs have accounted for between 84.97 per cent and 96.63 per cent of FAAC ( Federation Account Allocations Committee) transfers received by the Kaduna State Government. In March 2021, Kaduna State had only N321m left after settling personnel costs.”

On Thursday last week, Obaseki was quoted as raising the alarm over Nigeria’s financial position which he said made the Central Bank of Nigeria to print about N60bn to augment allocation shared by states in March.
He said, “When we got FAAC for March, the Federal Government printed additional N50-N60bn to top-up for us to share. This April, we will go to Abuja and share. By the end of this year, our total borrowings are going to be within N15-N16tn.”
The finance minister in the interview with State House correspondents on Wednesday said there was no truth in the claim made by Obaseki.

She, however, said there was an urgent need for the country to improve its revenue to service debts and ensure day-day running of government.
Shedding more light on the country’s finances, the finance minister stated, “Nigeria’s debt is still within sustainable limit. What we need to do as I have said several times is to improve our revenue to enhance our capacity to service, not only our debt, but to service the needs of running government on a day-to-day basis.”
Describing the governor’s claim as very sad, the minister explained that the money shared monthly at FAAC was revenue generated.

Ahmed, who said Obaseki’s claim was not factual, described revenue distribution as public information that was available to all.
The minister also faulted the governor on the alarm raised on the country’s borrowings. She insisted that the nation’s debt profile was still within sustainable limit.

Ahmed said, “The issue that was raised by the Edo State Governor, for me, is very sad because it is not a fact. What we distribute at FAAC is a revenue that is generated and in fact, distribution revenue is public information.
“We publish revenue generated by the FIRS (Federal Inland Revenue Service), the Customs and the NNPC (Nigerian National Petroleum Corporation) and we distribute at FAAC. So, it is not true to say we printed money to distribute at FAAC. It is not true.”
Efforts to reach the governor on Wednesday proved abortive as none of his former aides picked their calls, while one, who promised to call back, did not do so as of the time of sending of this report.
A visit by The PUNCH to the government house on Wednesday evening also did not yield a result as the governor was said to be out of the office after attending to the day’s job, apparently to attend the closing ceremony of the National Sports Festival, which ended in Benin on Wednesday.

There is increasing pressure on govt funds – AGF

Also on Wednesday, the Accountant-General of the Federation, Idris, advocated efficient management of government funds.
He stated that at present, there was increasing pressure on government funds, a situation that had made it imperative for managers of government funds to evolve strategies that would guarantee efficient cash management.
Idris disclosed this at the 2021 retreat for members of the technical sub-committee on cash management. The technical sub-committee on cash management, inaugurated in April 2016, is the professional arm of the Federal Cash Management Committee.

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Source:- Punch Ng

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