Cash crunch threatens 31states

Nigeria not broke, says minister
Thirty-one of the 36 states may be unable to meet their obligations to workers and citizens, Niger State Governor Babangida Aliyu warned yesterday.
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States have been finding it difficult to pay their wages and meet other expenses due to the shortfall in the allocation being shared from the Federation Account. Only five states, Aliyu said, are viable.

A meeting last week of the Federation Accounts Allocation Committee (FAAC) was aborted because there was no cash to share.
Aliyu, speaking in Minna, the state capital, through Acting Commissioner for Finance Hassan Abdulahi, was afraid that the development will affect the payment of this month’s salary.

Aliyu, who spoke at the opening of the fourth National Congress and Workshop of Cooperative Federation of Nigeria (CFN), alerted civil servants of possible delay in the payment of salary.

Abdullahi said: “We were in Enugu for three days and on the third day they called us into a room and told us to go back to our states because there no money to share.”
The governor described the development as “very unfortunate” and advised that something urgent should be done to restore sanity.

He urged governors and the private sector to pursue aggressive wealth creation as a way of stopping the problem been faced whenever there is a drop in the projected price of crude oil in the international market.
But Minister for Finance and Coordinating Minister of the Economy Dr. Ngozi Okonjo-Iweala, said yesterday that the rescheduled FAAC meeting will hold today to share the available cash to tiers of government.
The minister assured Nigerians that the country is not broke.

She gave the assurance in Abuja at a ministerial news conference where she noted that the continued fall in revenue would not jeopardise the implementation of the 2014 budget.

She noted that the administration was “putting in place contingency plans so that our economy remains stable.  Right now, we have fluctuations in the price of crude oil and when that happens, it means that the money that comes into the coffers is a little bit small.  Does that mean that the country is broke? If we are not able to pay salaries to people or meet other obligations, then we can say the country is broke, but we have not got there. Nigeria is not broke”.

She said the Excess Crude Accounts (ECA) would rise from $4.41 billion to $6.31billion with an additional $1.55 billion saving added to the Sovereign Wealth Fund.
According to her: “Oil price has come down but it is not beyond our capacity to deal with and we are dealing with it by diversifying the economy. Nigeria is a country that is dependent on one commodity (oil) and that product is dependent on how much the buyers want to pay.  We had a yoo, yoo kind of expenditure pattern before 2003 but after that, even when there was a fall in the price of crude from $140 to about $35 or $38 between 2003 and 2008, our economy remained stable because we had accumulated about $22 billion in the Excess Crude Account.”

In the interim, the minister of finance said: “We may have to cut down on some of our expenditures.  We may have to mobilise more revenue; we have to look at the fiscal policy; we have to look at the monetary policy.”
Already there are contingency plans put in place to forestall any immediate adverse effect on the budget but for next year, there would be an increase in the revenue benchmark target for both the Federal Inland Revenue Service( FIRS) and Nigeria Customs Service (NCS).

She did not disclose the exact revenue target for the agencies but explained that the FIRS had realised N44 billion out of its N75 billion target while Customs has realised N713 billion (between January and September) out of the N1.23 trillion target set for them this year.
“We must shift the economy to non-oil revenue and we are already working hard on non-oil. Our revenue to GDP ratio is below that of other countries. We need to work very hard on non-oil and deliver on non-oil sector”.

The finance minister said “last year, 60,000 ghost workers were weeded out and saved government about N160 billion. The ministry has written to  the Independent Corrupt Practices Commission (ICPC) to trace those that needed to be held accountable and we are ready to assist the ICPC on any issue that borders on transparency.”

Courtesy: thenationonlineng.net