FG has funding problems – Buhari tells govs

President Muhammadu Buhari told governors of the 36 states of the Federation that his government was having funding challenges.

Speaking when he met the governors at the Aso Rock Villa in Abuja, the president promised that he would do all he could to salvage the states from the financial mess they have found themselves.
The governors had gone to meet with the president to press home their demands on the Federal Government to help cushion the effects of the economic crisis on states.

The president promised to make more funds available to state governments to meet their financial obligations, including payment of salaries. Governors of the 36 states, at a meeting with the President yesterday, demanded a total review of the current revenue sharing formula, insisting that it was not helping them with the present economic situation.

The current revenue formula provided by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) gives the Federal Government 52 percent, states 26.72 percent and local governments 20.60 percent from the Federal Account.

President Buhari, during the meeting with the governors at the presidential villa, Abuja expressed concern that nearly twothirds of states of the federation (nearly 24) were still having difficulties with salary payments, despite the bailout funds provided to them by the Federal Government.

The President said that he was very disturbed by the hardship, which state government workers across the country and their families were facing due to the non-payment of salaries.

According to the President, as a step to ameliorate the hardship being faced by affected workers, government at the national level was working to make more money available to the states by expediting action on refunds due to them for the maintenance of federal roads and other expenses incurred on behalf of the Federal Government.

President Buhari also said that he would establish an inter-ministerial committee to study a Fiscal Restructuring Plan for the Federation, which was presented to him by the governors.

He said that the committee would review the plan to improve the finances of state governments and make recommendations on how proposals in the plan should be dealt with by the Presidency, the Federal Executive Council and the National Assembly through legislation.

President Buhari urged the governors, however, 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 them.
Chairman of the Governors’ Forum, 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 they had resolved to take other measures to boost their internally generated revenue.

The governors also said that the implementation of the Fiscal Restructuring Plan would help them to deal with their funding problems on short, medium and long-term bases.

They noted that if the plan was adopted and implemented by the Federal Government, states of the federation would become more financially empowered to fulfill their constitutional responsibilities.
Speaking to state house correspondents after the meeting, chairman of the NGF, Governor Yari said: “The meeting is about the economy. We deliberated amongst our colleagues and we did say we would pass our demands to the Federal Government to look at demands per state.
“The economy of this country lies in the state. Everything comes from the state; the oil, agricultural produce, mining and people are in the states, while the Federal Government is in Abuja.“
He explained that, “therefore, if any state has any issues and it is known to Mr. President, I doubt very much if he will be able to sleep with his two eyes closed.
“We are closer to the people and have many challenges in the states.
“Today, we have received support from the Federal Government in terms of bailout, restructured our debts, given us 15% of the Excess Crude Account for development.
Yari explained that “all these are temporal measures. Each state has a programme right from short to mid and long term, which we presented to Mr. President and he graciously accepted and he plans to put a committee in place that would look at the matter starting with short term.”
He said: “For the short term, we are looking at a situation whereby our debts that are hanging since 2005 will be restructured.“
The governor noted that “loan restructuring, bailout and ECA, we are asking for 18 months moratorium before we can start paying, so that we would able to strategize.”
“To develop IGR is not overnight. It is a long-term programme that one has to plan for. And also our services have exploded and there is nothing we can do about it because people are getting their daily bread from there and we cannot say we are going to cut salaries and wages.”
He disclosed that the committee that is to be set up by the President will have the Vice President Yemi Osinbajo, Minister of Power, Works and Housing, Babatunde Fashola and others as members. With the current sharing formula, the states are insisting that they have been unable to save for the rainy day. Governors under the NGF, in 2012, had earlier demanded a drastic reduction in the Federal Government’s share from the Federation Account and an increase of states’ share from 26 per cent 42 per cent.

The NGF had earlier challenged the Federal Government on evolving a short-term measure that would bring a lasting solution to the current economic crisis in the country.
Yari had told reporters earlier that the state of the economy was intensively giving states and the Federal Government headaches.

That, he said, was despite the bailout and a number of interventions by the Federal Government to assist the states.
“If you look carefully at this month’s federation account, it is the worst ever in the last six years.
“So, definitely, we had to come to a round table. We were elected under different party platforms to perform, not just to pay salaries and it is worse off not to be able to pay salaries. So, the issue is very, very serious that we are coming back to discuss it and if we have the opportunity, we will come back to see our leader, Mr. President,” he added.
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