The three tiers of government need about N700billion monthly to meet up with obligations of salaries payment, statutory transfers and debt servicing, Vice-President Yemi Osinbajo has said.
Osinbajo said this on Monday in Abuja at the opening session of a two-day national workshop on alternative sources of revenue generation for sustainable development in states and local councils in Nigeria.
The vice president, who was represented at the event by the Minister of Finance, Mrs. Kemi Adeosun, said the huge funds required to run the programmes of government had made it imperative to find alternative sources of revenue.
He said over the years, the country’s over-reliance on statutory transfers from the Federation Account had resulted in the unsustainable culture where states were coming to Abuja every month to collect their share of revenue.
Osinbajo stated that the need to diversify the revenue base of the country had become inevitable because the oil sector was prone to lots of vulnerabilities.
For instance, he said in the period of oil prices, FAAC distributed as high as N909bn in June 2014.
He, however, lamented that this could not be achieved in June this year as just N302bn was shared by the same committee to the three tiers of government.
The vice president added that the tight fiscal condition, which the country was currently passing through, had affected the cash flow position, leading to a situation where state governments were unable to pay salaries and meet other financial obligations.
He said, “The President Muhammadu Buhari-led administration is working to achieve inclusive and sustainable growth after a period of declining revenue earnings as a result of the twin impact of falling oil prices and production volumes.
“Over the years, our over-reliance on statutory transfers from the Federation Account has resulted in the unsustainable culture where 36 state commissioners of finance come to Abuja every month to collect their share of revenue derived from crude oil.”
The vice president added, “In the period of high prices, we saw the FAAC distribute revenue as high as N909bn in June 2014 for example, but by the same month in 2016, the FAAC allocation was N302bn.
“This is bearing in mind that the minimum amount required to cover monthly salaries, statutory transfers and debt service is N700bn.”