The 36 state governors have told President Muhammadu Buhari to approve the sharing of funds in the Excess Crude Account (ECA) among the three tiers of government in order to improve the liquidity position of the states.
Currently, the ECA, which was set up when crude oil price was above $100 per barrel to save anything above the budget benchmark price in a special account for use in lean period, currently has a balance of $2.259bn.
The governors, under the aegis of Nigeria Governors Forum, made the request at the Presidential Villa, Abuja during a meeting with the President on the current economic crisis facing the states, which has culminated in the inability of the state governments to pay workers’ salaries.
The Chairman of the forum and Zamfara State Governor, Abdulaziz Yari, and Governor Nasir el-Rufai of Kaduna State, who chaired the committee that worked on a fiscal restructuring plan submitted to the President at the meeting, 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 states’ Internally-Generated Revenue, the implementation of the plan would help them to deal with the funding problems on short, medium and long-term bases.
They said if the plan was adopted and implemented by the Federal Government, the states would become more financially empowered to fulfil their constitutional responsibilities.
In an interview with State House correspondents, Yari said it was the governors’ decision at the NGF meetings that they should meet with the President to table their demands.
He said the states were still facing financial challenges despite the fact that they had received supports from the Federal Government in terms of bailouts, debt restructuring and sharing of 15 per cent of funds in the ECA.
Describing the past supports as temporary measures, the governor said the forum presented short, medium and long-term measures to Buhari, adding that the President accepted the proposals and announced plans to set up a committee to look at the matters, starting with the short-term proposals.
The governors also asked for an 18-month moratorium on their loans.
Yari said, “For the short-term, we are looking at a situation whereby our debts that are hanging from 2005 right from Obasanjo’s exit of the Paris Club are paid. There are some money that was not paid before. If it is paid, states that are having difficulties can get money from there.
“We are also looking at loan restructuring, bailout and the ECA. We are asking for an 18-month moratorium before we can start paying, so that we will able to strategise.
“To develop the IGR is not overnight, it is a long-term programme that one has to plan for. Also, our service has 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.”
The NGF chairman also said some states had committed their resources to some Federal Government’s projects like roads and airports.
He said a committee set up to look into the issue had been urged to hasten the process so that requests could be presented to the President for relief.
Buhari expressed concern that two-thirds of the 36 states of the federation were still having difficulties with the payment of their workers’ salaries.
He said the situation had become an issue of great concern for him because it had persisted despite the bailout provided for the states by the Federal Government.
According to a statement by his Senior Special Assistant on Media and Publicity, Garba Shehu, Buhari said he was disturbed by the hardship, which the state government workers across the country and their families were facing due to the non-payment of salaries.
To ameliorate the hardship being faced by affected workers, the President said the Federal Government would strive to make more funds available to the states.
This, he said, would be done by expediting action on refunds due to them for the maintenance of federal roads and other expenses incurred on behalf of the Federal Government.
Buhari also said he would constitute an inter-ministerial committee to study a fiscal restructuring plan for the federation, which was presented to him by the governors.
The President said 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, the Federal Executive Council and the National Assembly through legislation.
He, however, urged 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 had funding challenges to contend with.
“You all know the problems we have found ourselves in. You have to bear with us,” he told the governors.
On the recent allegation by a former Minister of Finance, Ngozi Okonjo-Iweala, that state governors did not support savings during the last administration, Yari said the states were only taking 26 per cent of revenues available for sharing, whereas the Federal Government was taking 52 per cent.
He wondered how states could save under such a condition.
On the proposal by labour unions for a new minimum wage of N56,000, Yari said, “Well, they are right because we agree that what they are being paid is too small.
“But they must understand the situation the country is in because where we are deriving our resources from is now lower by 60 per cent.
“So, how do we do the magic? But we are going to do our best.”