Ajimobi raises alarm over dwindling allocation to states
Governor Abiola Ajimobi of Oyo State raised the alarm over the dwindling and delayed federal allocation to states by the Federal Government, saying that the state might not be able to pay the October salary to workers and carry out other financial obligations unless the situation was promptly addressed.
He raised the alarm while speaking with newsmen shortly after declaring open the 2014 National Council on Development Planning meetings held at the International Conference Centre, University of Ibadan on Friday.
He said that the allocation to the state had been reduced by almost 40 per cent, adding that even the allocations were not being released as at when due owing to what the Federal Government described as a fall in the price of crude oil.
“Truth be told, the financial position of Oyo State as of now is not too good. But this is not peculiar to Oyo State as other states in the federation are also experiencing serious cash crunch.
“You will recall that at the APC forum held in Kwara State recently, we (governors) raised alarm over the dwindling federal allocation to states. Even some PDP governors have also cried out over their inability to meeting up with their financial obligations.
“Unless the Federal Government addresses this situation with all the seriousness it deserves, most states may not be able to pay workers’ salaries let alone carry out other development programmes,’’ he said.
Governor Ajimobi explained that at the inception of his administration, the federal allocation stood at about N4.2 billion while the salary and wages was N2.9 billion, adding that the statutory allocation had of recent been reduced to about N3.2 billion while the salary and wages had risen to about N5 billion.
As a result, he said the state had been on monthly deficit of about N1.8 billion, even as appealed to the Federal Government to do something urgently to save the states from grinding to a halt.
The governor said that the current global development had once more shown that there was no alternative than diversification from oil by Nigeria.
“This requires us to intensify our reform programme and improve the quality of our strategic plan. It also requires us to prudently develop and utilize the nation’s resources. It is, therefore, time to ensure well thought-out strategies for capacity building, innovative financing of infrastructure projects, job creation and development of policies to enhance competitiveness and social inclusion,’’ he said.
In his address, the Minister of National Planning, Dr. Abubakar Sulaiman said that the fall in the price of crude oil from $100 to $80 per barrel in the international market had the potential of having negative effect on the economy of Nigeria.
This, he said, had necessitated the need to develop contingency plans in the event that the price of crude oil continued to fall, adding that his ministry was already working with the Federal Ministry of Finance and the Central Bank of Nigeria to develop the contingency plan.
While stating that the Federal Government could not do it alone, he urged all the 36 states in the country as well as the local government councils to continue to work together in order to achieve the common goal.
The minister said that the forum was aimed at fashioning out a policy framework to address the country’s economic challenges.
