- States Rule Out Borrowing to Fund Revenue Gaps
State governments on Tuesday ruled out resorting to borrowing to fund gaps resulting from dwindling revenues accruing to the Federation Account, which are shared by the three tiers of government.
Speaking with journalists in Abuja after the Federation Accounts Allocation Committee meeting for the month of October, the Chairman of the Finance Commissioners Forum, Mr. Mahmood Yunusa, said the states were looking at cost-cutting measures rather than resorting to borrowing.
“States are not looking at borrowing to augment the funding gaps,” he said.
Yunusa, who is the Commissioner for Finance in Adamawa State, said the state governments were also working with the Federal Government and its agencies in order to increase the funding available to the states.
Such steps, he said, included measures to increase the non-oil revenues available to the country, especially through Value Added Tax, withholding tax and stamp duties.
He said increasing the non-oil revenues of the country would rub off on the oil finances available to the states as they would be able to make more money.
The spokesman for the commissioners also disclosed that cutting costs would enable the states to reduce their financial burden.
Also speaking to journalists, the Accountant General of the Federation, Mr. Idris Ahmed, said that the total revenue distributable to the three tiers of government for the month of September was N558.08bn, including revenues accruing from VAT.
The Federal Government received a share of N234.29bn; the states and the Federal Capital Territory received N152.74bn while the local governments received N114.92bn.
Oil mineral producing states received an additional N40.22bn according to the 13 per cent principle of derivation.
Ahmed said that the gross statutory revenue of N423.96bn received for the month was less than the N550.99bn received in the previous month by N127.02bn.
He said, “There was significant increase in revenue from export sales of $176.4m due to an increase in crude oil production by 4.12 million barrels. However, the average price of crude oil decreased from $50.44 to $46.29 per barrel.”
“Activities resumed at Forcados Terminal for the first time since February 2016. There were shut-ins and shut-downs at terminals for maintenance and repairs.”
Ahmed said oil royalty recorded significant increase in the month but added that there was considerable reduction in revenues from Companies Income Tax, Petroleum Profit Tax, Import Duty and VAT.
