Making Sense of Public Finance Management States Plot Ways To

GOVERNORS’ P FAITH, EACE & PR ITY & OGR UN ESS THE EXECUTIVE SUMMARY FORUM AN NGF MONTHLY PUBLICATION

Has Benue hit its target N1.5bn target on IGR? Page 04

Obiano partners the Irish on low-cost road construction Page 04

His Excellency Gov. Abdul’aziz Yari Abubakar States plot ways to Chaiman, Nigeria Governors Forum financial viability Page 10 Page Knowledge Management: 09 Making sense of Public Finance management NIGERIA THE EXECUTIVE SUMMARY Page

GOVERNORS’ P FAITH, EACE & PR ITY & OGR UN ESS FORUM A NIGERIA GOVERNORS’FORUM MOTHLY PUBLICATION 02 THE CHAIRMAN’S WORD Dear reader, For over fifteen years ment (M4D) of DFID and tion of Nigeria as Polio free now, the NGF has record- the World Bank. on the 25th of September, et me first of all ed growing relevance such Furthermore, the NGF 2015 by the World Health welcome you to that the Forum’s meetings Help-Desk, funded by the Organisation (WHO). this maiden edi- now form the basis for Bill and Melinda Gates This has not made the tion of the NGF major policy contributions Foundation is coming to NGF to rest on its oars. It is newsletter appro- on important national is- being at the Secretariat. targeting a Polio free Nige- priately named The Exec- sues. These include the The platform is modelled ria again by July 2017. Lutive Summary, the brain debates on the Sovereign to support sustainable These and many more child of our secretariat, Wealth Fund, the national reforms in key areas of positive activities will form The Nigeria Governors’ minimum wage, and the the sub-national econo- the nucleus of the News- Forum (NGF). I am sure removal of fuel subsidy. my, particularly in IGR letter’s content as we make the Newsletter will delight Most recently, the approv- augmentation. The NGF our States and Nigeria as my colleagues and excel- al of a fiscal sustainability Help-Desk has also been a whole an enabling envi- lences and other readers plan has been added to its designed to foster peer ronment for Foreign Di- alike, whose desire to have chain of accomplishments. learning among States, rect investment (FDI) and a monthly publication that Even though the critical thus reinforcing our flag- for living. showcases the positive ac- fiscal situation faced by ship programme - The I therefore commend the tivities of governors will be Nigerian States has seen State Peer Review Mecha- Secretariat on this impres- actualized with the birth of a rapid decline in net al- nism (SPRM). sive milestone of produc- the NGF grill. location (over 65% from Gov. Abdul’aziz Yari But that is not all. In or- ing this high quality publi- Indeed, our consortium May 2014 – May 2016) Abubakar der to foster economic cation and enjoin each and of 36 democratically elect- which has rendered sever- diversification and revi- every one of us to not just ed governors which was al States incapable of gen- organized by the NGF Sec- talization at the sub-na- see this publication as ours established as a quasi-gov- erating revenue to service retariat in collaboration tional level, the NGF has but also make it a refer- ernmental organization, workers’ salaries and oth- with State Partnership for also supported reforms in ence point towards taking seeks to promote unity, er sundry overhead costs, Accountability, Respon- Agriculture, Energy, Infra- the NGF and governance good governance, under- the NGF has carved its siveness and Capability structure, Solid Minerals in Nigeria to the next level. standing and co-operation strategic activities around (SPARC), Federal Public and Natural Resources de- among states. This has, mitigating this adverse Administration Reform velopment. Thank you and keep since inception, evolved trend on the economy. Programme, (FEPAR) Since 2009, Bill and reading. just as its desire to always This is evidenced by No- State Accountability and Melinda Gates Foundation find common grounds on vember 2015’s National Voice Initiative (SAVI) and has waged a war against Hon Abdulaziz issues that advance gov- Peer Learning Event on Growth and Empower- Polio through a strong Abubakar Yari ernance and democratic Internally Generated Rev- ment in States (GEMS3), partnership with the NGF Chairman, Nigeria ethos have grown. enue (IGR) enhancement, Mobilizing for Develop- culminating in the declara- Governors’ Forum

Gov. Rochas Okorocha of Imo State in a chat with UN Sec- retary General, Ban Ki Moon.

Page Gov. Jibrilla Bindow of Adamawa State & Gov. Emma- Gov. Abdul’aziz Yari Abubakar recieveing a plaque from the Chief of nuel Udom of Akwa Ibom State pose for a photograph Army Staff, Lt. Gen. Tukur Buratai, recently. 02 www.nggovernorsforum.org NIGERIA THE EXECUTIVE SUMMARY Page

GOVERNORS’ P FAITH, EACE & PR ITY & OGR UN ESS FORUM A NIGERIA GOVERNORS’ FORUM MOTHLY PUBLICATION 03 THE DG’S ADVISORY

are several national dai- Summary, monthly. years collaborated with lies reporting the states The publication will numerous local and and their Chief Execu- feature developments international develop- tives. that take place in their ment partners such as, As the name implies, respective states, as is United Nations De- the Executive Summary done in this maiden velopment Partners is, simply put, a sum- edition. The newslet- (UNDP), the World mary of the month’s ac- ter presents the gover- Bank, Bill and Melinda tivities by governors as nors’ most uncommon Gates Foundation, UK reported in the media. performances and as Department for Inter- But it does one more depicted in its center- national Development thing differently; our spread captioned Pho- (DFID) and a host of team of editors squeeze toSpeak, their uncom- others, they will feature the juice from the news mon actions. prominently in The and represent them The Executive Sum- Executive Summary, concisely and readably mary will also do justice which will be the refer- for the governors, who, to all timelines associat- ence point for our many justifiable so, are too ed with the governors partnerships. busy to peruse lengthy like birthdays and anni- It is my hope that prose. versaries. We will how- states will take advan- Our other strategy is ever not trivialize our tage of these innova- to save governors the pages with sundry so- tions for the purpose of encumbrances of sick- cial engagements unless providing quality gov- Shittu ening misrepresenta- they become absolutely ernance. tions. Knowing their necessary. tight schedules, we en- Furthermore, since Signed elcome to ry, a newsletter for state deavor to veer gover- the NGF in its drive to the Ex- governors, produced by nors’ attention only to enhance development Otunba Alh. Abdul- ecutive the NGF. It is not out of very important things and support reform lateef Shittu Summa- place for people to ask, in – The Executive processes has over the Ag Director General W why this, when there

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GOVERNORS’ P FAITH, EACE & PR ITY & OGR UN ESS FORUM A NIGERIA GOVERNORS’FORUM MOTHLY PUBLICATION 04 Developmental News Has Benue hit its target N1.5bn target on IGR?

hairman of the collect revenues have tre- board, Mrs. Mimi mendously blocked leak- Adzape-Orubibi, ages in the system. Ctold newsmen in Makurdi She urged institutions that though the board was of government in the yet to meet the target of state that are yet to com- N1.5 billion monthly giv- ply with the POS system en to it by the state gover- to endeavour to do so by nor, however it would be next month to enable the achieved soon. board check any form of Rt. Hon. Aminu Tambuwal Orubibi, who com- malpractices and tax eva- Governor, Sokoto State mended citizens of the sion. state for complying with Before October last year Nigeria’s only LGA without Dr. Samuel Ortom the new tax regime, not- the state generated be- secondary school gets one Governor, Benue ed that the Point of Sale tween N300million and (POS) devices deployed to N400million monthly. he only remain- tistics in education in State ing local gov- the world. Apart from ernment area in having the ignominy TNigeria without a sec- of not having a senior Okowa Insists on Multi-Product Economy ondary school has just secondary school to elta State Gov- ment of commerce and secured one, thanks cater for its estimated ernor, Sen. Dr. industry, revitalization to Governor Aminu 120,000 residents, a Ifeanyi Okowa, and diversification of our Waziri Tambuwal of 2013 survey showed Dinsists that the diversifi- economy, promotion of Sokoto State. that out of 1890 stu- cation of the state’s econo- non-oil exports, expo- Gudu LGA in Sokoto dents in Junior Sec- my from oil dependent to sition of made-in-Delta State has suffered the ondary Schools in non-oil export, is his ad- products, development misfortune of having the LGA, only one of ministration’s main goal. of agricultural and agro- some of the worst sta- them was a female. Okowa, on his admin- based industry, prospects istration’s desire to stim- for foreign and local in- ulate the rapid growth vestments and giving di- of the state’s economy rect attention to the role said that “Delta STATE of the private sector in Dr. Ifeanyi Okowa Government’s desire to economic development Governor, Delta stimulate growth by way of the state”, is unflinch- State of accelerated develop- ing. Obiano partners the Irish on low-cost road construction Jibrilla Bindow nambra Sate Gov- to construct more roads Governor, Adamawa State ernor Willie Obi- at a reduced cost which ano has partnered will translate into in- Paper qualification is no Awith Irish company, Du- creased economic activi- ralay Technology, a new ties, free vehicular move- guarantee for performance trend in road construc- ments in and around the tion that will provide state as well as improved overnor Umaru ed this at the flagging quality roads, built at a living standard of the cit- Jibrilla Bindow off of a 37.5 kilometer reduced costs that will izenry. of Adamawa road in Shelleng Lo- last up to five years with- The Duralay Technology GState said that pa- cal Government Area out maintenance. is used in many countries per-qualification is not of the state, where he The governor expressed in Africa and Asia but has necessarily a guaran- said the essence of high hopes that if the not been tested anywhere tee that elected office leadership was service technology proves to be in Nigeria, making An- holders will perform as delivery to the people Dr. Willie Obiano efficient, it will go a long ambra the first state in the expected. not bombastic gram- Anambra State way in assisting the state country to use it. The governor, stat- mar. www.nggovernorsforum.org NIGERIA THE EXECUTIVE SUMMARY Page

GOVERNORS’ P FAITH, EACE & PR ITY & OGR UN ESS FORUM A NIGERIA GOVERNORS’FORUM MOTHLY PUBLICATION 05 is Management Team

Alhaji Mohammed Abubakar Otumba Alhaji L. O. T Shittu Jibia Ag. DG. and Executive Direc- The Executive Director of tor, Strategy and Research Finance and Administration

Mr. A. B. Okauru, Esq. Director General NGF (On sabbatical)

Mission Statement Chijioke Chuku Head of Legal Services at Abdulrazaque Bello Barkindo he Secretariat is dition of accurate data and Head Media & Public Affairs headed by a Di- research materials to the Nigeria Governors’ Forum, rector General Forum Abuja and supported by Proactively build the ca- Ttwo Executive Directors in pacity of state actors to en- charge of Administration sure better service delivery and Finance and Strategy at the sub-national level. and Research respectively. The policy areas include: With the support of In- ternational Development 1. Economic Research and Partners, the Secretariat Advisory has gradually evolved into a 2. State Peer Review Mech- policy think-tank as well as anism a one-stop resource centre 3. Policy Advisory for the 36 States of Nigeria. 4. Public Financial Man- The Secretariat has contin- agement and Development ued to increase its capacity Policy Operations to: 5. Polio Eradication Initi- Deepen its policy concep- ative/Routine Immuniza- Ibrahim Jaafar tion functions tion Olatowoju Kuburat Protocol Officer Ensure timely, reliable ren- 6. Knowledge Management Account Officer

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Secretary General, Ban Ki Moon. Ki Ban General, Secretary is Tambuwal. Aminu State, Sokoto of governor the

L–R: Gov. Emahi; Gov. Bargudu; Gov. Wada; Gov. Almakura and UN UN and Almakura Gov. Wada; Gov. Bargudu; Gov. Emahi; Gov. L–R: The governor, Delta State, Ifeanyi Okowa (left) chatting with with chatting (left) Okowa Ifeanyi State, Delta governor, The

Jibia; and the substantive DG, NGF, AB, Okauru Esq in a chat. a in Esq Okauru AB, NGF, DG, substantive the and Jibia;

L–R: The Chairman, NGF, Gov. Abdul Aziz Yari Abubakar; ED, Finance & Admin, NGF, Alh. Alh. NGF, Admin, & Finance ED, Abubakar; Yari Aziz Abdul Gov. NGF, Chairman, The L–R:

Gov. Jibrilla Bindow (left) in a chat with governor Nyesom Wike Nyesom governor with chat a in (left) Bindow Jibrilla Gov.

Abubakar. governor of Enugu State, Hon. Cecillia Ezeilo, recently. Ezeilo, Cecillia Hon. State, Enugu of governor

Gov. Ibikunle Amosun (left) conversing with the Chairman NGF, Gov. Abdulaziz Yari Yari Abdulaziz Gov. NGF, Chairman the with conversing (left) Amosun Ibikunle Gov. The Ag. DG, Nigeria Governors’ Forum, Alh. Abdullateef Shitu (left) and the Deputy Deputy the and (left) Shitu Abdullateef Alh. Forum, Governors’ Nigeria DG, Ag. The

PHOTOSPEAK

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L-R: The Chairman, NGF, Abdulaziz Yari Abubakar; former Chairman, NGF, Chibuike Gov. Ibikunle Amosun (left) conversing with the Chairman NGF, Gov. Abdulaziz Yari Amaechi and the former governor Akwa Ibom State, Sen. Godswill Akpabio. Abubakar.

L–R: The Chairman, NGF, Gov. Abdul Aziz Yari Abubakar; ED, Finance & Admin, NGF, Alh. Jibia; and the substantive DG, NGF, AB, Okauru Esq in a chat. The governor of Kogi State, Yahaya Bello and Gov. el–Rufai of Kaduna State discussing

The governor of Edo State, Adams Oshiomohle (left); Gov. el Gov. Almakura; Chairman NGF, Gov. Abdu- The governor, Delta State, Ifeanyi Okowa (left) chatting with - Rufai of Kaduna State (right) in a chat with Amina Ibrahim, laziz Yari Abubakar and UN Secretary Gen- Page the governor of Sokoto State, Aminu Tambuwal. Minister of Environment. eral, Ban Ki Moon, recently. www.nggovernorsforum.org 07 NIGERIA THE EXECUTIVE SUMMARY Page

GOVERNORS’ P FAITH, EACE & PR ITY & OGR UN ESS FORUM A NIGERIA GOVERNORS’FORUM MOTHLY PUBLICATION 08 is The Secretariat Anda Philemon nda Philemon is a graduate of Univer- ties includes: organising Meetings/Conference sity of Jos, pioneer staff, contributed Support Staff, Funds-Development, Adminis- immensely in the formative years of trative duties and He is Senior Administrative Athe NGF to it’s present status. His du- Officer (SAO). Akanbi Olubunmi Omowumi Research Officer; reviews and analyses in the Agriculture and the Solid Mineral sec- States annual budget performance; de- tor, and recommends appropriate strategy for tailing policy shifts and trends, as well scaling up of these great economic sectors. Re- Aas the quality and quantity of capital/recurrent searchs, collates data, track and reviews perfor- expenditure. She monitors policy development mance of the critical sectors in the States. David Nabena s an Economist with the Nigeria Governors’ Fo- infrastructure and public financial management. In rum, Abuja, Nigeria. He provides policy guid- recent times, he has coordinated the following ac- ance on developmental issues at the sub-nation- tivities: Ial level and coordinates the Forum’s research with • Provide support to the development of international development partners including the policy and strategy guides for State governments, World Bank, United Nations development agen- including the “State Planning and Budgeting Pro- cies and the British Department for International cess at a Glance” which provides a functional link- Development programmes. His research interests age for a State Governor’s manifesto, State develop- are in the fields of economic development, energy, ment plan, sector strategy and budget. Blessing Kekeocha Ogbunammiri s a Research Officer / Secretary to the Executive Director, Finance and Admin As an Administrative Secretary she Keeps records of the Secretariat’s consultants where they Irelate to Human Resources, and Records for the ED(F&A) Unit. Hajiya Halima Salihu rs Salihu Ahmed is currently a Media and Publications Officer with the Nigerian Governors' Forum Secretariat, Abuja. She holds a Bachelor of Arts Degree from the University of Jos and a Masters in public Admin from the Nasarawa State University, Keffi. MShe handles Media monitoring of issues that affect developmental and policies in all states. Chinwe Juliet Chima echnical Assistant to the Director General Juliet is a highly effective and experienced Executive Assistant in the office of the Director-General. She is dedicated and has a proven ability to complete projects to the highest standards, with meticulous Tattention to detail, delivered within agreed timescales and to budget. Juliet is confident with abundant initiative especially in challenging environments. She is also able to manage a heavy workload regardless of the conflicting priorities.

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and audits are neither neither are audits and - im and articulated are budgetary reforms. budgetary ment but to match gen match to but ment - Capacity building Capacity - -

and accurate accounts accounts accurate and objectives policy where on public finance and and finance public on on the resource endow resource the on tion -

ly implemented. Timely Timely implemented. ly and reflected are cisions policies that boarder boarder that policies states vary depending depending vary states - administra Revenue -

- proper nor realistic ther - de policy many where the consistency of states states of consistency the The revenue base of the the of base revenue The capacity

- nei consequently are ets place the is hand other wards strengthening strengthening wards istration in the states. states. the in istration - Revenue generation generation Revenue -

- budg resulting the and the on budget The assets. level will be geared to geared be will level - issue of revenue admin revenue of issue states -

without consultation consultation without real and financial ment all activities at the state state the at activities all the of base Revenue • the is meltdown, nomic

ets are often prepared prepared often are ets - govern of use actual the In the next 12 months, months, 12 next the In interventions: - eco contemporary of

- budg State required. as on report accountants MDAs in the states. the in MDAs on the following main main following the on cognizance taking and

licated at the state level level state the at licated while needs, bursement building of strategic strategic of building the states and emphasize emphasize and states the perspective this within

- rep been not has MTEF - dis its meet to order provided by capacity capacity by provided at the federal. Crucial Crucial federal. the at ments made on PFM in in PFM on made ments

the medium-term; the the medium-term; the in cash government es cial management to be be to management cial programme with that that with programme - achieve on consolidate

on a rolling basis over over basis rolling a on - manag treasury The - finan on Expertise • nomic development development nomic This programme will will programme This

locate public resources resources public locate expenses. and revenue ysis for financial editors financial for ysis - socio-eco sub-national igency.

- al to budgeting in tive of frameworks annual in - anal budget on training in order to streamline streamline to order in - ex financial day present

- perspec multi-year a of reflected is policy, nomic sensitization: Media • work and priorities priorities and work system to conform to to conform to system

requires the utilization utilization the requires - macroeco of ponent sign (MTSS) sign - frame policy ernment need a review of the the of review a need

agement reforms that that reforms agement - com key a policy, fiscal - de policy Budget - framework and some some and framework - gov federal the with line

- man financial public because budget on focus islative budget offices budget islative this with required legal legal required with this in designed is activities

a crucial component of of component crucial a will others among efforts - leg of Establishment - have not buttressed buttressed not have of programme This

ture Framework MTEF, MTEF, Framework ture Intervention counting. law their PFM systems but but systems PFM their Context

- Expendi dium-Term - ac and treasury budget, - Public procurement procurement Public - have partially reformed reformed partially have

- Me the adopted (FGN) notably, most areas, al ity law ity in the states. Some states states Some states. the in outcomes.

Government of Nigeria Nigeria of Government - sever in inefficiencies - responsibil Fiscal - sustainable PFM system system PFM sustainable or plans expenditure on

systems. The Federal Federal The systems. entrenched by hindered - Organic budget law budget Organic - to entrench credible and and credible entrench to information to access

financial management management financial generally is level tional tional framework tional profile, there is need also also need is there profile, no has public the and

reforming their public public their reforming - sub-na the at ticularly - institu and Legal • eration with expenditure expenditure with eration delivered nor performed

made some attempts at at attempts some made - par Nigeria in agement

a number of states have have states of number a - man financial Public

sector. In recent years, years, recent In sector. level. sub-national

delivery to the public public the to delivery the at system PFM the

es available for service service for available es improve to measures

maximize the resourc the maximize of number a take to -

its the state’s ability to to ability state’s the its poised is (NGF) Forum

in Nigeria, which lim which Nigeria, in Governors’ Nigeria the -

weak at the state level level state the at weak issue, this of portance

PFM is generally generally is PFM - im the Recognizing

actions development. economic

weakness for priority priority for weakness overall and reduction ty

and identifying areas of of areas identifying and - pover for priority high

for evaluating progress progress evaluating for a is spending, public

system provides a basis basis a provides system of quality high ensures

formance of the PFM PFM the of formance that capacity, tutional

- per future and current - insti transparent and

outcomes. Assessing the the Assessing outcomes. strong and system PFM

fiscal and budgetary budgetary and fiscal sound a that suggests

beneficial impact on on impact beneficial budget, the of ment

velopment through its its through velopment - develop the through

- de national of enabler particularly affairs, cial

into a highly effective effective highly a into - so and economic on

federal and state levels, levels, state and federal impact strong its and

ment system, both at the the at both system, ment 2014, in % 21 and 2012

- manage financial public in % 18.5 2009, in GDP T

geria is to transform the the transform to is geria of 17% about

- Ni for challenge The Nigeria, in ing

terms. - spend public

plemented in concrete concrete in plemented of volume he

Making sense of Public Finance management Finance Public of sense Making

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GOVERNORS’ P FAITH, EACE & PR ITY & OGR UN ESS FORUM A NIGERIA GOVERNORS’FORUM MOTHLY PUBLICATION 10 is SURVEY: States plot ways to financial viability t is no longer news That the current economic crisis facing Nigeria has Imade it extremely dif- ficult for most states across the country to remain afloat finan- cially. The economic situation appears to be quite dismal, as 27 states have been unable to fulfil their basic financial obligations, especially paying workers’ salary. President Mu- hammadu Buhari has described the situation a “national disgrace’’ which the Federal government to diver- no reason to go bank- blamed the current and blamed the errant Government gave 27 sify the economy, say- rupt if the governors economic crunch on states for not saving for states in 2015.As the ing: “I am very happy had managed their re- “misplaced priorities the future.The Nige- parlous financial situ- that we are facing this sources from 2007 to and mismanagement rian Labour Congress ation continues, some economic crisis as a May 2015 judiciously. of resources’’, urged the (NLC), whose mem- of the cash-strapped nation.“We have learnt Insisting that Nigeria states to diversify their bers are bearing the states are now cutting a lesson now that there was undergoing eco- revenue base.“State brunt of the financial workers’ wages, to the is need to diversify the nomic crunch because governors must ex- collapse, has threat- dismay of workers and economy and depend of gross mismanage- plore the revenue po- ened to declare a state their unions.Nigerian less on proceeds from ment of resources, Udo tential of agriculture, of emergency over sal- states have never expe- crude oil,’’ he said.The Essien recalled when tourism and mining, ary default.“We will rienced this financial governor’s reassuring oil sold for over 100 among others. If they declare a state of emer- hellhole before. And view notwithstanding; U.S. dollars per barrel, can invest in such sec- gency because workers no one knows when it majority respondents the state governments tors, their states will be should not be made to will end as allocations in the survey blamed never thought of sav- able to break even,’’ he bear the brunt of the from the Federation the current economic ing or investing for the said.Mr. Udo Agoha, challenges because Account to states con- crisis on corruption, future.Mr. Timothy Imo Commissioner they are not responsi- tinue to plummet as a financial mismanage- Odaa, a former Com- for Agriculture, Envi- ble.“When the econo- result of a drastic fall in ment and misplaced missioner for Finance ronment, and Natural my was good they did crude oil prices in the priorities, among and Economic Plan- Resources also urged not enjoy, now that international market. others, and they out- ning in Ebonyi, urged the states to increase there is a challenge, States are groaning, as line the way out. The the federal and state their investment in ag- they are the worst-hit, the funds allocated to consensus is that the governments to ini- riculture to overcome it should not be so; them by the Federal states must diversify tiate pragmatic strat- their current econom- these are our argu- Government are not both their economies egies to diversify the ic challenges.“In Imo ments,” declared Ayu- even enough to pay and revenue sources economy.He stressed State, for instance, if ba Wabba, President their workers’ salaries. to survive.Ms Rahinat that the prevailing eco- the state government of the NLC.A nation- Gov. Abiola Ajimobi Abu, a retired bank- nomic crisis required can massively invest in wide survey conduct- of Oyo State lamented er in Lafia, Nasarawa a structured diversifi- cassava, cashew, palm ed by the News Agen- that Oyo State, with a State, blamed the crisis cation of the economy oil, fishery, aquacul- cy of Nigeria (NAN) monthly wage bill of on government’s fail- for enhanced revenue, ture and livestock, it confirmed that over N5.2 billion, has been ure to invest its huge instead of the reliance will earn billions of na- two-thirds of the states receiving an average of oil revenues in the past of states on monthly ira monthly and pro- were still defaulting N2.6 billion from the in the development of allocations from the vide job opportunities with the payment of Federation Account. other sectors.Mr. Ntu- Federation Account. for the unemployed. workers’ salaries in He, however, said that do Udoessien, a char- Malam Danraka Dari, But some states are al- spite of the N338 bil- the economic crisis tered accountant in a lecturer in Kaduna ready thinking along lion bailout funds was an opportunity for Calabar, said states had State University, who those lines.

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For most States, IGR contributes very little to their recurrent revenues. Only Lagos recorded an IGR share of recurrent revenue over 50%, even as 24 States performed below the sub-national average of 17.6%. Federation allocation to states: The rise in gross deductions

lummeting oil enues of State govern- prices since June ments and their ability 2014 has contin- to service both financial ued to set off an obligations and develop- Peconomic unravelling ment programmes. As a in Nigeria. In recent result, borrowing activi- times, the country has ties rose significantly, as recorded notable con- the economy witnessed traction in both eco- increased demands for nomic growth and its loan facilities and bail- historically fragile fiscal out packages. This trend space. This transition has led to higher down- has revealed a largely side pressures from spurious growth which federation deductions, characterised the econ- which have continued to omy since 2000, driven shrink the already falling by oil production and federation revenues. low-productive tertiary Increased borrowing activities. The country’s activities have led to a federation revenues wider divergence be- have since fallen by over tween the gross and net 70% from over N1.1 allocations to States. Source: OAGF trillion recorded in June Over the last two years, 2014 to N305 in June gross allocation declined nificantly from around monthly deduction of illustrates the rise of fed- 2016. by 62% while net alloca- 8% in 2014 to 13% in N30 billion in June (see eration deductions fol- At the sub-national tion fell even higher by 2015 and over 26% in the table 2), nearly twice the lowing the introduction level, the impact was a 71%. Total service de- second quarter of 2016 N17 billion average re- of the bailout package in sharp slide in the rev- ductions increased sig- – reaching a nominal corded in 2014. Table 2 August 2015.