he current economic meltdown caused by the fall in the prices of oil in the international market has posed a major challenge to the state governors on how to generate revenue to run their states, FISAYO FALODI writes

Osun State Governor, Rauf Aregbesola, stunned the public last Sunday with a revelation that his state received N55m as allocation from the Federation Account for the month of September. The governor lamented the disturbing impact the money would have in the discharge of his responsibilities as he said that the allocation was not enough to pay the monthly electricity bill of the state secretariat. It is on record that Osun State was collecting N3.8bn as monthly allocation from the Federation Account before now.

No doubt, Aregbesola’s lamentation is a typical example of what most governors in the country are passing through as a result of their over-reliance on the Federation Account. The economic meltdown caused by the fall in the price of oil in the international market is taking its toll on them.

The governors started facing the daunting reality of the scenario when they realised that the situation might not likely improve anytime soon, despite the recent bailout they received from the Federal Government to pay the outstanding arrears of their workers’ salaries.

When the price of oil, the country’s main foreign earner, fell from $126 per barrel to $41 per barrel, little did the governors know that their creativities and administrative acumen had been put to the test, especially in the area of generating funds to discharge the responsibilities of their offices.

The governors expressed their helplessness over the situation when they said they might no longer be able to pay the N18, 000 minimum wage. They also toyed with the idea of downsising the workforce to enable them to generate funds to run their states.

Led by their chairman, Governor Abdulaziz Yari of Zamfara State, they admitted that the dwindling price of oil had drastically affected their states’ income.

The governors, however, stressed the need to diversify the country’s economy from petroleum to agriculture and mining.

Before the governors’ call for the diversification of the economy, a few of them, such as Senator Ibikunle Amosun (Ogun State) and Mr. Ayo Fayose (Ekiti State), among others, have initiated various ways to generate revenue to complement the allocation from the Federation Account, but critics said such approaches were poorly managed and counter-productive.

For example, the Homecharter scheme introduced by Amosun in 2013 to enable property owners in the state to regularise their documents was described as a noble proposal because it was believed that the scheme would put more money in the government’s coffer.

The scheme promised to deliver Certificates of Occupancy to home owners in six months with just N100, 000. The scheme became over-subscribed, but today, the people are willing to pay to regularise their papers but the state government remains helpless.

An investment consultant, Mr. Abdulmalik Waheed, said the scheme was noble, but wondered why it was not properly implemented by the state government to generate more revenue.

Waheed said, “The state could have generated huge revenue from the scheme if the government had matched its intention with action. It is unfortunate that such a noble scheme was poorly implemented.

“The enthusiasm that greeted the acceptability of the scheme began to decline when the people discovered that its purpose may be defeated after all.”

In spite of such initiatives, the governors are still battling with the problem of inadequate fund to run their states.

However, with the 33 million barrels of Nigeria’s crude oil on the sea without buyers willing to pay for them as Aregbesola pointed out last Sunday while inaugurating a new project in Ayedaade Local Government Area of the state, analysts have suggested various ways which the 36 state governors could weather the storm of the current economic meltdown.

Prof. Adeola Adenikinju of the Department of Economics, the University of Ibadan, suggested two ways. The first is to increase revenue and the second is to cut cost. According to him, the governors should implement both measures to meet the challenges of their offices.

He said, “Generating revenue is not one-way traffic. The governors are just looking at it from one side. Just as the Federal Government is trying to do by initiating cut-costing committee, the governors too should find a way to also cut their costs of governance.

“They need to reduce wastage and reduce the cost of their lifestyles. The governors must also find way by which to restructure their debts. Part of the problem is that many of the states are in debts. Their creditors usually deduct a lot of their money right from the source. So, what comes to the states after the debts must have been deducted is so small that the governors can hardly do anything with it.”

On how to increase revenue, Adenikinju asked the governors to introduce tenement rates like taxing big properties.

He said, “These properties can be taxed to raise fund, but there must be responsibility. Once you tax properties’ owners, you must ensure that the taxes collected from them are spent on verifiable projects. Once the people see what they pay for, they will be keen to pay more.

“The governors should provide decent environment for business and investors so that they can raise taxes from them.”

The Professor of Economics, however, expressed concern that the government’s intention to diversify the economy to agriculture might remain a tall dream unless the government encouraged farmers with market support services that could enable them to sell their produce to supermarkets or even export the produce.

He said, “The truth is that many people have embraced agriculture now, but they are inhibited by a number of reasons. One, access to land is expensive in some areas. Two, access to credit is difficult.

“There should be quality control of agricultural products to enable farmers to sell directly to supermarkets.”

A labour consultant and lawyer, Mr. Femi Aborisade, asked the governors to tackle corruption and probe the past administrations in their individual states as well as recover looted wealth by former top public officers in the hope that in the future, current public officers would also be probed and prosecuted by their successors.

He said, “Such probes will serve as a deterrent to existing public officers that inevitably, they would sooner or later account for their deeds while in public office.

“Members of the public must be unanimous that the assets of all current and former top public officers that are incompatible with their status should be seized and forfeited to public vaults. That is one sure way to boost the economies of states.

“Governors should reduce their salaries and allowances to reflect the distressed economic realities of Nigeria. It is an unacceptable paradox that the earnings of elected and politically appointed public officers in Nigeria are rated among the highest in the world while the poverty level is one of the highest in the world.

“Citizens should not leave the issue of how much the governors earn to the discretion of the governors. Citizens should agitate that the legislature should pass a law that will limit the salaries and allowances of a governor and other elected public officers to not more than about 10 times the national minimum wage. In that context, only those who want to serve the public selflessly will indicate interests in contesting for public offices. When the remuneration of public officers is regulated in this manner, resources will be saved for public good.”

Aborisade also asked the government at all levels to have a rethink about their new found love where they say, “government has no business in business,” or “all a government should do is to provide conducive environment for the private sector people for national economic development.”

He said, “By this perspective, about 1,500 public companies belonging to the federal, state and local governments have been privatised since 1986. This is why unprecedented rate of unemployment, illiteracy, diseases, debilitating poverty, hopelessness and so on, have produced unimaginable phenomenal proportions and forms of insecurity – Boko Haram insurgency, kidnapping for ransom and the recent phenomenon of daylight armed robbery in the traffic congested streets of Lagos.

“The philosophy that “government has no business in business”, which has been adopted by all ruling political parties in Nigeria is unconstitutional. The Nigeria’s Constitution mandates government to own, establish and control economic enterprises in order to employ citizens and generate resources to meet their basic needs. The constitution does not mandate the rulers to shift responsibilities of government to the private sector.

“For example, rather than the government paying their employers’ housing allowance, it should empower the Ministry of Housing to build housing units and sell or rent to public officers who need them such that direct deductions are made from monthly salaries for housing that is provided rather than paying housing allowances to public officers who are compelled to pay exorbitant rents to private landlords. A massive investment in housing in this way would have multiplying economic effects on living standards, employment and revenue generation for governments.”

A commentator, Mr. Samuel Akintade, asked the governors to shun projects that are counter-productive. Akintade mentioned such a project to include the airports that Fayose and Aregbesola proposed to build.

According to him, investing huge amount of money in the airport project now does not make any economic sense.

Akintade said, “The airport project is a great idea, but the construction should not have been now. Those hectares of land set aside for the projects in the states should have been used for mechanised farming, which will generate more revenue and employment for the people, especially youths now that the governors are clamouring for the diversification of the economy.”

He said Fayose has suspended the idea of building an airport in Ekiti, but noted that it was regrettable that many economic trees and cash crops had been destroyed in the 4,000 hectares of land earmarked for the project, thus rendering the farmers cultivating the land jobless.

Akintade, however, asked the state governors to adopt the method, if the need be, the Lagos State Government used to survive when former President Olusegun Obasanjo seized the state’s allocation some years back.

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The time has come to test the ingenuity of these governors to clearly know how many empty heads we voted into power. In the face of hardship & economic meltdown, the empty-head governors are now presented with the chance to put their so called academic prowess into action & deliver dividends to the people who voted them to power. Now, the Nigerian voter will also understand where he's gone wrong in voting a non-entity to power.

Gone are the days of easy money from federal govt & looting will become more glaring if anyone attempts it. How is it possible to steal from the #55m allocated to Osun State when in fact the same amount can't buy you a mansion in Lagos.

I am interested in seeing how Engineer Aregbesola of Osun State will turn things around with his team of block heads who are now put to work to deliver their state... chai! This economic hardship is a blessing in disguise if 'm allowed to infer because the masses will be better informed & will surely know better.

God I thank you for every situation in Nigeria knowing fully well that you are working out our deliverance.

God bless the precious people of Nigeria!
God bless PMB & VP YO!!
God bless the Federal Republic of Nigeria!!!

omooba969:
The time has come to test the ingenuity of these governors to clearly know how many empty heads we voted into power. In the face of hardship & economic meltdown, the empty-head governors are now presented with the chance to put their so called academic prowess into action & deliver dividends to the people who voted them to power. Now, the Nigerian voter will also understand where he's gone wrong in voting a non-entity to power.

Gone are the days of easy money from federal govt & looting will become more glaring if anyone attempts it. How is it possible to steal from the #55m allocated to Osun State when in fact the same amount can't buy you a mansion in Lagos.

I am interested in seeing how Engineer Aregbesola of Osun State will turn things around with his team of block heads who are now put to work to deliver their state... chai! This economic hardship is a blessing in disguise if 'm allowed to infer because the masses will be better informed & will surely know better.

God I thank you for every situation in Nigeria knowing fully well that you are working out our deliverance.

God bless the precious people of Nigeria!
God bless PMB & VP YO!!
God bless the Federal Republic of Nigeria!!!

You are so on point!

Bar man, abeg give this my guy one bottle of St. Remy!

kadas01:
You are so on point!

Bar man, abeg give this my guy one bottle of St. Remy!

@bolded,

You na man!

omooba969:


@bolded,

You na man!

Carry on bro!

The ingenuity of the mind is valued through making the maximum out of the minimum. These governors are empty minds and the dwindling revenue from oil has really exposed them! Take Ogun State for example, it is Lagos State's neighbour and five times the size of Lagos and only serving as the gateway to Lagos for trailers loaded with farm produce from the North.

On a daily basis, Lagos with its over 20 million residents spends billions of Naira on food that are brought in from outside of the state, how much is Ogun state making from the billions Lagosians are spending daily on food? Why should trailers from the North loaded with cabbages, lettuce, cucumber etc pass through Ogun State for onward delivery in Lagos when Ogun state is in a position to grow them and so enjoy the advantage of proximity?

One only need to imagine the thousands of youths such vegetable farming would engage, more money circulating within the state while the government is collecting their tax from such enterprise. Truly our governors are close minded!

Are this governors blind?
.. Imagine fayose wasting 4000 hecters of land
.. I can make that land make over 30bn in a year for the state
.. . Our leaders are really short sited am really disappointed

Your eye don open ba

Any Governor that can't at least pay salries, has failed woefully and should resign Immediately.

Meanwhile;

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Generating revenue by states now is like trying to reap when they never sowed.

How do you collect tax from people who are not working?

The main problem is that the Nigerian government focus more on making money than enabling an environment where people make money first.

When the richest people in any society are political players and cronies how do you collect tax?

Instead of them to look inward on how to strengthen their IGR, they are busy lamenting, I wonder why they cannot shift their focus on the Agric sector that can yield internal revenue for the states.

If you are directly or indirectly close to any of the governor's or local government chairman in the country and they are SERIOUS about increasing IGR for local government council's please contact Gabriel on 09053550621 08032270271(WhatsApp).

A facilitator's fee awaits you on successful deployment for per local government council.