Governor Adams Oshiomhole of Edo State says failure of the Federal Government to remit allocation to states from the federation account is crippling the nation’s economy. The Governor in a media chat as part of activities to mark the nation’s 53
rd Independence Anniversary of the country said many states are unable to pay salaries and meet other financial obligations and this may have serious security implications.
The Governor who said he cannot say if the Federal Government is broke as some people insinuate as he is not a Federal Government worker however said this is the first time since 1999 that the Federal Government will be finding it difficult to meet its obligation to states.
His words: “I don’t know if the Federal government is broke but I know there is serious crisis and it is unprecedented in the history of this country. For the first time since 1999 allocations can no longer come as at when due to states.
“I have been involved in trying to understand what the reasons are and I have not seen anything yet. Whether we use the word broke or you deny the word broke, the truth is that there is financial crisis in Nigeria which has very serious national security implication.
“Because when we can’t pay salaries, Federal Government can’t pay salaries as at when due, and you can’t pay your contractors and your contractors will begin to retrench their workers, that is recipe for national disaster. So I am hoping that NNPC should wake up and meet its obligation to the federation account otherwise, the integrity of government is at stake, if I can’t keep my promise, federal government can’t keep its promise, all other governors can’t keep their promises, the Nigerian electorate will be so disillusioned and it could be a disaster. So I am hoping that the NNPC recognizes that it cannot be business as usual and they have few cases to answer as far as I am concerned” he said.
Oshiomhole narrated further that “two years ago it was about the kind of money we were spending on subsidy. In no time, following series of probes and enquiries by the National Assembly and by the presidency they have since discovered the kind of money they stole as regards subsidy, all the people that conspired with them and I believe the EFCC is dealing with that. But just as we are dealing with that, now we begin to hear about the theft of our crude oil such that what is accruing to the federation account is not enough to meet budgetary provision.
“As you know this year’s budget was based on $79 per barrel, that is about 2.4, 2.5 million barrels per day. Now the good news is that contrary to all the forecast, nothing is getting better. And it is sad that we are not doing enough to change things for the better, the challenge of government in any part of the world is to deal with the issues. If the economy is not doing well, you do certain things differently and recover.
“Well it is no more matter for debate, we are ten months into the New year and oil has performed very well, at about one hundred and five, one hundred and ten dollars per barrel throughout 2013. Which means that if we have budgetary provision of $79, we ought to have a surplus of about 30 per cent, which should be in the crude oil account. But rather than having this surplus, we are witnessing a situation where Federal allocations no longer come as at when due, states can’t pay salaries.
“In Edo State, like the rest of our 36 states, part of our July allocation has not been paid. About a third of our August allocation has not been paid and nothing has been paid for September allocation. And it is the first time since 1999 that this thing has happened. The explanation by NNPC is completely watery.
“They collect 455,000 barrels per day for domestic refinery, but they also agreed that the refineries are not working, that the very best they can not refine more than 100,000 barrels per day, so the question is what you are doing with the balance of 355,000. So why will you run business like that, you take 455,000 barrels a day to refine, even when your refineries are not working. Okay whether the refineries did it, where is the money.
“If you multiply one hundred and nine dollars by 455,000 barrels per day, you will imagine the kind of money NNPC ought to be paying into the federation account. And from some of the figures that have been thrown around, NNPC is owing the federation account over N2.3trillion. And Edo state has a share of that amount that will run into several billions of naira. But last month, many states could not pay salaries, but in Edo state, we were able to pay. Even the federal government could not pay salaries; I think they paid July salaries around the 14th of August. But we paid August salaries in August” he stated.
On the kidnapping and general insecurity, the Governor blamed the media for promoting kidnapping by giving prominence to the vice, publishing how much the criminals ask for and how much is paid thereby attracting others into the criminal activity.
He however said the states law on kidnapping prescribes the death penalty for anyone caught. He security agents in the state are working round the clock to checkmate kidnappers and the state government has continued to provide security gadgets and other welfare packages for the security agents to encourage them to do their work.
On the slow of work on projects in the state, the Governor said no meaningful work can be done during the rainy season, stressing that any work carried out during the period will amount to waste of funds.