ZERO ALLOCATION: Debt ravaged Osun, other states receive nothing from FG

– Osun, with some states got zero allocation in the month of April

– States in question owe federal government billions of naira

– Government of Osun yet to react to development

The government of Governor Rauf Aregbesola got zero allocation from the federation account in April after required deductions were done by the federal government.

The money removed from Osun’s allocation was part of the N32 billion removed by the government of the federation from states as repayment for bailout funds and other loans given to the affected states as well as the federal government.

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Osun received an allocation close to N2.03 billion from the federal income. However, this was not enough to pay its overall debt of N2.391 billion to the federal government..

When the Federation Accounts Allocation Committee (FAAC) concluded its meeting for April this year, Osun got zero allocation. This is because the state has not paid the federal government close to N361 million that will be removed from the months after April.

The director of Osun state Bureau of Communication and Strategy, Semiu Okanlawon, did not pick up his calls when findings were done to ascertain this development,. Likewise, Okanlawon did not reply to text messages sent to him on Sunday, August 21.

It should be recalled that the state struggled to pay civil servants wages, therefore not survive without its April allocation.

Other states ravaged in debt after Osun and which had bi removals by the federal government are Bayelsa, Cross River, and Ogun.

For Bayelsa’s N3.207 billion, an equivalent of 66.7%  was deducted from N4.812 billion allocated to the state in the month in question.

Other states with removals are Cross River, N1.405 billion (63.46%); Ogun, N1.185 billion (57.2%); Plateau, N1.248 billion (56.52%); and Ekiti, N1.067 billion (55.33%) in that order.

Governor Rauf Aregbesola of Osun state

The states with no removals were Akwa Ibom, Anambra, Jigawa, Kogi, Lagos, Rivers, and Yobe as well as the Federal Capital Territory. This was because these states did not receive the bail-out funds used for the removal.

It was not just the bail-out funds, which led to deduction of almost N3.078 billion from the debt ravaged states, loans the states were currently offsetting to the federal government include debts on Asset Management Corporation of Nigeria (AMCON) loans, commercial agricultural credit scheme, bond issuance programme, obligations to contractors, and removal from excess crude account.

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Other removals were refund/payment arrears of derivation, foreign loans, special intervention/flood management projects, the national FADAMA project and reconstruction of commercial bank loans into FGN bonds.

The government of Bayelsa explained how it will survive after losing two-thirds of its allocation to offsetting debts.

The Bayelsa state commissioner for Information, Jonathan Obuebite, stated that Bayelsa has employed measures to increase its internally generated revenue capacity.

Aside salary reduction of political office holders and members of the state executive council by 50%, the commissioner said Bayelsa evaluated its tax collection methods to capture evaders.

Obuebite stated that since the beginning of the of new revenue generation procedures, Bayelsa’s revenue generation increased from almost N100 million monthly to close to N500 million.

“Our target is to hit N2 billion every month,” he said. “Part of our strategy to realize that target is to get all the oil companies doing business in the state, including Shell, to pay their corporate tax to the state.

“Already, we are in court to get all the companies to begin to pay taxes in their area of operation. The state will be comfortable with that arrangement.” The commissioner concluded.

As part of strategies to make the economy better, vice president Yemi Osinbajo stated a few days ago that the federal government’s engagement with the private sector has been consistent and quite robust.

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