Experts, stakeholders say states may not have oil money to share in future
Lawmakers, state commissioners and other critical stakeholders have expressed concern over dwindling allocation to states from the Federation Account.
The stakeholders spoke in separate interviews with the News Agency of Nigeria(NAN) at the end of a three day workshop on Sunday.
The workshop, which was organised by the United States Agency for International Development(USAID) through its State2State Project for six focal states, focused on exploring robust Internally Generated Revenue(IGR) strategies.
The Commissioner, Budget and Planning, Sokoto State, Mai Nasara Ahmed, called on states to work towards boosting their internal revenue, saying there might not be much money to share at the federal level in future.
He stressed that without adequate revenue, providing basic social services like basic education, primary healthcare and Sanitation Water and Hygiene(WaSH)
would become a daunting task for most states.
“The essence of the workshop is to expand the frontiers of IGR of the various states that are stakeholders under the USAID State2State project.
“As we all know, the federal, states and local governments are grappling with the issue of revenue generation.
“This is to the extent that a number of projected projects in the budget are rarely met because of liquidity issues.
“The Federation Account which we all rely on, is to a large extent not feasible because of the current restructuring in the Nigeria National Petroleum Corporation(NNPC).
“We now have to focus on the non oil sector.
“Gone will be the days when we come to Abuja to share oil proceeds,” he said.
The commissioner commended USAID for collaborating with states to help them develop better finance management systems, including IGR strategies.
According to him, the workshop among other engagements will go a long way in widening the horizon of states’ revenue base so that they could carry out responsibilities emanating from capital and recurrent expenditure.
Ahmed noted that mindful of the turn of events, Sokoto State over the years made diversification of revenue source a priority.
“From generating about 500 million Naira in a month, Sokoto State through its policies to boost internal revenue began generating about one billion Naira monthly.
“Although we have not hit our target as a result of the COVID-19 Pandemic, we are designing a lot policies to widen the scope of revenue generation in the state.
“Sokoto State is blessed with mineral resources and there are various commercial activities that we are exploring.
“Another source of revenue being explored is property tax.
“We have property all over the state that we are not collecting taxes from.
“So, we will commence that by collecting revenue from the rich so that the poor can also benefit.
“We are equally working hard to block leakages.
“We are coming up with Sokoto State Geographical Information System as a tax net so that anybody or corporate entity that is captured in that tax net will not have where to hide,”he said.
In a separate interview, Member, Sokoto State House of Assembly, Malami Mohammed, said the workshop was a wakeup call for states to do the needful to meet up with their needs.
Mohammed, who is the Chairman Committee on Finance and Appropriation, noted that states were facing numerous challenges in terms of IGR.
He said one of the major challenges was lack of awareness on the importance of revenue to state development.
He stressed that some people did not pay tax because they believed it was a form of extortion, saying such people needed to be educated on the impact IGR could make in the overall development of states.
He further said that it was important for states to source for IGR from other areas other than oil, adding that the demand for oil was drastically reducing in the international market.
“The earlier states get serious about diversifying their sources of income, the better.
“A lot of states need to begin to think outside the box and rely less on FAAC by exploring their raw materials.
“Sokoto State for instance has so much limestone that need to be explored.
“Livestock is another area that Sokoto State is already generating revenue from and more revenue can be generated if we explore other value chains,” he said.
In another interview, Comfort Omaka, Head of Department, Revenue Collection, Ebonyi State Internal Revenue Service, said that the discussions from the workshop would be developed into a document that states could make reference to when developing IGR related polices.
She said, “the workshop was organised to help us find the way forward in terms of revenue generation.
“We know FAAC is really dwindling and states need to work hard to bridge the gap should FAAC reduce to an incredible level.
“In Ebonyi State for instance we have so much salt. It is the salt of the nation.
“We also have limestone, rice and many others.
“In terms of infrastructure development, the state government is building an airport, and state of the art shopping mall.
“With the takeaway from this workshop and policies already on ground in Ebonyi State there will be a boost in revenue generation of the state.”
The News Agency of Nigeria(NAN) reports that the State2State project is a five year project meant to run from 2020 to 2025.
It is designed to enable states in Nigeria to run accountable financial systems that would provide quality service in basic education, primary healthcare and other priority sectors.