The Progressive Governors’ Forum has debunked claims by
Governor Godwin Obaseki of Edo State that the federal government printed
between N50 billion – N60 billion to bridge the shortfall in the distribution
of federation revenues to the three tiers of government in March 2021, saying
that the claims did not reflect the true position of things.
The Forum, in a statement released to newsmen on Sunday in
Abuja, by its Chairman, Governor Abubakar Atiku Bagudu of Kebbi State, said at
first, the impression it got was that it was an off the cuff remark made in a
private meeting, but “we were, however, shocked to see yet another response
from our colleague to the rebuttal by the HM Finance insisting that the March
2021 FAAC was augmented via the printing of money.
The PGF stated, “Given the significance of the statement
from a sitting governor and the possible negative impact it has brought to the
credibility of both the federal and state government in managing government
finances, the Forum is obliged to put a statement out.
“To set the records clear and to the best of our knowledge,
the total distributable statutory revenue for the month of March 2021 was
N596.94 billion. Due to the shortfall in gross statutory revenues by N43.34
billion compared to the previous month, an augmentation was made in the sum of
N8.65 billion from the Forex Equalization Fund Account, which brought the total
distributable revenue to N605.59 billion.
“Federation revenues distributed monthly primarily consist
of mineral revenues from the sale of oil and gas, as well as non-mineral
revenues from customs and excise duties, company income tax, and value added
tax.”
“The Progressive Governors admits that there are periods
when the country experiences significant fiscal shocks in federation revenues
but says the shocks are offset by other savings serviced from the federation
account, including distributions from the domestic excess crude proceeds and
the foreign excess crude savings account.
“These payments started since 2008 when the country first
experienced fiscal shocks from the fallouts of the global financial crisis of
2008 – 2009. As a trained Economist who has been a Governor since 2016, Mr.
Obaseki is aware of all the support states have received from President Buhari
in coping with the shocks that have resulted from the CoviD 19 pandemic and
resulting economic recession.
“Not only have we received budget support, bail out support
to meet salary obligations and infrastructure refunds to all states, this was
implemented in the overall public interest without discrimination on the basis
of party affiliation. This is why it’s unfortunate and disingenuous to allege
preferential treatment of APC states when PDP governed states are even greater
beneficiaries of all the support,” said the PGF.
It said there was nothing exceptional in this current review
of economic orthodoxy because “almost every Central Bank in the world is taking
steps to support their government in coping with the effect of Covid 19
pandemic on the national economy. This has become the norm rather than the
exception as all countries grapple with the deleterious effect of economic
recession.”
The PGF continued, “This unfortunate and inaccurate
assertion by Governor Obaseki becomes even more worrisome when juxtaposed with
the official statement released after the meeting of PDP Governors last week,
calling for restructuring and greater devolution of powers to the States. It
would appear that matters that require the collective resolve of all leaders
are now being turned into purely partisan, point scoring claims.
“Every discerning Nigerian knows that the APC’s position on
restructuring and devolution is clearly articulated and accurately captured in
the report of Governor Nasir el-Rufai’s Committee on True Federalism. And the
APC Governors Forum has since made representation to NASS in furtherance of
that position. However, since there are constitutional boundaries, we cannot
usurp the responsibilities of the NASS on constitutional reform process, having
made our position known.
“These are challenging times for the country. The COVID-19
pandemic coupled with the recent macroeconomic challenges has had a significant
impact on government finances, however, both the federal and state governments
are working assiduously to confront the challenge through greater collaboration
to increase independent government revenues, rationalize non-essential spending
and improve the efficiency of public spending.
“Indeed, we are beginning to see the positive impact of
these initiatives given the country’s exit from recession in the first quarter
of 2021.”
The PGF said while the right to criticize and hold
alternative views is acknowledged, “all state governments have been equitably
treated by both the Federal Government and national institutions, particularly
the CBN. The support includes, among others, bailouts, special interventions
and various refunds that were owed to states prior to the Buhari
administration.”
It explained further, “For example, as of June 2015, 27
states could not pay salaries but the Federal Government provided support to
states to enable them to pay salaries and pensions. The federal government
equally refunded the longstanding claim by states on deductions made in 2006,
wrongly, to pay the Paris Club debt. Furthermore, states were refunded various
amounts for roads and other projects undertaken on behalf of the Federal
Government.
“In addition to the above, the Central Bank of Nigeria
designed and implemented various interventions which helped in stimulating
economic activity in all the states, and contributed to the country’s quick
emergence from recession in 2016 and 2021. Such interventions include the
Anchor Borrowers Programme, Accelarated Agriculture Development Scheme, Small
and medium scale enterprises support scheme as well as expansion of
pre-existing Programme such as Commercial Agriculture Credit.
“The world economy had been challenged in the last few years
with fiscal and monetary authorities responding in various ways to support
their respective economies. In all situations, the Central Banks had responded
to ease Credit and in a number of cases where interest rates were near zero,
quantitative easing measures were undertaken to expand money supply to the
economy.
“Given the constraints faced by the Nigerian economy, the
Central Bank of Nigeria had responded commendably well while still working hard
on exchange and interest rates. We urge the Governor, management and staff not
to be distracted. Equally, we are grateful to President Muhammadu Buhari and
his team for the support and partnership extended to all the federating units.
In addition to occasional meetings with Mr. President, the National Economic
Council, chaired by the Vice President, HE Prof Yemi Osinbajo, meets every
month and all issues are discussed transparently and exhaustively.
“It would therefore be helpful to admonish ourselves as
leaders to work collaboratively in tackling these challenges rather than resort
to cheap and demagogic point scoring in our quest to rescue the economy.”
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