Governor Ifeanyi Okowa, Presenting the 2018 Budget to the State House of Assembly Recently
ASABA/Nigeria: The Delta state government had again called for the review of the federal allocation formula, it tells critics that the Paris Club refund was not a favour being done to states by the Federal Government.
Speaking through the State Commissioner for Finance, Olorogun David Edevbie, today October 23, 2017 at a post budget presentation press briefing, coordinated by the Commissioner for Information, Mr Patrick Ukah, at the Press Unit, Government House, Asaba, also stated that the state got the bailout from the federal government, because the federal government could not ignore other states, as the issue of bailout mainly affected the All Progressive Congress (APC), states.
The Finance Commissioner noted that the refund was the over deduction the Federal Government made to the Paris Club beginning from 1995, saying interest ought to have been paid for it.
Explaining further the misnomer in the deduction, he said the Federal Government used the fund meant for the three tiers of government to pay for debt owed by the federal government, disclosing that N33 billion had so far been released in tranches.
He said that while the first tranche was N14.5 billion, the second one amounted to N8 billion and the third N10 billion, indicating that out of the N33, billion, the sum of N7 billion was for Local Government Councils while N12.6 billion was spent on salary and N14 billion went to capital expenditure.
On whether the President of the Country, Muhammadu Buhari directed the State Governors on how to spend the Paris Club refund, Olorogun Edevbie said there was no such directive, explaining that constitutionally, the President had no such power to issue directive on how States should spend their funds.
He said that some of the money from the refund had to go to capital expenditure to cater for the interest of Deltans that were not in the payroll of the State Government.
Giving a performance breakdown of the 2017 Budget breakdown, the Finance Commissioner said that N58 billion was spent on addressing salary and pension issues while N42 billion went to capital project.
On insinuations that the country had come out of recession, he said the indicators that the country experienced 0.55 positive growth in the fifth quarter of recession supported the claim.
He however noted, “We are not yet feeling the claim that we are out of recession. It will take a while, just as it took some time before we entered recession.”
BAILOUT FUND
On the bailout fund, Olorogun David Edevbie said Delta State was an accidental beneficiary.
He said Delta State benefitted because the recession affected adversely most of the All Progressive Congress (APC) States, noting that there was no way the Federal Government could have given bailout to the APC States alone.
He emphasized that the bailout fund was a loan but to be paid back at very friendly terms, saying that out of N10 billion the State received, the sum of N3.26 billion went to Local Government Council, while N2 billion was expended in addressing pension arrears, N2 billion for primary school teachers’ salary and N3.5 billion for salary of State Government workers.
FEDERAL ALLOCATION
Addressing issues on why virtually all states are complaining of lack of funds and the local government council not able to perform their statutory roles, the Finance Commissioner blamed the cause on the Federal Government, noting that too much money was going to the centre.
He said the Federal Government was reluctant to initiate a review of the federal allocation formula because it does not want the present status-quo to change.
According to Olorogun Edevbie, review of the formula ought to take place every three years but lamented that the last time a review was done was in 1992.
He said the inability of the Federal Government to address issue bordering on fiscal federalism and resource control was largely responsible for the recurrent agitations for restructuring in the country.
