Sat, Sep

Governor Oluwarotimi Akeredolu of Ondo State has raised the alarm that many states of the federation may go bankrupt if the revenue sharing formula, which is tilted towards Federal Government, is not reviewed.

Akeredolu said with the increase in the minimum wage from N18,000 to N30,000, many states would go bankrupt over their inability to pay salaries and execute projects in the states. Featuring on a live programme on the state-owned OSRC, tagged “An Evening with Mr. Governor”, Akeredolu also said the implementation of the National Finance Intelligent Unit (NFIU) would lead to local governments owing teachers’ salaries. Pointedly he said the governors, under Nigerian Governors’ Forum (NGF), have gone to court to challenge the decision of the Federal Government on the local government funds.

According to him, the only federation we have is states and not local governments. He said the Federal Government was not aware of the decision of the NFIU.

On the review of the revenue sharing formula, Akeredolu said the finances of majority of the states are low and may go bankrupt if they are to pay the new minimum wage for workers. His words: “On this revenue sharing formula, something has to be done about it. We cannot continue the way we are. If we continue that way, a number of states will probably go bankrupt. “People that have not been paying salary for months, you ask them to pay N30,000. For me, there are lots of states that cannot afford it. So, many would resort to borrowing.”

He revealed that many states cannot continue the way they are now as a lot of them are not able to pay salaries of their workers despite the latest increment in the minimum wage to N30,000. He said the new minimum wage was already creating a lot of fears in the mind of many state governments.

The governor said the states have been experiencing dwindling allocations from the Federal Government in the last four months which, he said, has worsen the financial situation of the states.

Speaking on the security challenges facing the country, Akeredolu said that efforts are being made to surmount the challenges, just as he suggested that there must be a tracker in each state of the federation to tackle crime. He said no governor can sleep with the level of criminal activities across the country.

The governor said the recommendation of the security summit held in the state would be sent to the state House of Assembly for legislation. Akeredolu said the internally generated revenue (IGR) of the state has now increased from N700 million to about N1.5 billion per month. He said that government was targeting N2 billion to enable it provide more dividends of good governance without putting unnecessary financial burden on the people.



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