Resolving the cash crunch in states

All the 36 states governors met with President Muhammadu Buhari on Tuesday. This was sequel to difficult financial mess that both the states and the federal government have found themselves in the last couple of months. As at the last count, not less than 20 states of the federation owe worker’s salaries ranging between two to ten months. In some cases, some state agencies or parastatals owe more than 12 month salaries; in other cases they owe allowances, pension and other such payments. Even the local government administrations are not left out. The third tier of government is not left out of the precarious financial situation in the country and to worsen the already bad situation, even the federal government is said to be owing salaries too, or at least some of her agencies.

These debts are coming at a time there has been serious depletion in the foreign earnings of the country. This sharp decline began sometimes last year when oil prices began to plummet. From an all time high of $120 per barrel of crude oil just two years ago to less than $50 today. That’s in fact a tumbling. To make matters worse, oil, being Nigeria’s singular major foreign earner also has its internal problems -the Niger Delta crisis! It so happened that within the last four years or so, Nigeria lost not less than 300, 000 barrels of crude per day. At the peak of the Niger Delta crisis, some five or more years ago, we were losing even more hundreds of thousands of barrels either to clear theft or vandalism or both. That this country spends so much money on the same militants yet had to suffer the bleeding of oil theft while protection of pipelines and oil installations were handed over to former militants is a mystery the former administration of President Goodluck Jonathan may want to tell us. Therefore, a dwindling price regime has been compounded by the bleeding of our resources at oil installations. At a quota of 2.3 million barrels per day, this loss therefore of 400, 000 barrels is a huge loss of income. The stolen crude alone accounts for more than the quantity of oil Ghana, Gabon, Equatorial Guinea for example produce per day. While oil prices have dropped by nearly two thirds, we also do not manage to output up to our Organisation of Petroleum Exporting Countries, OPEC quota. This is what they call double jeopardy. It will be singing a familiar tune to suggest diversifying the economy. This has become a worn-out suggestion. The more painful part is that we have the capacity to; even if it is just to return to where we are coming from-good old agriculture. Indeed from crops to poultry, to animal husbandry, fishery and other forms of agriculture, it is telling just why as a country we have let ourselves down to evolve a home grown agricultural system that will not only put food on our tables but for the business to become a major foreign income earner. As at today, we are still importing over 70 percent of our rice, millet, beans, wheat, etc requirements. These food items listed alone accounts for about one trillion naira worth of foreign exchange. That’s a drain. To make matters worse again is the fact that we have good land. Therefore, it appears crude oil just made us lazy and greedy. While government officials steal our money, the people go begging. Whatever crumb is enough, it seems. It is gratifying however that although the governors were lobbying an equally broke federal government for bailout, but at the end of their meeting, it was revealed by the Chairman of the Governors Forum and Governor of Zamfara State, Abdul’aziz Yari that there will be no bail out, instead the federal government will refund all outstanding bills for jobs undertaken by states on behalf of the federal government; also, the meeting with the president agreed to share $1.5 billion tax payment made by the Nigeria Liquefied Natural Gas, NLNG. There were other measures listed to ameliorate the cash crunch at the local government, states and the FG. At least these will help ease the tension at the states in the coming days. Nevertheless, the experience of the last couple of months should now make government to first be good managers by cutting out frivolity; then invest in projects that are self sustaining and forego fanciful projects and blind borrowing. The time for governors and LG officials to think beyond sharing of revenue from Abuja is now! Obviously, it is not sustainable.