In contrast to the Federal Government’s path of heavy borrowing to cut its way out of the revenue shortfall being experienced in the country, state governments have decided to toe a path in order to meet their financial obligations. This is according to the Chairman of the Finance Commissioners Forum of the 36 states of the federation, Mr. Mahmood Yunusa.
Yunusa, who was responding to questions by journalists at the end of the monthly Federation Account Allocation Committee (FAAC) meeting claimed that state governments are now looking to cutting costs and increasing revenue, especially in the form of Value Added Tax (VAT), withholding tax and stamp duty. This declaration is a contrast to what the Chairman of the Governor’s Forum, Abdulaziz Yari said last week when he claimed that states were looking at floating bonds on the Nigerian Stock Exchange in order to raise funds for capital projects.
All arms of government in the country have been battling with reduced revenues as the drop in oil prices combined with the country’s dependence on oil has impacted severely on the nation’s income. As a result, the Federal Government has resorted to heavy borrowing, a move that has been criticized by foreign finance experts.
The breakdown of the September allocation showed a continued decline in revenue accruable to each arm as the gross statutory revenue of N423.961 billion received for the month was lower than the N550.992 billion in the previous month.
