Follow Us on Google
From Femi Folaranmi, Yenagoa
The Bayelsa State government has rejected the recently released Fiscal Performance Ranking by BudgIT which ranked Bayelsa 35th out of the 36 states of the federation.
The Commissioner for Finance, Mr Maxwell Ebibai, in a statement entitled “BudgIT Report: Our Position”, said the report was “merely a rehash of last year’s ranking.”
Ebibai who faulted the report also picked holes in it noting that it “relies on tangential parameters inconsistent with economic fundamentals.”
He stated that it erroneously depended on opaque data and criteria bordering largely on the ability of a state to meet its recurrent expenditure with only its Internally Generated Revenue.
According to him creating a dichotomy between Federal Allocations and Internally Generated Revenue is a misnomer that has attracted protest from the state government which is advocating for true fiscal federalism.
Ebibai criticised the report for not appreciating that oil and gas are produced at a significant opportunity cost to states and that the derivation revenue compensates for such brutal environmental degradation.
The statement read in part:
“It should be worrisome to BudgIT that the huge revenue that should accrue to Bayelsa State from taxes of oil multinationals operating in the state were being paid to states where the companies have their offices domiciled.
“Notwithstanding the disequilibrium, we are happy to state unequivocally that the financial standing and sustainability of Bayelsa State are sound and not in any jeopardy as the government can comfortably meet its obligations, including regular payment of salaries and pensions.
“It is also disturbing that a state with a low debt profile that is effectively managing its financial liabilities would be ranked low against states with a higher debt profile. More so, we are clearing the debts. On biometric capturing of the state’s civil servants, we have successfully concluded the process to achieve payroll transparency. Following this, salaries are paid promptly usually by the 25th day of the month.
“The government continues to invest in human capital development and empowerment programmes, without neglecting critical financially demanding infrastructure projects such as the Yenagoa-Oporoma Road and Bridges, the Sagbama-Ekeremor Road with seven bridges and the Nembe-Brass Road with 10 bridges as well as other critical big-tickets projects across the state that will stir its economic life.
“It should be noted that states with limited federal presence are inherently disadvantaged with the ranking methodology where facilities like ports give a clear edge to some states.
“For a fair analysis and a more comparable measure of fiscal sustainability, BudgIT should expand its indices to cover derivation revenue as IGR in future profiling.
“We are, therefore, in strong disagreement with the ranking as released by BudgIT, and wish to state categorically that Bayelsa State Government rejects the report as it failed to rely on key financial instruments that are legitimate, equitable and sustainable.”
