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From Stanley Uzoaru, Owerri
The Minister of Finance and Coordinating Minister of the Economy, Professor Taiwo Oyedele, says no Nigerian state is currently struggling to pay salaries, attributing the improvement to ongoing fiscal reforms and better federation accounts management.
Oyedele stated this on Monday at the opening ceremony of a four-day retreat of the National Conference on Fiscal Federalism and Economic Diversification, (NACOFED), in Owerri, the Imo State capital.
He thanked Governor Hope Uzodimma for hosting the retreat, saying Imo, described as “the heartland of the nation,” is a fitting venue because decisions taken here determine economic growth across the country’s 774 local government areas.
“This year’s theme was not chosen for its eloquence but because of the challenges of this time,” Oyedele said. “NACOFED exists for this purpose. Members of the committee engage with experts not to use this year to compare notes, but to assess what the architecture we have built is delivering.”
Referencing the removal of fuel subsidy, the minister said none of the choices made by the Federal Government were for popularity, and that many previous options were no longer sustainable.
For the first time in a generation, he noted, no state is struggling to meet salary obligations.
“For nearly 30 years it was tough. As few as five states faced difficulty paying salaries in 1999. That number rose to as many as 27 states unable to pay salaries just about three years ago. But today, no state struggles to meet salary obligations. And that is not a footnote. It is because the federation is now working. That is fiscal federalism doing what it exists to do,” he said.
Oyedele said the size of allocations announced at Federal Account Allocation Committee meetings is not the true test of federalism.
“The real test is what that number becomes in the life of the market woman in Owerri, a teacher in Sokoto and a young graduate in Yenagoa. And this is where equity comes in. It is an unfinished conversation.”
He said coordination between Abuja and the 36 state capitals is only half of fiscal federalism. The harder part, he added, is equity among the units of the federation themselves.
“We cannot build a resilient fiscal federation around assumptions that every state has the same revenue base, population pressure or security burden,” he said. “That is why, on micro fiscal reform, the Federal Government has expanded targeted programmes. Cash transfers are now reaching 15 million people, and we have launched the Hope and Solid programmes designed to reach citizens in communities where revenues cannot close the gap.”
“Equity is not charity. It is the recognition that federalism is only as assured as its most fiscally vulnerable members, and instability in one state does not stay contained within borders,” Oyedele added.
He also asked whether enough is being done to reward states that grow their Internally Generated Revenue, IGR, rather than rely only on monthly allocations from the centre.
“These are not questions meant for the Federal Government to answer alone. They are precisely why NACOFED exists,” he said.
“I hope the retreat will achieve meaningful progress. The centre must drive economic stability, prosperity must happen in states, and better living standards must be delivered at the local government level. That is not a division of convenience, but responsibility.”
Governor Hope Uzodimma, represented by his deputy, Dr. Chinyere Ekomaru, dedicated the gathering to the late Chief Emmanuel Iwuanyanwu and expressed appreciation to President Bola Ahmed Tinubu for what he called “visionary leadership that is repositioning our economy.”
Ekomaru said the theme of the retreat is apt and timely, noting that economies across the world are under pressure and states face challenges in raising and generating revenue.
In Imo, she said, the administration’s 3R mantra has worked well in developing the state’s economy.
“Imo is open for business,” she said while declaring the retreat open.
