NEWS

CBN Explains Why States Can’t Pay Salaries

The dwindling resources of states and local governments suffered a 30.6 per cent fall from federation account allocation in April 2015 when compared with what the states got in the same period last year.

Central Bank of Nigeria, CBN, Economic Report for the month of April said that the total statutory allocation to the state governments stood at N153.45 billion in April 2015. This was 30.6 and 22.9 per cent below the 2014 monthly budget estimate and the level in the preceding month, respectively. The dwindling revenue of federal, state and local government is as a result of falling oil prices.

Giving insight into the poor financial status of states which depends on monthly federal allocation, the CBN report for April said: “The breakdown showed that at N119.27 billion or 77.7 per cent of the total, state governments’ receipt from the Federation Account was below both the 2014 monthly budget estimate and the level in the preceding month by 29.7 and 30.3 per cent, respectively.

“At N34.17 billion or 22.3 per cent of the total, receipts from the VAT Pool Account was below the monthly budget estimate by 33.4 per cent, but exceeded the level in the preceding month by 22.2 per cent. Total receipts by the local governments from the Federation Account and VAT Pool Account stood at N88.91 billion at end-April 2015.

“This was lower than both the budget estimate and the level in the preceding month by 33.8 and 19.7 per cent, respectively. Of this amount, receipts from the Federation Account were N64.99 billion (73.1 per cent of the total), while the VAT Pool Account accounted for N23.92 billion (26.9 per cent of the total).

“At N735.07 billion, estimated federally-collected revenue in April 2015, was lower than the monthly budget estimate by 9.8 per cent. It was, however, higher than the receipt in the preceding month by 35.8 per cent. The decline in estimated federally-collected revenue (gross) relative to the monthly budget estimate was attributable, largely, to the shortfall in receipts from oil revenue during the review month

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