Tasking state governors on economic diversification

Amidst the economic recession in the country, experts say there is need for the governors to start diversifying their state economies and not wait anymore for allocations from the Federal Government, writes JESUSEGUN ALAGBE

The global fall in the prices of crude oil — a chief source of the country’s revenue — is undoubtedly one of the factors responsible for the economic recession the country is experiencing right now.

The low oil price has led to a drastic reduction in the Federal Government’s revenue from the commodity.

As of 2013 when oil prices were around $100 per barrel, states were very rich, with Akwa Ibom State getting as much as N260bn as allocation from the Federal Government, according to the then-Minister of Finance, Mrs. Ngozi Okonjo-Iweala.

Rivers State got up to N230bn; Delta, N209bn; Bayelsa, N173bn; Lagos, N168bn; Kano, N140bn; Katsina, N103bn; Oyo, N100bn; Kaduna, N97bn, while Borno got N94bn.

At that time, Okonjo-Iweala said many states were receiving revenue allocations larger than the budgets of neighbouring countries such as Liberia, Gambia and Benin Republic.

However, since oil prices started falling, many have become poor.

At the beginning of this year, the Federal Government and states recorded a drop in allocation from N387.77bn in December 2015 to N370.38bn in January 2016 when oil prices fell from $43.4 per barrel to $39.

In March 2016, allocations from the Federation Account to the three tiers of government declined by N18.2bn — from N299.74bn to N281.5bn.

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