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According to sub-national debt data from the Debt Management Office, the combined debt of 10 oil-producing states increased from N2.04 trillion in December 2015 to N3.35 trillion as of June 2022.
This indicates that the states borrowed a total of N1.31 trillion over the course of nearly seven years.
Rivers, Akwa Ibom, Delta, Edo, Abia, Ondo, Imo, Cross River, Bayelsa, and Lagos are the 10 states.
Sources’ findings at the time indicated that the oil-producing states had received a federal allocation of N6.4 trillion and a 13% derivation fund.
At the sixth edition of the PMB Administration Scorecard on Thursday, Minister of Finance, Budget, and National Budget Zainab Ahmed revealed that the Federal Government distributed a total of N1.98 trillion as a portion of the 13% derivation fund to oil-producing states.
Despite part of the cash having been available before the present government, she claimed that the total was paid in seven years.
She declared, “Supporting states is one of the Ministry of Finance Budget and National Planning’s primary responsibilities. The President is fully aware that without this economy, we could not have recovered from recessions twice or had consecutive growth.
Without allowing the states to expand, we wouldn’t have been able to grow regularly because it is a federation.
“Mr. President has supported states in a very generous and exceptional way. I can state that no president has offered the states of the Federation the kind of assistance that he has.
He is aware that the federating units must cooperate in order to reach the goals he has set for the nation. As a result, everyone supports subnational governments.
“We have distributed N1.98 trillion in funding to oil-producing states over the last seven years.”
After remarks by Nyesom Wike, the governor of Rivers State, in which he claimed that the oil-producing states had refused to disclose their own shares, which had been paid by the Federal Government from 1999 to all the Niger Delta States, the 13 percent derivation fund became a contentious topic, Newsmen recalls.
Ahmed added that the government had given the federated states N5.03 trillion and an additional $3.4 billion since 2015.
She stated, “The ministry goes above and beyond its legislative mandate to provide financial support to States with regard to sub-national governments:
“Over the course of this administration, the Federal Government has released to states a total of N5.03 trillion plus an additional $3.4 billion.
“Each of these payments has a different set of terms for repayment; some are given as grants and others as loans with advantageous terms for return, such as a lengthy amortization time.
The assistance includes, among other things, reimbursements for the construction of federal roads, the Paris Club refunds, the Development of Natural Resources Fund assistance, COVID intervention, and the 13% Derivation refund to oil-producing states.
Ahmed revealed the specifics, saying that in September 2015, N445 billion was distributed as a salary bailout to states other than Akwa Ibom, Anambra, Jigawa, Lagos, and Yobe, while N340 billion was distributed as an excess crude loan to states other than Lagos and Osun. Additionally, all states received N610 billion as a budget support facility, with the exception of Lagos.
Other forms of assistance included a $2.67 trillion Paris Club refund, a N750 million SFTAS incentive, and an N600 billion withdrawal from subsidy payments made in April 2022.
The minister continued by saying that the non-oil sector had maintained strong levels of performance in terms of money made and that it was currently the backbone of the country’s economy.
According to her, the sector contributed N1.71 trillion out of the total revenue of N4.19 trillion, exceeding the budget projection by 100.7 percent.
“Today, I want to draw your attention to the extraordinarily strong performance of our economy’s non-oil sector. The Federal Government’s portion of oil money funding the budget as of September 2022 was N535.5 billion (32.6 percent performance), while non-oil tax revenue totaled N1.71 trillion (100.7 percent more than the budget’s prediction).
“The Federal Government’s share of non-oil revenue has increased. From a contribution of 35% to the federal budget’s finance, we have been able to increase that contribution to 73%.
Vincent Paul
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