…Urges Govs to diversify their economy to boost IGR
State governments have been charged to be more proactive and seek other ways of generating revenue, rather than heavily relying on proceeds from the federal allocation to run their states. This charge was given by Lagos State Governor, Babajide Sanwo-Olu.
At the opening ceremony of the Federation Account Allocation Committee (FAAC), Retreat held at Eko Hotels & Suites, Victoria Island, Lagos, on Monday, with the theme: ‘Efficient Federation Revenue Allocation As A Nexus for National Economic Diversification’ the governor, who was represented by his Deputy, Dr. Obafemi Kadiri Hamzat said each state needs to diversify its source of revenue and look for ways to boost its Internally Generated Revenue, IGR, instead of waiting on the federal government’s monthly allocation.
He also urged the Federal Government to look beyond oil revenue and improve diversification into the agricultural sector.
“Nigerian government needs to diversify its source of revenue. We must do anything we can to boost revenue along the line of manufacturing. It is important every state first looks for ways to diversify. We must reduce our dependence on federal allocation,” he urged.
Participants and stakeholders at the event were unanimous in their opinions that states should look inwards to increase their IGR and diversify.
Describing the FAAC as one of the most important national institutions, due to the critical nature of its responsibilities, Sanwo-Olu said there is a need for a new, fair and just the revenue-sharing formula, for federating units to achieve a meaningful diversification and sustainable growth in IGR.
Also to make revenue sharing formula fairer, equitable, and more development-oriented, he suggested the need to attach increased value to population density as a critical factor, in addition to the nominal population figure.
In her keynote address, the Minister of Finance, Budget and National Planning, Hajiya Zainab Shamsuna Ahmed, who was represented by the Permanent Secretary in the Ministry, Mahmud Dutse, said the federal government, had embarked on “policies and measures to improve the fiscal health of the federal government and states.”
“For the states, these measures included various financing options made available in the form of bailout funds, budget support facility, relaxation of conditions for borrowing and ease of doing business. Over the years, the government has been committed to the efficiency of our common resources through fair, just and equitable distribution of the federation revenue to the three tiers of government as monthly statutory allocations.”