The federal government said states and local councils should learn to develop their terrain with the available resources accruing to them instead of running to it (FG) for financial bail outs at all times.
It also warned that further financial support to them will be based on how well they implement the 22 Action points of the Fiscal Sustainability Plan (FSP).
This was revealed on Monday by the Vice President, Prof. Yemi Osinbajo in Abuja at a workshop organized by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) on alternative sources of revenue generation for sustainable development in states and local government councils in Nigeria.
Represented by the finance minister Kemi Adeosun, Osinbajo noted that “independent monitoring and evaluation of states against agreed milestones under the FSP, has been conducted and further consideration for support to states, will be solely dependent on reports from this exercise.”
The Vice President stated that “fiscal discipline, improved revenue generation, rational allocation and efficient use of resources, must be strategies adhered to by every tier of government if we must return to a path of sustainable growth.”
The 22-Point FSP for states and local governments he said “was introduced and acceded to by states governments in 2016 with the view to enhancing fiscal prudence and transparency in public expenditure, monitoring the ongoing public financial management reforms being undertaken by the federal government.”
Osinbajo added that the strategic objective 2 of the FSP was focused on improving public revenues, requiring each state to set realistic and achievable targets for improving Internally Generated Revenue (IGR) from all revenue generating activities of the state in addition to tax collection.”
The idea, he said, “was for each state government to look inwards and come up with a plan that was best suited for their states based on available resources.”
Other action points for the state governments include privatisation of state-owned enterprises, establishment of efficiency units to reduce overhead expenditures, biometric capture of all civil servants, implementation of continuous audit to reduce revenue leakages and measures to achieve sustainable debt management.
Acting Chairman of the RMAFC, Alhaji Shettima Umar Abba-Gana, said the commission was designing new sources of revenue and ways of generating and collecting these revenues for the benefit of the states and local governments.
He lamented that the challenges of a troubled economy, caused by drastic fall in the international price of crude oil, the fall in the level of oil production, security challenges and general drop in national productivity negatively affected the inflow of funds into the Federation Account.
Abba-Gana expressed optimism that in due course, the over-dependence on statutory transfers of funds from the Federation Account for governance by the states and local governments would begin to reduce.