The financial fortune of Nigeria’s 36 states may have vastly improved following the end of the subsidy regime and signs that the Tinubu administration might already be willing to push more funds in their direction.
Although states are yet to openly acknowledge the flow of more money into their coffers, there are serious indications that revenue which accrued to them from the centre in the month of June may have doubled.
This development, experts say, is expected to have a positive impact on the provision of infrastructure, job creation activities and the funding of health and education programmes by State Governments.
According to statistics, the Federation Account Allocation Committee (FAAC) shared N786.161 billion from the revenue generated in May 2023 between the federal government, states, and Local Government Councils.
The N786.161 billion total distributable revenue comprised distributable statutory revenue of N519.545 billion, distributable Value Added Tax (VAT) revenue of N251.607 billion, Electronic Money Transfer Levy (EMTL) of N14.370 billion, and Exchange Difference revenue of N0.639 billion.
The gross statutory revenue of N701.787 billion which was received for May 2023 was higher than the sum of N497.463 billion received the previous month by N204.324 billion.
In May 2023, the total deductions for the cost of collection stood at N38.238 billion, as the total deductions for transfers and refunds stood at N163.193 billion, while the balance in the Excess Crude Account (ECA) was $473,754.57.
Whereas the federal government received N301.889 billion, the state governments went home with N265.875 billion while the Local Government Councils took away N195.541 billion.
Similarly, N22.855 billion was shared to the relevant states as 13 per cent derivation revenue.
The Independent Petroleum Marketers Association of Nigeria, IPMAN which has apparently bought into Tinubu’s economic plan admitted in a recent statement that the Federal Government is indeed having increased access to more dollars and naira.
Reports making the rounds suggest the nation has raked in as much as $400 billion due to the termination of the subsidy regime.
Gbenga Daniel, a former governor of Ogun state, who is representing Ogun East District in the Senate revealed on TVC that the monthly allocations to states in June 2023, almost doubled.
Daniel, who did an assessment of the Tinubu administration which has spent 30 days in office, agreed that the subsidy removal has both benefits and side effects.
“I was informed that the allocation that went to the states this month is nearly double of what it was a month ago,” Senator Daniel said Thursday on TVC.
“Although, the bold decision that was taken to withdraw (remove) subsidy has major implications”, the former governor remarked, “there are downsides and I’m happy that efforts are being made to provide all forms of palliatives that can stem the side of some of the expected downsides.”
The Senator noted, “I have no doubt that in a few weeks, months, we would have a new environment and things would start to happen.”
Recall that after his inauguration on May 29, Tinubu stated that funds meant for the payment of subsidies would be diverted to the provision of public infrastructure, the sustenance of education and health care and the creation of job opportunities.
In the meantime, states are promising on their own, without waiting for the Federal Government, to cushion the effect of subsidy removal on their people.
While Edo has slashed the number of working days and proposed a minimum wage of N40,000, Rivers is pledging among other things to intervene effectively in the transport sector.
Transport fares have not only gone up in the State, the cost of edibles and other supplies have spiralled upwards.
The Siminalayi Fubara administration which is talking about the provision of more infrastructure is looking deeply at the generation of wealth and job opportunities through investments in industry and Gas.
Fubara is already planning to embark on the Port Harcourt ring road project which is estimated to gulp approximately N200 billion.