- The scale of the looming financial crisis caused by the coronavirus pandemic has been revealed
- Nigerian state governments might struggle to pay salaries from June 2020
- The federal, states and the local government councils have lost massive projected revenue which will affect wages
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A projection by the federal government has indicated that gloom awaits state governments in Nigeria as the country's federation account takes a free fall.
Federal, states and local government councils have lost massive projected revenue which will affect their plans for this year.
Accordingly, many states may be unable to meet their critical obligations, including payment of workers’ salaries, following the huge reduction in their revenue inflow from the federation account.
The states expected to share N3.3 trillion this year will not have more than N2.1 trillion.
The councils, which were projected to share N2.5 trillion will not get more than N1.5 trillion.
The federal government’s share, which should have been N4.8 trillion will now be N2.4 trillion which is 50 per cent of the expected accruals.
This was revealed by the minister of finance, Zainab Ahmed during a citizens dialogue in Abuja, organised by her ministry in conjunction with the United Kingdom’s Department for International Development (DFID).
The seminar discussed Nigeria’s response to the fall in oil prices and the COVID-19 pandemic.
According to her, the projected overall inflow into the federation account in 2020 is N8.6 trillion but what is expected now is N3.3 trillion.
To cushion the effects, the minister of state for budget and national planning, Prince Clem Agba, at the event, revealed that the Nigerian government is planning to inject about N2 trillion stimulus into the economy in response to the COVID-19 pandemic and the fall in oil prices.
His words: “When everything is put together, both government funding and the funds we are expected to get from the Central Bank of Nigeria, Banks of Industry and other multilateral agencies and grants that we are receiving, we expect to get a stimulus of about N2 trillion going into the economy.”
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