Governor Babatunde Fashola of Lagos State, has accused the Nigerian Minister of Finance and Co-ordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, of frustrating state governments in the country by denying them access to funds for development.
Fashola said Okonjo-Iweala’s actions are political and meant to starve states of funds for development primarily to create financial challenges in states ahead of the elections.
The governor, who was at the State House of Assembly Tuesday evening, to inform the lawmakers about the current state of the Nigerian economy, lamented that the economy had been run aground by the President Goodluck Jonathan administration and that as a result, the state has to maintain some level of austerity.
“Today the Honourable Minister for Finance, if any honour still attaches to her actions, has stopped Nigerian banks from funding state governments because of elections, as if the needs of the people for roads, healthcare, drugs, education and security has stopped.
“She has insisted that inspite of individual appraisals of each bank by their credit committees, all State requests for funding by banks must be approved by her Ministry.
“To the best of my knowledge, she has not granted any of the requests submitted to her for approval in her new coordinating role as the retail banker for the Nigerian economy.
“A recent study that I commissioned just two months ago shows that construction workers are losing their jobs in the thousands across the country.
“Reports from four major construction companies show that a total of 5,170 local workers and 450 expatriate workers have been laid off between December 2014 and February 2015 and there will be more to follow, from only four companies.
“Your guess is then as good as mine about what is happening in several other hundreds of middle and small construction companies.
“The disposable income value of rich and poor Nigerians have been diminished considerably, and the prognosis is not encouraging having regard to the high unemployment rates, high interest rate, and the necessity for self-generation of electricity which further erodes this income.
“My quick check revealed that at least 2,400 bank workers have been laid off in March 2015 alone.
“Investigations at the port showed that many importers cannot collect their goods because the prices between when they ordered and when they arrived has risen sharply.
“This is largely as a result of the devaluation of the naira that followed the postponement of the election.
“These goods include raw materials for factories and small businesses. Without these raw materials, they cannot produce. If they cannot produce they will most likely lay off workers,” Fashola said.
He further lamented that the Nigerian stock market had lost an estimated N4 trillion as a result of the postponement of the 2015 general elections adding that “according to Mr. President when he visited the Stock Exchange last week, in his opinion this is not that bad, because when he took office, the market had crashed to N6 trillion as a result of the global financial crises.”
He urged the people of Lagos to form your own opinion about the President statement reminding them that fallen stock prices mean huge personal financial loses to the owners of those shares, and they are in their millions.
“Indeed, the picture that is emerging on our economic canvass where we substantially import goods and services is not a pretty one.
“There is a news headline that IMF is recommending a further devaluation of the naira. This is frightening for me as it should be for any citizen and more so for any leader,” he said.
He also slammed his colleagues in the Peoples Democratic Party, PDP, for wasting their states funds to hold a meeting in Lagos and protest against the use of Electronic Card Readers by the Independent National Electoral Commission, INEC, “as if Lagos is the headquarters of INEC.
“They desecrate Nigeria’s commercial capital by their poorly conceived misadventure and the Agenda for their thoughtless gathering,” he said while seeking for an amendment to the 2015 Appropriation Law of the state with the argument that it would create for effective management of revenues and would make the state only spend what it gets since the dwindling revenue to Nigeria has also affected Lagos State.
“While our external reserves had depleted from US$37.0 billion in November 2014 to about US$30.06 billion currently, the official exchange rate of the naira to the US dollar dipped from N155/US$ in mid-November 2014 to the current exchange rate of N198.50/US$ (a 28 percent devaluation over the last four months). The exchange rate at the parallel market foreign exchange window currently hovers around N228/US$ (a decline of about 36 percent) and yet still on a downward spiral.
“The summation of all these is that the purchasing power of the citizens has been considerably eroded, while simultaneously the investment activities of both the private and public sectors in production cum employment generation capacity and critical infrastructure is now being curtailed.
“To put this in perspective, the revenues accruing into the Federation Account (inclusive of VAT Receipts) declined from a monthly average of N622 billion in year 2014 to the current monthly average of N541 billion (a decrease of 13 percent). Lagos State’s share from the Federation Account has also correspondingly fell from monthly average of N11.05 billion in 2014 to the current monthly average of N10.34 billion. In fact, in February 2015 in comparison with January the State recorded a decline of 14 percent,” he lamented adding that this had also affected Lagos.