The crash in the global oil prices and the economic challenges faced by the country has affected the Federal allocation to the states in the country.
Speaking on the economic challenges in the country, the Central Bank of Nigeria’s Governor, Godwin Emefiele revealed that the allocation to states have fallen by an average of N2bn per state every month.
Emefiele further noted that the subsequent fall has resulted in a N864bn fall in federal allocations in the last one year.
Emefiele while delivering a speech titled ‘Policy options for reversing Nigeria’s economic downturn’ at the 2016 Annual Bankers Night organised by the Chartered Institute of Bankers of Nigeria in Lagos on Friday said: “In reality, Nigeria’s economy is currently facing a classical case of ‘stagflation’. This situation largely occurs when a country’s Gross Domestic Product is falling or stagnant, while unemployment and inflation are rising, all simultaneously.
“Given the sharp drop in oil prices, Federation Account allocations to states have dropped by an average of about N2bn monthly per state, which partly explains their inability to meet some basic recurrent expenditures, including payment of workers’ salaries.
“Similarly, average inflows of foreign exchange into the CBN have fallen by over $2.3bn every month over the last 26 months.”
Emefiele during the speech also accused the country of not having the right policies to have countered the challenges facing it.