Despite being among the highest earners from Federation Account some year ago, Akwa Ibom State government has decided to go for financial bailout off set commitment to workers and contractors.
Its monthly allocation dropped from an average of N30 billion three years ago to N5.8 billion in May this year.
Akan Okon, the commissioner for finance, said the state government would apply for financial assistance to the tune of N15.5 billion, having met the sustainability analysis as required.
Okon said the state government’s monthly revenue had continued to decline, adding it had worsened in the recent time with an allocation of N5.3 billion in May, year while it spent N4.8 on wage bill leaving a balance of N500 million.
According to him, what is left is hardly enough for government activities for the payment of contractors.
‘’This figure is barely enough to pay salary, the state government’s commitment to the gas project and what will be left will not be enough, that is why we are going for the financial assistance,’’ he said.
He said the conditions for all states are uniform adding that no state can take more than N15.5 billion, depending on its sustainability analysis.
The commissioner, who announced that the Internally Generated Revenue collected between May last year and June this year was N15 billion, which according to him shared among the local governments, but noted that money accruing to local government from the Federation Account had been barely enough for local government employees, payment of primary school teachers and their pensioners.
Okon, who announced that the N64.5 billion commercial bank debts Akwa Ibom owed that was converted to Federal Government bonds for a 10-year tenure, had helped to cushion the effect of huge debt serving as the state government now paid N500 million monthly instead of N5.5 billion.
Maintaining that despite the dwindling revenue, the state government is not indebted to civil servants in the state, the commissioner said initiatives were being implemented that would sanitise revenue collection machinery adding that it is an ongoing exercise.
On the troubled Akwa Savings and Loans Company, a microfinance bank owned by the state government, he said a board of inquiry had been instituted to examine its performance with a view to position it for better services.
He assured that the 2016 budget would be implemented despite the financial difficulties the state was facing, adding that the current bleak economic outlook would not be forever.
The commissioner also said the huge revenue that the state government received in the past during the period of the ‘boom’ was well utilised in the provision of infrastructure across the state, saying that as a developing economy, it would have been difficult to stop spending on development projects.
