State governments have agreed to reform their finances as well as that of their local governments under a Fiscal Sustainability Programme to ensure their long term viability.
The Special Adviser Media to the Minister of Finance, Mr. Festus Akanbi disclosed this on Wednesday.
He explained that the 22-point fiscal reform action plan to be implemented by states under the programme mirrors the ongoing public financial management reforms being undertaken by the federal government, including: biometric capture of all civil servants, the establishment of an Efficiency Unit, implementation of Continuous Audit, improvement in Independently Generated Revenue (IGR) and measures to achieve sustainable debt management.
The reforms were unanimously agreed by state governors during the National Economic Council meeting that was held on Thursday 19th May.
“The federal government is developing a financial support structure which will be directly tied to the attainment of agreed fiscal reform milestones. The ultimate objective of the programme is to ensure that states are set on a path towards fiscal sustainability,” Akanbi added.
The Minister of Finance, Kemi Adeosun recently said the N165 billion civil service monthly wage bill was over-bloated and can no longer be sustained by the federal government.
Adeosun, who provided details on the economic reform agenda of the federal government, said the N165 billion being paid to federal civil servants monthly represented 40 per cent of the total spending of government. She said the figure was too high and the government was pursuing aggressive measures to detect and prosecute ghost workers and other saboteurs in the system.
“We spend N165 billion every month on salaries and when I came in there was no checking.
“Now, we have created a unit assigned with the sole responsibility of checking the salaries and catching those behind the over-bloated salaries,” she had said.
Adeosun said the Integrated Payroll and Personnel Information System (IPPIS) introduced by the previous administration was defective and sabotaged by the elements benefitting from the salary fraud.
She said many federal government establishments including the police were yet to be captured in the system. According to her, it was shocking that the Nigerian Railway Corporation (NRC), which is not fully functional, still had 10,000 workers in its payroll serviced by government.
The minister assured her audience that government would correct the anomalies in the payroll system and weed out all ghost workers in the civil service.
Adeosun said that the fiscal focus of the administration was to ensure economic growth that would be measured on job creation and productive sectors growth.
“The economy is not measured by how many private jets we have but how many jobs we create. People must be productive for the economy to grow. We have been a consumer economy, but we want to be productive and stop buying everything from abroad. We have been borrowing to pay salaries for years and that has to stop because it is not sustainable.
“Last year, we spent N64 billion on travelling and only N19 billion on roads. Travelling does not grow the economy and this must also stop,’’ she said.
The minister said the compound Gross Domestic Product (GDP) of the country had been negative in the last 10 years and the administration was working to correct this.