Isaac Ombe, Yenagoa
The Bayelsa State Government has rejected a financial responsibility report on the sustainability of the 36 states of the federation by BudgiT.
In a statement titled: ‘BudgiT Report: Our Position’, issued by the state’s Commissioner of Finance, Mr. Maxwell Ebibai, the state government noted that the report failed to rely on key financial instruments that were legitimate, equitable and sustainable.
The Commissioner also described the report as ‘merely a rehash of last year’s ranking’.
Ebibai recalled that the reaction of the state government then as now was that “not only is this report faulty but relies on tangential parameters inconsistent with economic fundamentals.
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“As before, the current report erroneously depended on opaque data and criteria bordering largely on the ability of a state to meet its operating expenses (recurrent expenditure) with only its Internally Generated Revenue”.
According to the Bayelsa Finance Commissioner, the very notion of creating dichotomy between “Federal Allocations” and “Internally Generated Revenue” is a “misnomer that is adding insult to painful injury as, over the years, we have protested the absence of true fiscal federalism and inequity of the revenue-sharing formula that robs states like Bayelsa in favour of the collective.”
The statement further noted that, “It is incomprehensible not to appreciate that oil and gas are produced at a significant opportunity cost to states and that the derivation revenue compensates for such brutal environmental degradation.
“As a government, we protested the 2021 ranking as being defective for excluding key revenue sources such as mineral oil derivation funds in the analysis, a position the BudgiT team acquiesced to.”
‘We are again bewildered that they returned to this cynical profiling.
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“It should be worrisome to BudgiT that the huge revenue that should accrue to Bayelsa State from taxes of oil multinationals operating in the state were being paid to states where the companies have their offices domiciled,” Ebibai said.
Despite the diversion of the state’s supposed revenues to other states, Ebibai, however, noted that the Bayelsa State Government has remained steadfast in its responsibilities and obligations to the people of the state.
“Notwithstanding the disequilibrium, we are happy to state unequivocally that the financial standing and sustainability of Bayelsa State are sound and not in any jeopardy as the government can comfortably meet its obligations, including regular payment of salaries and pensions.
“It is also disturbing that a state with a low debt profile that is effectively managing its financial liabilities would be ranked low against states with a higher debt profile. More so, we are clearing the debts.”
On biometric capturing of the state’s civil servants, the Bayelsa State Finance Commissioner noted that “we have successfully concluded the process to achieve payroll transparency.
“Following from this, salaries are paid promptly usually by the 25th day of the month.”
He also informed that the government has continued to invest in human capital development and empowerment programmes, without neglecting critical financially demanding infrastructure projects such as the Yenagoa-Oporoma Road and Bridges, the Sagbama-Ekeremor Road with seven bridges and the Nembe-Brass Road with 10 bridges as well as other critical big-tickets projects across the state that will stir its economic life.
The statement further reminded Budgit to note that states with limited federal presence were inherently disadvantaged with the ranking methodology where facilities like ports give a clear edge to some states.
“For a fair analysis and a more comparable measure of fiscal sustainability, BudgiT should expand its indices to cover derivation revenue as IGR in future profiling.
“We are, therefore, in strong disagreement with the ranking as released by BudgiT, and wish to state categorically that Bayelsa State Government rejects the report as it failed to rely on key financial instruments that are legitimate, equitable and sustainable”, the statement added .