The National Economic Council chaired by Vice President Yemi Osinbajo on Thursday asked state governors to put machinery in place to cut cost of governance.
According to the Lagos State Governor, Akinwunmi Ambode, who briefed State House correspondents at the end of the meeting held inside the Presidential Villa, Abuja, NEC said although they did not design any uniform template on how to reduce cost, the era of huge percentage of states’ budget being recurrent expenditure was not acceptable.
“We resolved that all states should find ways to reduce their cost of governance.
“We do not have a uniform template on how to reduce the cost of governance but it is very clear that states in the specific situations will find different ways and means of ensuring the cost of running governance is not as huge as it has always been.
“So, it is left for the states in their respective situation to find the different ways of cutting cost but what is important is that we cannot continue with the kind of huge burden or huge cost we apply to run our government.
“A situation where you are having a huge percentage of your budget as recurrent expenditure is obviously not acceptable. And you must look for ways in reducing the cost of administration in the various states,” he stated.
Ambode said the committee set up by the council during its last meeting to probe the expenses of the Nigerian National Petroleum Corporation and the Excess Crude Account under the past administration would submit its report during their next meeting.
According to a council document released at the end of the meeting, the council received a presentation from the governor of the Central Bank of Nigeria, Godwin Emefiele, on the update of restructuring of bank loans for the states and payment of salary arrears.
The governor was said to have informed the council that following meetings with banks, it was agreed that existing loans should be restructured for the minimum of 20 years while salary arrears should also be restructured for the minimum of 15 years and not exceed more than 20 years.
He added that states could opt for either the bond option, which would attract market rate, or the debt restructuring option, which would attract single digit rate.
“Council resolved that a four-man team made up of the governors of Bauchi, Rivers, Ondo and Osun States are to follow up with the CBN to ensure that the issues of Excess Crude Collateral for the states are sorted out by next week Tuesday,” the statement added.
The document also indicated that a presentation made by the Permanent Secretary, Ministry of Finance, showed that the Excess Crude Account currently stands at $2.078 billion.
The council directed the Committee on ECA to work with the Accountant-General’s office to resolve the gaps observed in the presentation.
