Plateau State Governor Caleb Muftwang has stated that the monthly federal allocation to state governments has increased., However, in real terms, the value of the money has “decreased significantly” due to inflationary pressure on the economy and the wobbling naira.
The governor was challenging a claim made by President Bola Tinubu in a recent speech that money saved from the removal of fuel subsidy was used to mark up monthly allocations from the federation account to states in order to address the hardship Nigerians are currently facing.
Muftwang said that while the amount of money received from the federation account has increased, the purchasing power of the amount received has decreased.
For example, the governor noted that the prices of diesel, cement, iron rods, and other materials used for critical infrastructure construction have all gone through the roof.
“So, we shouldn’t just look at the amount; let’s look at the purchasing power of the amount that the state has so far received from the federation account,” the governor said.
“It doesn’t need any rocket science. When the last administration came in in 2015, the dollar was exchanged for N180 in the naira. Today, you are telling me that money has increased, but we all know the value of the naira compared to the dollar.
“And we are still a consumer nation; many of the things we use in governance are imported, so they are dollar-denominated.”
Currently, the federal government keeps 52.68% of the country’s monthly revenue, while states receive 26.72% and LGs receive 20.60%.
Protesters have repeatedly asked the President to reverse the removal of fuel subsidy, blaming the hardship on it for increasing inflation rates, which currently stand at over 34%, and food inflation at over 40%.
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