The Centre for the Promotion of Private Enterprise (CPPE) has issued a warning that the economic situation in Nigeria is dire, with the majority of states facing the risk of insolvency due to severe financial challenges.
Muda Yusuf, the director of CPPE, expressed concern over a recent report revealing that 31 states in Nigeria collectively owe the Central Bank a staggering N330 billion in Salary Bailout Funds. This alarming revelation underscores the urgent need for states to take decisive action to improve their financial sustainability and attract much-needed investments.
In order to avert a looming financial crisis, CPPE emphasized the importance of states diversifying their revenue sources and reducing their reliance on federal funding. The think tank stressed that states must prioritize attracting investments and fostering economic growth to bolster their financial stability.
Furthermore, CPPE highlighted the critical need for a reevaluation of the current fiscal structure to grant states greater autonomy over their resources, particularly in sectors such as mining. The lack of control over key resources hampers states’ ability to attract investors and maximize their revenue potential.
The issue of fiscal federalism was also underscored as a key factor in addressing the financial challenges facing states. CPPE emphasized the importance of restructuring to empower states to harness their resources effectively and drive sustainable economic development.
In conclusion, CPPE urged state governments to adopt proactive measures to enhance their revenue generation capabilities and reduce their financial vulnerabilities. By fostering a conducive environment for investments and advocating for fiscal reforms, states can pave the way for long-term financial stability and economic prosperity.
