Restructuring Nigeria can work if… –Idika Kalu

Former Finance Minister, Dr. Kalu Idika Kalu, has said that it was irresponsible for the Federal Government to give bailout funds to states. Kalu, who once aspired to be president of the nation on the platform of the Peoples Democratic Party (PDP) in this interview also spoke on the burning issue of restructuring Nigeria. Excerpts:
About 28 states can’t meet their statutory obligations of paying salaries to their workers, why is it so?
This has to be understood from the macro economy as distinct from partial analysis. When you inherit a financial situation such as we had, where the terms of trade dropped by over 70 percent, that is, the difference between your export price and your import price. Our export dropped by over 70 percent, that is the equivalent of about four to five percent of our GDP.
The first question you should ask yourself is, even in a federation, there are ways of mitigating the unavoidable loss in revenues. On the domestic front, you would take so many actions, including plugging of leakages, enhancing compliance in terms of taxation, adjusting rates, tariffs and duties; expanding the base and all of these should contribute to increasing revenue to mitigate the shortfall that you have inevitably suffered because of the sharp drop in the price of our major revenue like oil, and the impact this has on receipts from balance of payment standpoint, from government revenue standpoint, from transfer from abroad standpoint. It affects so many of these things because incomes are diminishing across board.

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