A report by the Nigerian Economic Council says it will be difficult for most states to pay workers’ salaries this year because of the failure to meet Nigeria’s revenue expectations and the effects of the outbreak.
The report of the Nigerian Economic Summit Group says that Nigeria’s dependence on oil is facing two major challenges in the fall of oil prices and the ongoing global economic crisis that is still being impacted by the cholera epidemic.
The study found that the state of Nigeria relies on a share of the federal government’s dependence on wealth, meaning that falling oil prices would make states unable to pay their workers’ salaries.
However, economists see a correction in the report.
Dr Muhammad Shamsuddeen, an economist in Nigeria, told the BBC that there are things to look at and not just oil.
He said that for the first time in the 2020 budget for Nigeria, it is estimated that oil can bring in N2.2 billion.
The economist says that when it comes to importing fuel, it is less than 30 per cent of what the government thinks it will achieve at eight cents.
He said that losing less than 30% does not necessarily mean that salaries cannot be paid.
Dr Muhammad Shamsudden said states should look at ways to improve revenues and reduce reliance on federal funds.
He said another factor is that chronic illness has no effect especially in the current pandemic of global warming.