Federation Account allocations to the 36 states in the
country have fallen by an average of N2bn per state
every month, following the crash in global oil prices
and the consequent economic challenges, the
Governor, Central Bank of Nigeria, Mr. Godwin
Emefiele, has said.

This made the 36 states to record N864bn fall in
federal allocations in the last one year.
Emefiele stated this in his keynote address at the
2016 Annual Bankers Night organised by the
Chartered Institute of Bankers of Nigeria in Lagos on
Friday.
He said Nigeria was facing “a classical case of
economic stagflation” occasioned by external shocks.
In his speech entitled, ‘Policy options for reversing
Nigeria’s economic downturn’, the CBN governor said
the global crash in oil prices had also made foreign
exchange inflows into the CBN to drop by an average
of $2.3bn in the past 26 months.
He said, “In reality, Nigeria’s economy is currently
facing a classical case of ‘stagflation’. This situation
largely occurs when a country’s Gross Domestic
Product is falling or stagnant, while unemployment
and inflation are rising, all simultaneously.
“Given the sharp drop in oil prices, Federation
Account allocations to states have dropped by an
average of about N2bn monthly per state, which
partly explains their inability to meet some basic
recurrent expenditures, including payment of
workers’ salaries.

“Similarly, average inflows of foreign exchange into
the CBN have fallen by over $2.3bn every month over
the last 26 months.”
Emefiele, who said the country could have been
better prepared for the challenges, said lack of right
policies and proper capital controls threw the
country into economic crisis.
In response to recent calls for the CBN to reduce the
high lending rates, he said, “The CBN would be
abjectly failing on one of its cardinal objectives if it
cuts interest rates at this time. He added,
Meanwhile, SUNDAY PUNCH investigations had
revealed that the value of banking stocks quoted on
the floor of the Nigerian Stock Exchange crashed by
N2.27bn last week.

As of the last day of trading, 616.999 million shares of
banks valued at N2.667bn were traded in 6,142 deals.
However, the NSE record showed that 2.632 billion
banking shares valued at N4.935bn were traded in
10,882 deals.