Expressing his worries, Plateau State Governor, Caleb Muftwang, has drawn attention to the effects of inflation and the weakening naira on the actual value of the monthly federal allocation to state governments.
Despite the increase in the amount of the federal allocation, the governor noted a significant decrease in its purchasing power.
During an interview on Channels Television’s Sunrise Daily on Tuesday, Muftwang emphasized, “The amount has indeed increased, however, its purchasing power and real value have seen a notable decline.”
The governor also highlighted the escalating prices of essential materials such as diesel, cement, and iron rods, which are utilized in infrastructure projects.
“Let’s not just focus on the figure; we need to consider the actual purchasing power of the funds that the state has received from the federation account,” he stressed.
To illustrate the economic predicament further, Muftwang compared the exchange rate dynamics over time.
“It’s not a complex concept. When the previous administration took office in 2015, the dollar was valued at about N180. Today, despite claims of increased funds, the naira’s value against the dollar speaks volumes. We remain a consumer nation; most of the goods used in governance are imported and are thus pegged to the dollar,” he added.
In a Sunday broadcast, President Bola Tinubu highlighted the impact of his administration’s policies, like the elimination of petrol subsidies and the floating of the naira, resulting in state and local governments receiving record-high allocations from the federation account.