The Traffic

FG Stops Bailing Out Broke States

By Achimi Muktar

Federal Government Ends 'Father Christmas' Era—States Must Pay Their Own Debts

The days of the Federal Government acting as a lifeline for financially struggling states are officially over. From now on, states must take full responsibility for their own unpaid liabilities, including salary arrears, pensions, and contractor debts.

The Accountant General of the Federation (AGoF), Dr. Oluwatoyin Madein, made this declaration during her visit to the Federal Pay Office in Kano yesterday, warning that the FG will no longer cover for states’ financial mismanagement.

Debt Crisis: States Owe CBN Over N339.9 Billion in Bailouts

Between 2015 and 2023, 31 states borrowed a staggering N339.9 billion from the Central Bank of Nigeria (CBN) to pay salaries. These funds, initially intended as temporary bailouts, have turned into long-term debts with little accountability.

Madein emphasized that state governments must find ways to boost their revenue and cut financial leakages, as the era of relying on federal bailouts is officially over.

“This will ensure that state governments receive their revenues as and when due, and the Federal Government will not be burdened by unpaid liabilities,” she stated.

Strict Financial Reforms Coming – No More Loopholes

Beyond ending financial bailouts, Madein outlined the FG’s commitment to strict financial discipline across Ministries, Departments, and Agencies (MDAs). She directed Federal Pay Officers (FPOs) to enforce compliance with public financial management reforms, ensuring no room for financial recklessness.

“The use of manual processes in financial activities will soon be over. Modern technology is key in today’s accounting profession,” she said.

The AGoF also announced the implementation of an enterprise concept management system, which will fully digitize financial operations, including those of Federal Pay Offices.

Performance Monitoring: Government Workers Must Adapt or Be Left Behind

Madein further revealed that the government is replacing the outdated Annual Performance Evaluation Report (APER) with a new performance management system.

“This system will involve all staff members and serve as a tool for measuring management performance,” she explained, urging officials to embrace digital skills or risk being left behind in the evolving financial landscape.

"Brace Up for Financial Independence"

With the FG drawing a firm line on state bailouts, governors must now take full ownership of their financial decisions.

The question remains: Will states rise to the challenge by fixing their revenue systems, or will financial chaos follow now that the safety net is gone?