Nigeria's 36 states cannot depend on the country's oil profits to finance their budgetary spending with federal revenue down sharply due to falling oil prices, a senior finance ministry official was quoted as saying late on Thursday.

The monthly distribution of oil savings to Nigeria's excess crude account tumbled to 286 billion naira ($1.6 billion) in February from 435 billion the previous month, junior finance minister Remi Babalola told a economic summit in Nigeria's northern Benue state.

That compares to last May, when oil prices traded above $130 a barrel, pushing monthly oil revenue for Africa's biggest oil producer to 747 billion naira.

"Any continued dependence on the federation account allocation as a means of funding a state's expenditures is unrealistic if electoral promises must be met," Oluyinka Akintunde, spokesman for the finance ministry, quoted Babalola as saying.

The savings belong to all three tiers of government -- federal, state and local.

Last month, all parties agreed not to dip into the country's excess crude account in the short-term. ($1=175 naira)


Reuters