FG allocates N66.5bn to 35 eligible states
Failure of Rivers State to publish on its website credible and fiscally responsible COVID-19 responsive amended 2020 budgets, duly approved by the state House of Assembly and assented to by the state governor, has robbed the state its share of disbursement tied to $750 million International Development Association (IDA). With exception of Rivers State, all 35 eligible states got their share of disbursement.
Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, yesterday, confirmed the N66.5 billion disbursed ($175 million) to eligible states. The Federal Government disbursed $175 million to eligible states on the basis of the amended COVID-19 responsive 2020 udget results achievement. The ministry’s Director of Information, Hassan Doddo, quoted the minister as saying the disbursement followed compliance with the amended COVID-19 responsive 2020 budget by 35 eligible states in the country. The programme is wholly-financed with $750 million loan from the IDA, a member of the World Bank Group.
Each state received the total sum of N1.9 billion equivalent of $5 million. The disbursement is a performance-based grant component of the World Bank-Assisted States Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme-for-Results. “Rivers State is the only one that missed out on the grant due to its inability to meet the eligibility criteria which required the states to have passed and published online on a state’s website by July 31, 2020 credible, fiscally responsible COVID-19 Responsive Amended 2020 Budgets duly approved by the State House of Assembly and assented to by the state governor,” the ministry said. According to Ahmed, the amended 2020 state’s budget must also include standardised budget documentation to enhance clarity, transparency and accessibility.
“It must also significantly lower the gross statutory revenue projections – consistent with the revised medium-term expenditure framework (MTEF) and Federal Government’s budget; reduced non-essential overhead and capital expenditures. “The budget must be tagged and found to have allocated at least 10 per cent of the total expenditure of the amended budget for COVID- 19 relief, restructuring and recovery programmes; and identified credible sources to fully finance the budget deficit to avoid accumulation of arrears,” the minister said.
Ahmed stressed that the COVID-19 pandemic and the associated economic and fiscal shocks have put significant pressure on states’ fiscal resources and undermined the reality and credibility of the states’ original 2020 annual budgets. She was of the opinion that a transparent, accountable and sustainable statelevel fiscal/budget framework is a pre-requisite for a robust COVID-19 response, enabling necessary health, social protection and livelihood interventions during the COVID-19 relief, restructuring and recovery phases. The minister expressed optimism that the achievement of results by the 35 out of 36 states would further strengthen the national fiscal response to COVID-19 and align efforts at both the federal and state-levels.
She noted that the World Bank-assisted SFTAS Programme is principally meant to strengthen fiscal management at the state level, so as to ensure effective mobilisation and utilisation of financial resources to the benefit of the citizens in a transparent, accountable and sustainable manner, thereby reducing fiscal risks and encouraging a common set of fiscal behaviours. Ahmed observed that the SFTAS programme could not have come at a better time, given the dwindling government revenue occasioned by oil price volatility coupled with the current impact of COVID-19 which has further intensified the need for improved practices in fiscal transparency, accountability and sustainability as enunciated in the SFTAS ideals.
It would be recalled that the Federal Government had, earlier in April 2020, disbursed the total sum of N43,416,000,000 ($120.6 million) to the qualified 24 states, based on their performance.