The Federal Government has disbursed N43,416 billion ($120.6 million) as performance-based grants to 24 states.
The states were considered eligible for the results they achieved in 2018 under the performance-based grant component of the World Bank-Assisted States Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme-for-Results.
The grant is financed with a loan of US$750 million from the International Development Association (IDA), a member of the World Bank Group.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, in a statement, explained that “the disbursement followed the participation of the 24 eligible states in the recent Annual Performance Assessment (APA).”
The assessment was done by the Office of the Auditor- General for the Federation (OAuGF) as the Independent Verification Agent (IVA), in collaboration with a third party firm, JK Consulting Limited and the SFTAS Programme Coordination Unit (PCU).
Mrs. Ahmed explained that the SFTAS Programme was established by the Federal Government with a loan of $750 million to support states through the provision of performance-based grants of $700 million.
In addition, a technical assistance worth $50 million was also factored into the grant “to enhance their capacity to achieve the Disbursement Linked Indicators (DLIs) i.e. the Programme results”.
According to a statement signed by the Ministry’s Director of Press and Public Relations, Mr. Hassan Dodo, yesterday in Abuja, “the DLIs are derived from the country’s 22-Point Fiscal Sustainability Plan and the 14 Open Government Partnership (OGP) commitments aimed at strengthening fiscal transparency, accountability and sustainability across states.
The Minister said for states to qualify for the grant they must meet the Eligibility Criteria (EC) through online publication of the approved annual budget and audited financial statement for the previous year and the DLIs that eligible States receive grants for achieving.
Some of the DLIs include: improved financial reporting and budget reliability; increased openness and citizens’ engagement in the budget process; improved cash management and reduced revenue leakages through implementation of State Treasury Single Account (TSA).
Other conditions to be met to qualify for the grant are: strengthened Internally Generated Revenue (IGR) collection; biometric registration and Bank Verification Number (BVN) used to reduce payroll fraud; improved procurement practices for increased transparency and value for money.
Also required are strengthened public debt management and fiscal responsibility framework; improved clearance/reduction of stock of domestic expenditure arrears; and improved debt sustainability.
The finance minister reiterated that “the World Bank-assisted SFTAS Programme is principally to strengthen fiscal management at the State level so as to ensure effective mobilization and utilization of financial resources to the benefit of their citizens in a transparent, accountable and sustainable manner, thereby reducing fiscal risks and encouraging a common set of fiscal behaviours.”
Mrs. Ahmed was happy that the SFTAS programme couldn’t have come at a better time than now “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.”
She recalled that in 2018, the first year of the Programme, only 24 States met the Eligibility Criteria. She also disclosed that those States declared ineligible for 2018 failed to publish their annual budgets and audited financial statements online within the time frame as stipulated by the SFTAS Programme Operation Manual (POM).
The statement revealed that the 24 beneficiary States who met the eligibility criteria are Abia, Adamawa, Bauchi, Benue, Delta, Edo, Ekiti, Enugu, Gombe, Jigawa, Kaduna, Kano, Katsina, Kebbi, Kogi, Kwara, Niger, Ondo, Ogun,Oyo, Osun, Sokoto, Taraba and Yobe States.
The 12 States that missed out on the 2018 grants because they did not meet the Eligibility Criteria are Akwa Ibom, Anambra, Bayelsa, Borno, Cross River, Ebonyi, Imo, Lagos, Nasarawa, Plateau, Rivers and Zamfara States.
However, the SFTAS Programme accommodates different starting points, so the 12 States can still participate in the 2019, 2020 and 2021 respective performance years by meeting the EC and DLIs in the said years.
The total sum of (N43,416,000,000.00) USD120.6 Million has so far been disbursed to the qualified 24 States based on their performance.
Kaduna State achieved the highest number of results (nine) and got the highest share with N3,960,000,000.00. Katsina and Benue got the lowest amount of N540,000,000.00 each