Amid a pledge of by the government to improve fiscal reforms at the subnational level, the World Bank on Thursday expressed the hope the recent reforms in the economy would be sustained.
The Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, said at the opening of a four-day retreat in Asaba, Delta State that the government was working seriously to sustain the collaboration with the States and International Development Partners through programmes such as the World Bank-assisted States Fiscal Transparency, Accountability and Sustainability (SFTAS).
The Minister said the SFTAS programme has brought a great deal of reforms that helped to strengthen State Governments’ approach to governance and public finance management.
The retreat was organised by the Federation Account Allocation Committee (FAAC) on the theme “Creating a Resilient Economy through Diversification of the Nation’s Revenue.’’
FAAC is a statutory Committee, which has the Minister of Finance and Coordinating Minister of the Economy as Chairman, with the Accountant-General of the Federation (AGF), Commissioners of Finance of the 36 States of the Federation, representatives of the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC) and Revenue Generating Agencies (RGAs), amongst others, as members.
Edun, who was represented by the Permanent Secretary, Special Duties (PSSD) in the Ministry, Okokon Udo, observed that the $1.5bn SFTAS Programme-for-Results, which ends in December 2023, has come of age with remarkable achievements recorded by all the 36 States in key result areas namely: Fiscal transparency and accountability; Domestic revenue mobilization; Efficiency of public expenditures and Debt sustainability.
“We hope and encourage the Sub-nationals to continue with these laudable reforms beyond the SFTAS period,” the Minister said.
He said the Federal Government was always committed to the fiscal and monetary reforms that the administration has started, to provide an enabling business environment, diversify the revenue base of the economy, create fiscal space for investment in critical infrastructure and ensure macroeconomic stability.
“Together, we shall collectively build a resilient economy for Nigeria,” he said.
Following the success story of SFTAS, the Minister said the Federal Government in collaboration with the World Bank has come up with another programme called “State Action on Business Enabling Reforms (SABER)” that would effectively run from the year 2023 to 2025.
“This programme aims at improving the business enabling environment of Nigeria’s states. Other intervention programmes from the World Bank and other International Organisations would continue unabated”.
The $750m SABER Programme, which is currently awaiting the approval of an abridged External Borrowing Plan by the National Assembly, seeks to incentivize and strengthen the implementation of business enabling reforms covering land administration, the regulatory framework for private investment in fiber optic infrastructure, public private partnership and investment promotion frameworks, tax administration and the business enabling regulatory environment.
The World Bank Senior Economist, Samer Matta, congratulated the Federal and States’ Governments for the important fiscal reforms initiated under the States Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme and expressed the hope that they would be sustained, especially by new administrations in the States through adhering to the SFTAS Charter signed in August 2022.
Matta attributed the success of the SFTAS programme to the deployment of simple, but substantive eligibility criteria annually to open the Programme to all States for participation in any year.
He said the programme ensured that there was a minimum performance standard for receiving grants; making Technical Assistance available irrespective of meeting Eligibility Criteria and level of achievement of Disbursement Linked Results; Robust and credible results verification process; Use of performance- based criteria that is non-negotiable and consistently applied; Transparency of results encouraging virtuous peer competition; active peer learning among States facilitated by the Nigerian Governors Forum (NGF); and Utilization of state-level platforms for engagement at multiple political and technical levels.
He further highlighted that the implementation of SFTAS reforms enhanced the perception of states as having sound fiscal practices, a key factor for capital markets.
This improvement, he said, was bolstered by the availability of more comprehensive and improved fiscal data, facilitating a more informed, evidence-based dialogue.
The World Bank, Task Team Leader for Saber, Bertine Kamphuis, expressed optimism that the SFTAS ideals would be sustained even in the absence of further incentives, given the fact that SABER was a natural component of the sustainability strategy as it would continue to use two SFTAS Eligibility Criteria: the timely publication of National Chart of Account compliant budgets, and the timely publication of IPSAS-compliant audited financial statements, as well as elevate the SFTAS result on the timely publication of a debt sustainability report to an eligibility criteria.
