Business - News - January 13, 2021

Rivers, Bayelsa, two others ineligible for World Bank-assisted performance grants to states

Only Rivers, Bayelsa, Imo and Zamfara states were ineligible to benefit from the N123.348 billion performance-based grants to the 36 states of the federation.

The result of the just-concluded 2019 Annual Performance Assessment (APA) showed the
four states failed to meet the various disbursement-linked indicators (DLIs) to qualify for the grant.

The covered DLIs include achieving fiscal transparency, accountability, expenditure efficiency, revenue mobilization and debt sustainability.
Rivers and Bayelsa are two of the nine oil producing states in the Niger Delta region that routinely collect the highest allocations from the Federation Accounts.
The impact of such high monthly allocations hardly reflect in the quality life of the people and infrastructure due to the poor management of the resources, lack of transparency and accountability.

Objectives of SFTA

he Minister of Finance, Budget and National Planning, Zainab Ahmed, said The World Bank-assisted Federal Government States Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme-for-Results was principally to strengthen fiscal management at the states level.

The minister said a strong fiscal management involved effective mobilization and utilization of financial resources by the state governments to the benefit of their citizens in a transparent, accountable and sustainable manner, thereby reducing fiscal risks and encouraging a common set of fiscally responsible behaviours.
She said the grant is to reward states of the federation for embracing transparency and accountability in their operations, including the publication online within a specific timeframe their approved annual budgets and audited financial statements.

Latest disbursement
On Wednesday, the minister announced the disbursement of another part of the grant totaling about N123.348billion ($324.6million) to the states that met the stated criteria.

Mrs Ahmed said in a statement in Abuja by the Ministry’s Director of Press and Public Relations, Hassan Dodo, said the disbursement of the grant followed the achievement of results by the States in the just concluded 2019 Annual Performance Assessment (APA).

She said the assessment was carried out by the Office of the Auditor General for the Federation (OAuGF) as the Independent Verification Agent (IVA) and approved by the Programme Coordination Unit (PCU) of the Federal Ministry of Finance, Budget and National Planning.

The disbursement, the minister said, included N91.048 billion ($239.6 million) to 32 eligible states across various DLIs covered by the grant criteria.

The benefitting States received grants in accordance with the number of results achieved, with Sokoto State receiving the highest amount of N6.612billion, while Kano State got the lowest amount of N1.710billion.

Consequently, “Bayelsa, Imo, Rivers and Zamfara States got zero allocation due to their inability to meet the 2019 eligibility criteria which required States to publish online approved annual budgets and audited financial statements within a specific timeframe,” the Minister said.

Significant improvement

She the 2019 APA results were a significant improvement on the 2018 APA results where the total performance-based grants of N43.416 billion ($120.6 million) were received by 24 Eligible States, demonstrating the substantive progress States have made on fiscal reforms.

The second part of the disbursement, which involved a new COVID-19 pandemic response DLI, include the implementation of a tax compliance relief programme for individual tax payers and businesses by States by 30 September 2020.

Out of the 36 States of the federation, 34 were adjudged able to achieve the results for this new DLI for the total of N32.3 billion ($85 million) of grants.
Only two states, namely Anambra and Zamfara, failed to meet the stipulated criteria, and therefore not qualified for the grant

The disbursement followed the one in November, 2020 where a total of N66.5billion ($175 million) was granted to 35 States, which achieved results under another new COVID-19 response DLI involving the passing of an amended COVID-19 Responsive 2020 Budget by July 31, 2020.

The Minister said that since the first disbursement of the grant in April 2020, the Federal Government has so far disbursed a total N233billion ($620.6million) to the States under the $750 million World Bank-assisted SFTAS Programme-for-Results.

“Given the dwindling government revenue caused by crude oil price volatility, coupled with the current impact of COVID-19 pandemic, which has further intensified the need for improved fiscal transparency, accountability and sustainability, the SFTAS programme could not have come at a better time,” the minister said.

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