FG Disburses N43.4bn Performance-based Grants to 24 States

Mrs. Zainab Ahmed

By Ndubuisi Francis

The federal government has disbursed N43,416,000,000.00 ($120.6 million) as grants to 24 eligible states on the basis of results achieved in 2018 under the performance-based grant component of the World Bank-Assisted States Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme-for-Results.

SFTAS is wholly-financed with a loan amount of $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 Shamsuna Ahmed, made the disclosure in a statement released Wednesday in Abuja by the ministry’s Director of Press and Public Relations, Mr. Hassan Dodo. She explained that the disbursement followed the participation of the 24 eligible states in the recent Annual Performance Assessment (APA) carried out 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).

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.

Ahmed noted that the SFTAS programme was established by the federal government with a concessional loan of $750 million to support states through the provision of performance-based grants to the tune of $700 million, and technical assistance in the sum of $50 million to enhance their capacity to achieve the Disbursement- Linked Indicators (DLIs) otherwise known as the programme results.

According to the statement, the DLIs are derived from the country’s 22-Point Fiscal Sustainability Plan (FSP) and the 14 Open Government Partnership (OGP) commitments aimed at strengthening fiscal transparency, accountability and sustainability across all states of the federation.

The minister listed the Eligibility Criteria (EC) which states have to meet in order to be eligible to receive any grants to include the online publication of their approved annual budget and audited financial statement for the previous year; and the DLIs that eligible states receive grants for achieving improved financial reporting and budget reliability.

Others are increased openness and citizens’ engagement in the budget process; improved cash management and reduced revenue leakages through the implementation of state Treasury Single Account (TSA); strengthened Internally Generated Revenue (IGR) collection; biometric registration and Bank Verification Number (BVN) used to reduce payroll fraud.

Also included are improved procurement practices for increased transparency and value for money; strengthened public debt management and fiscal responsibility framework; improved clearance/reduction of stock of domestic expenditure arrears; and improved debt sustainability.

She reiterated that the World Bank-assisted SFTAS Programme is principally to strengthen fiscal management at the state level so as to ensure effective mobilisation and utilisation 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.

Ahmed observed that the SFTAS programme could not 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 12 states which missed out on the 2018 grants for failure to 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, hence 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 thus 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, while Katsina and Benue got the lowest amount of
N540,000,000.00 each,” the statement concluded.