FG Disburses N66.5bn to States for COVID-19 Responsive 2020 Budget

Zainab Ahmed

By Ndubuisi Francis

The federal government has disbursed a total of N66.5 billion (USD$175 million) to eligible states under the Amended COVID-19 Responsive 2020 Budget results.

The Minister of Finance, Budget and National Planning,Mrs. Zainab Shamsuna Ahmed, who disclosed this in a statement released in Abuja, Wednesday by the ministry’s Director of Press and Public Relations, Mr. Hassan Dodo, explained that the disbursement followed compliance to the Amended COVID-19 Responsive 2020 Budget by 35 eligible states in the country.

The programme is wholly-financed with a loan of $750 million from the International Development Association (IDA), a member of the World Bank Group, under the performance-based grant component of the World Bank-Assisted States Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme-for-Results.

According to the minister, each benefiting state received a total sum of N1.9 billion (an equivalent of $5 million).

Rivers State is the only state that missed out on the grant due to its inability to meet the eligibility criteria which required each state to have passed and published in their respective websites by July 31, 2020 credible, fiscally-responsible COVID-19 responsive amended 2020 budgets duly approved by the state houses of assembly and assented to by the state governors.

According to Ahmed, the amended 2020 state budget must also include standardised budget documentation to enhance clarity, transparency and accessibility.

She added: “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 programs; and identified credible sources to fully finance the budget deficit to avoid accumulation of arrears”.

Ahmed stressed that the COVID-19 pandemic and the associated economic and fiscal shocks had put significant pressure on states’ fiscal resources and undermined the reality and credibility of the states’ original 2020 annual budgets.

The minister noted that a transparent, accountable and sustainable state-level 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.

She 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.

The World Bank-assisted SFTAS Programme, she stressed, 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.

The federal government had earlier in April, 2020 disbursed a total sum of N43,416 billion or $120.6 million to 24 qualified sates, based on their performance.