FG Disburses Fresh N123.348bn Grants to States

Zainab Ahmed

•Bayelsa, Imo, Rivers, Zamfara get zero allocations
•Govt limits collection cost of revenue agencies to 50%

By Ndubuisi Francis

The federal government has disbursed another tranche of performance-based grants totalling N123.348 billion ($324.6 million) to states under its States Fiscal Transparency Accountability and Sustainability (SFTAS) programme for results.

This brings the total disbursement under the programme so far to N233.264 billion ($620.2 million) since the first disbursement in April 2020.

The Director, Press and Public Relations, Ministry of Finance, Budget and National Planning, Mr. Hassan Dodo, said in a statement yesterday in Abuja that the disbursement followed the achievement of results by the states in the just-concluded 2019 Annual Performance Assessment (APA).

Dodo quoted the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, as saying that 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.

According to her, the disbursement included N91.048 billion ($239.6 million) of performance-based grants for the 2019 APA results achieved by 32 eligible states across various Disbursement Linked Indicators (DLIs) covering fiscal transparency, accountability, expenditure efficiency, revenue mobilisation and debt sustainability.

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

The minister said: “Bayelsa, Imo, Rivers and Zamfara States got zero allocations 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 2019 APA results, she noted, were a significant improvement on those of 2018 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.

She said the second part of the disbursement involved a new COVID-19 response DLI.

This involves the implementation of a tax compliance relief programme for individual taxpayer and businesses by states as of 30 September 2020.

Thirty four out of 36 states (only Anambra and Zamfara States missed out) achieved the results for this new DLI for the total of N32.3 billion ($85 million) of grants.

The statement said the disbursement came after the recent one in November 2020 by the federal government in which N66.5 billion ($175 million) was granted to 35 states that achieved results under another new COVID-19 response DLI: the passing of an Amended COVID-19 Responsive 2020 Budget by July 31, 2020.

The minister stated that since the first disbursement in April 2020, the federal government has thus far disbursed a total of N233 billion($620.6 million) to the states under the US $750 million World Bank-Assisted States Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme-for-Results.

Ahmed reiterated that the World Bank-assisted SFTAS Programme 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 their citizens in a transparent, accountable and sustainable manner. This is to ensure a reduction in fiscal risks and encouraging a common set of fiscally responsible behaviours.

She noted that the SFTAS programme could not have come at a better time, given the dwindling government revenue occasioned by oil price volatility and 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.

“We have thus far successfully adapted and implemented the SFTAS Programme to provide timely support to states with a view to strengthening their fiscal capacity for responding to numerous fiscal challenges in their respective domains.

“The increase in the number of benefitting states and results achieved is indicative of the wider acceptance of SFTAS ideals by all states of the federation and this would herald a new era of transparency and accountability in fiscal governance at the sub-national level,” she said.