The Federal Government on Wednesday disclosed that a total of N471.9 billion has been disbursed to states out of the $1.5 billion World Bank-assisted States Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme for Results (PforR).
Minister of Finance, Budget, and National Planning, Zainab Ahmed made this disclosure at the launch of the States Charter to Sustain fiscal transparency, accountability, and sustainability reforms, at the State House Conference Center, Abuja.
Represented by the permanent secretary in the ministry, Aliyu Ahmed, she noted that beyond benefitting from the grants, all the 36 States in the Federation have fully domesticated the fiscal reforms in their public financial management system through the adoption of appropriate processes and practices as well as legal and regulatory frameworks which are already yielding positive outcomes.
The launch of the States Charter was aimed at sustaining the ideals of Fiscal Transparency, Accountability, and Sustainability by the Nigeria Governors Forum and also marked a milestone in the implementation and sustenance of reforms in Public Finance Management in Nigeria.
She commended President Muhammadu Buhari, for introducing laudable and enduring reforms in Public Finance Management among which is the World Bank-Assisted States Fiscal Transparency Accountability and Sustainability (SFTAS) Programme for Results.
According to her, the State governments have demonstrated a high level of ownership, active peer learning, and peer competition which culminated in a very strong performance by most States in all the Key Results Areas of the SFTAS Programme which include increasing fiscal transparency and accountability; strengthening domestic revenue mobilization; increasing efficiency in public expenditure and strengthening debt transparency and sustainability.
“Indeed, the very high level of political visibility and implementation structures created across the 36 States contributed largely to the successful implementation of the Programme over the period 2018 to 2022.
“The programme has instilled fiscal behavior and standards and facilitated the widespread adoption of good practices in fiscal and public financial management across the States while respecting their fiscal autonomy through the preparation of Citizen -based Budgets, timely preparation and publication of Annual Budget and Audited Financial Statement as well as the adoption of National Charts of Account.
“To date, 28 States have passed their Audit Law in line with internationally acceptable standards and all 36 States have passed their 2020 Audited Financial Statements before 31 July 2021.
“Also, 32 States prepared and published Local Governments’ Audited Financial Statements (AFSS) for FY2018, FY2019, and FY2020 including all allocations and actual receipts of State-Local Government Joint Account Allocation Committee (SLJAAC) transfers for each LG.”
Ahmed further disclosed that the programme has also strengthened fiscal transparency by improving overall budget transparency and accountability to help build trust in government, enhance the monitoring of fiscal risks, and improve accountability in public resource management, adding that “All the 36 States prepared the Year 2022 budget in line with the National Charts of Account”
Other successes recorded by the programme include; accountability through the deployment of measures such as BVN in the Payroll Systems and the implementation of Treasury Single Accounts to minimize leakages in the system and promote efficiency in resource management.
She said “To date, 31 States have linked BVN to payroll while thirteen (13) have adopted the Treasury Single Account. Also, 30 States had conducted biometric registration of at least 90% of their civil servants and pensioners on the payroll and addressed identified payroll fraud.
“Also, many States have been able to increase their IGR significantly by reducing IGR leakages through the implementation of State-level Treasury Single Account (TSA), and intensifying efforts in IGR collection.”
According to the Minister, “27 States passed their Consolidated State Revenue Code (CSRC) by 2020 and 18 States were able to record a nominal IGR collection in 2020 that was equal to or higher than their 2019 nominal IGR collection. In addition, twenty (20) States have shown a very strong commitment to establishing institutional arrangements focused on laying a foundation for State Property taxation which is a significant potential revenue source.
“ To date, twenty-nine (29) States have passed Public Procurement Laws and all 36 went ‘live’ on an e-procurement platform by 31 December 2021. This will improve procurement practices to enhance value for money and reduce opportunities for corruption and misuse of public resources, thereby increasing the efficiency of public expenditure.
“It has strengthened fiscal sustainability through increased efficiency in spending, and debt sustainability to prevent further fiscal crises and enhance the fiscal space for productive spending aimed at supporting growth and public service delivery. Currently, thirty-three (33) States have passed State Debt Laws.”
Ahmed stated that implementation of COVID-19 responsive indicators freed resources for effective response to COVID-19 at the peak of the Pandemic.
“All the 36 States had passed credible, fiscally responsible, COVID-19 responsive Amended 2020 State Budgets which significantly revised revenues in line with realistic projections, reduce non-essential overhead and capital expenditures with a view to protecting social expenditures, which significantly strengthened national response to COVID-19 and aligned efforts at both federal and State levels.
“It successfully encouraged peer learning and competition amongst States and further enhanced delivery of good governance.
The Minister commended the NGF Chairman, and the Ekiti State Governor, Kayode Fayemi, the Sokoto State Governor, Aminu Tambuwal, and their Edo State Counterpart, Governor Godwin Obaseki who chairs the Nigeria Governors’ Forum SFTAS Committee.
“The trio have indeed played major roles in institutionalizing SFTAS Programme not only in their States where they recorded outstanding achievements but in all the States of the Federation. The speedy adoption of this Charter bears great testimony to their unrelenting efforts in entrenching SFTAS ideals in government processes at the State level”
The Minister also urged states to continue to sustain the ideals of SFTAS as enshrined in the Charter and build on the successes already recorded.
On his part, Permanent Secretary noted that SFTAS has been able to help states in the payment of salaries, without federal government allocation.
“Well, you know, if you remember the history of how even SFTAS was introduced in 2015, is because the state government had difficulties paying salaries.
“So federal government had to step in, again and again, to bail them out. But at the time, the federal government stepped back, they couldn’t give out these interventions or help the states without making them go through some disciplinary procedure, in terms of how they were going to manage their finances, or they’re going to make their states viable.
“That was how we contacted the World Bank. And then we packaged the SFTAS programme in such a way that it will reward good behavior. putting in place good systems in terms of fiscal transparency, procurement, as well as increasing the internally generated revenue (IGR).
“So that going forward, at the end of the interventions, the states on their own will become sustainable”
“The meeting we just had right now, the governor’s launched their charter, which is a commitment to ensure that they become fiscally sustainable at the end of this intervention. And with what I’ve seen in terms of the fiscal anchors they have put in place, I think we are on the road to having that”
The Director General ( DG), Debt Management Office (DMO), Patience Oniha, noted that “ the good thing about it is that sometime in 2016, a framework was adopted collectively by the State governments and the federal government, called, the fiscal sustainability framework for sub nationals to introduce a number of measures and undertake some activities that will improve public financial management.
“So we have a Public Procurement Act, as you heard that concise procurement, which is an expenditure, a major part of the expenditure. We know now that the states and in effect those laws as well, so there is compliance that goes to the state, specific country, as well as the state assembly as required. So those laws are there. They’ve also established if I may speak in return today, more of them have enacted their own. Some colleagues, public finance, management, know some public debt management, business, we have a different. So there are things that business goes through a process, not one person. Finance I think we, we should admit, as we all know, that fiscal position at all levels can be better, it’s not as robust as you want it to be. So it’s not what is or is not because there are no processes or laws. And I think that’s the first thing is very relevant for the fact that the state governments, part of the component of sifters is to generate revenue, they generate sufficient revenue, that will only be complimentary just to be able to meet the expenditures, including salary.
The World Bank Country Director for Nigeria, Shubham Chaudhuri, revealed that the program has made “States to be much more open and transparent about their budgets, about what they’re spending on and on raising more internally generated revenue IGR, so that they can keep the state governments functioning, delivering dividends to the citizens of the state.
“I think going forward, we will see these governors, the excellencies have just made a commitment to maintaining a lot of the same practices, to being held accountable, being transparent about how they’re spending, about procurement, relying on E-procurement systems, publishing all of this information. But this will require the media, other stakeholders, civil society, to this give, really have this be a collective effort to ensure that SFTAS has started continues.”
By Juliana Taiwo-Obalonye,
The Sun