The Minister of Finance, Budget and National Planning, Mr. Zainab Ahmed yesterday disclosed that President Muhammadu Buhari has okayed the release of N656.1 billion for states over a period of six months to cushion the effects of their ongoing repayment of their bailout facilities as well as to enable them meet their salary obligations.
This is also as she disclosed that the World Bank has approved an additional $750 million financing to support the States’ Fiscal Transparency, Accountability and Sustainability (SFTAS) programme.
This is just as Lagos State Governor, Mr. Babajide Sanwo-Olu, has advised his fellow governors to cut down on wastes, but ensure that every unit of expenditure delivers maximum value and impact, for the benefit of the populace.
Ahmed and Sanwo-Olu said these at the National Council on finance and Economic Development (NACOFED) conference held in Lagos.
She explained: “The approval of Mr. President has been obtained for a bridging facility in the sum of N656.1 billion to be granted to states over a period of six months towards cushioning the effects of their resumption in the repayment of the three federal government bailout facilities (Salary Bailout, Excess Crude facility and Budget Support facility).
“Already, the modalities of the facility has been worked out and the disbursement is expected to commence by the CBN very soon.
“Government will also continue to provide other financing options to states in the form of concessionary loan facilities to support the development of vital sectors of the economy such as health, agriculture and SMEs aimed to complement the states in fighting the pandemic, creating the needed job for the people and alleviating poverty.
“The combined effect of these policies would assist in addressing the current security and other socio-economic challenges confronting the nation.”
According to her, “the introduction of the SFTAS programme for results and other similar programmes by the federal government assisted by World Bank are initiatives aimed at strengthening public finance management at the sub-national levels.
“I am highly impressed with the commitments shown by all the 36 state governments in implementing the reforms brought about by these laudable programmes. To this end, the federal government recently concluded arrangements with the World Bank to further make available another sum of $750 million as additional financing for the states under the SFTAS programme.”
She further pointed out that the federal government through the Central Bank of Nigeria (CBN) recently cut-down the interest rate on intervention facilities from nine per cent to five per cent per annum, which according to her, would aid growth and recovery.
She added: “The last couple of years presented series of challenges to us as a nation and the entire globe. From the decline in revenue to slow growth and recovery largely due to the fall in crude oil prices on account of falling global demand and the containment measures to fight the spread of COVID-19, which affected virtually every sector of the economy.
“The good news, however, is that our recovery rate from the pandemic has been sustainably good and encouraging. Fortunately, things are now looking up for us and our economy is bouncing back to normal.
“Based on the current economic outlook, our economy is projected to grow by 1.5 per cent this year and 2.9 per cent in 2022. Therefore, as we move to the reset opportunities, our focus should be on growing and consolidating the recovery efforts.”
Furthermore, she added that the federal government was committed to increasing non-oil revenue and had positioned to achieving a tax to revenue ratio of 15 per cent by 2023.
She added: “Our revenue reforms which are mainly focused on sustained improvement on non-oil taxes have started yielding results. The amendments introduced by the support of the National Assembly the Finance Act of 2019 and 2020 combined with the Government Strategic Revenue Growth Initiatives (SRGI), have also cumulatively yielded the desired results of enhancing sustainable increase in government revenue, promoting fiscal equity, aligning domestic tax laws with global best practices, tax incentives for infrastructure development and capital markets as well as micro, small and medium enterprises.”
“The initiatives have also helped in strengthening our institutions and Agencies. With this development, we are already on our way to achieving our target of a tax to revenue ratio of 15 per cent by 2023.”
Continuing, Sanwo-Olu said the ultimate goals for states must be value for money and the enhancement of the quality and timeliness of service delivery.
According to Sanwo-Olu, a robust public finance management system was the critical pathway for efficient and effective delivery of the dividends of democracy to the citizens, which according to him, must be carried out in a manner that was transparent and accountable to all.
In his keynote address titled: “Public Sector Finance Management in the New Normal, (Post Covid-19)” the governor said the gathering was to provide an opportunity to share thoughts, exchange views and forge a common front in addressing some of the fiscal and socio-economic challenges foisted on the country by the COVID-19 pandemic.
“What the pandemic (COVID-19) has done is to compel us all, whether in the public or private sectors, to focus more attention on exploring ways ‘to do more with less.’
“We have been forced to find ways of optimising spending, to ensure that, one, we are cutting down on waste excesses and things that we do not need, and two, that every unit of surviving expenditure delivers maximum value and impact, for the benefit of our populace.
“This is the time for Commissioners for Finance and Commissioners for Economic Planning to be sincere with their principals, who may have asked you to do the impossible.
“But indeed, we know this is the time for you to be frank and sincere to your principal that we have to think out of the box. You have to be very creative and do away with what will not be considered as important this time,” he said.
The governor also commended the federal government for faithfully implementing various initiatives aimed at improving the quality of Public Financial Management in Nigeria.
He said initiatives like the Treasury Single Account (TSA), the Presidential Initiative on Continuous Audit (PICA), the Government Integrated Financial Management Information System (GIFMIS), among others, including the States’ Fiscal Transparency, Accountability and Sustainability Programme for Results (SFTAS) Programme, have provided support to states to help them achieve desired fiscal reforms underlined by prudence, openness, transparency and accountability.
The governor said the programme has also highlighted to states, the need to redouble efforts aimed at increasing Internally Generated Revenue (IGR).