Southwest States access $24.1 million of the World Bank SFTAS Grant

Southwest States access $24.1 million of the World Bank SFTAS Grant

by Abiodun Oladipo, Head of Programmes, DAWN Commission

The Federal Government recently disbursed N43.2billion to twenty-four (24) eligible States based on their achievement under the performance-based grant component of the World Bank-assisted States Fiscal Transparency, Accountability and Sustainability (SFTAS) programme in 2018. Out of the N43.2billion disbursed, the five (5) eligible States from the Southwest Region received about N8.7billion which represents about 20% of the total disbursement, while one (1) State was deemed not eligible to receive disbursement for 2018 performance period.

The programme, a $750 million wholly-financed loan facility by the World Bank Group affiliate, the International Development Association (IDA) to the Federal Government of Nigeria (FGN), was aimed at promoting the culture of fiscal transparency, accountability and sustainable development by sub-national entities in the country. Thus, the programme is more than just grants to the States, but a means of promoting fiscal prudence in the States.

The SFTAS programme is built upon the unsuccessful Financial Sustainability Programme (FSP) that was instituted during the first term of President Mohammadu Buhari in 2016. The implementation of the 22 action plans which was a pre-condition for States to access the Federal Government’s bail-out funds during the 2016/2017 fiscal crisis. The failure of FSP to achieve its strategic objectives around the five key elements of Accountability & Transparency, Increase in Public Revenue, Rationalisation of Public Expenditure, Public Financial Management Reforms, and Sustainable Debt Management necessitated the birth of the SFTAS performance-based programme

The SFTAS programme, with a lifespan of four years (2018-2021) seek to enhance accountability, transparency and fiscal sustainability in government. The program being a built-up on the Nigeria Fiscal Sustainability Plan (FSP) assessed States based on selected indicators from the 22 Action Plans of the FSP, and some indicators from the Nigeria Open Government Partnership (OGP) actions. These programme indicators, tagged Disbursement Linked Indicators (DLIs), are designed to improve service delivery through four (4) key result areas; increasing fiscal transparency and accountability; strengthening domestic revenue mobilization; strengthening efficiency in public expenditure; and sustainable debt management.

In order for all the States in Southwest Nigeria to fully access the SFTAS fund, DAWN Commission organised a customized and demand-based assessment programme with the technical support of the Department for International Development’s (UK-DFID) Partnership to Engage, Reform and Learn (PERL) for an in-depth appraisal of the States.

A 2-day intensive workshop was held in four (4) States and action plans were developed to guide the States in the process of achieving the Disbursement Linked Indicators (DLIs). The Commission, also collaborating with the UK-DFID PERL, developed the capacity of Civil Society Organisations (CSOs) in the Region on the framework, indicators and requirements of the programme to reinforce the accountability and transparency element of the SFTAS programme.

The DAWN/PERL technical support focused essentially on assessing existing systems, structures and processes for meeting the eligibility criteria and achieving the Disbursement Linked Results (DLRs) in the States. It provided necessary support to the States to meet the criteria for the Programme for Result (PforR) financing components, its 12 DLIs and their annual DLRs.

 

The recent disbursement of N42billion by the Federal Government was based on SFTAS nine indicators for 2018. Namely; Improved financial reporting and budget reliability, 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, 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.

Overall, Kaduna State achieved the highest result out of the 24 eligible States while Ondo States had the highest result out of the 5 eligible States in the Southwest Region. The Commission is currently assessing the performance table to see the areas the States of the Region faltered and support them to make amend in anticipation of subsequent assessment.

However, beyond being eligible for SFTAS fund, the result also shows the commitment of the Governments of Southwest States to fiscal transparency, accountability and sustainable development because the programme was principally introduced 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.

More so, the SFTAS programme, as observed by the Minister of Finance, Economy Planning and Budget, could not have come at a better time than now given the dwindling government revenue following the declining oil prices at the international oil market as a result of the current impact of COVID-19. The current situation of global pandemic, according to the Minister, has further intensified the need for improved practices in fiscal transparency, accountability and sustainability as enunciated in the SFTAS ideals.

Meanwhile, preparing the States for SFTAS assessment is not the only DAWN Commission’s intervention area in Public Financial Management (PFM) in the Region. The Commission has also worked with the States on the development of Medium Term Expenditure Framework (MTEF) and Medium Term Sector Strategy (MTSS) while some of the States are also being supported to develop their State Development Plans (SDP) which is expected to feed into the Regional Development Masterplan that the Commission was commissioned to develop for the Southwest States by the Western Nigeria Governors’ Forum (WNGF).

 

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