Following the economic turmoil Nigeria is currently going
through, the Federal Government (FG) has once again, made
moves to rescue state governments who have been hit by the
crisis.
Last year, the state governments received N713.7billion bailout
from the FG to pay workers backlog of salaries, but they are still
grappling with the same challenges due to Nigeria’s dwindling
oil revenues.
The FG has now decided to give out another N90 billion loan,
which the government believes will help the states in their bid to
be less dependent on the monthly handout from the federation
account.
President Buhari and his team are using every means possible
to ensure that the Nigerian economy does not collapse
through, the Federal Government (FG) has once again, made
moves to rescue state governments who have been hit by the
crisis.
Last year, the state governments received N713.7billion bailout
from the FG to pay workers backlog of salaries, but they are still
grappling with the same challenges due to Nigeria’s dwindling
oil revenues.
The FG has now decided to give out another N90 billion loan,
which the government believes will help the states in their bid to
be less dependent on the monthly handout from the federation
account.
President Buhari and his team are using every means possible
to ensure that the Nigerian economy does not collapse
The loan will be given over one year and will be extended to the
states after they have met 22 conditions.
Read the conditions below:
1. Publish audited annual financial statements within nine
months of financial year end.
2. Comply with the International Public Sector Accounting
Standards (IPSAS)
3. Publish state budget online annually
4. Publish budget implementation performance report online
quarterly
5. Develop standard IPSAS compliant software to be offered to
states for use by state and local governments
6. Set realistic and achievable targets to improve independently
generated revenue (from all revenue generating activities of the
state in addition to tax collections) and ratio of capital to
recurrent expenditure
7. Implement targets
8. Implement a centralised Treasury Single Account (TSA) in
each state
9. Have quarterly financial reconciliation meetings with federal
government to cover VAT, PAYE remittances, refunds on
government projects, Paris Club and other accounts
10. Share the database of companies within each state with the
Federal Inland Revenue service (FIRS). The objective is to
improve VAT and PAYE collection
11. Introduce a system to allow for the immediate issue of VAT/
WHT certificates on payment of invoices. Review all revenue
related laws and update obsolete rates/tariffs
12. Set limits on personnel expenditure as a share of total
budgeted expenditure
13. Biometric capture of all states’ civil servants will be carried
out to eliminate payroll fraud
14. Establish efficiency unit
15. Federal government online price guide to be made available
for use by states
16. Introduce a system of continuous audit (internal audit)
17. Create a fixed asset and liability register
18. Consider privatisation or concession of suitable State-owned
enterprises to improve efficiency and management
19. Establish a capital development fund to ring- fence capital
receipts and adopt accounting policies to ensure that capital
receipts are strictly applied to capital projects
20. Domesticate Fiscal Responsibility Act (FRA)
21. Attainment and maintenance of a credit rating by each state
of the federation
22. Federal government to encourage states to access funds
from the capital markets for bankable projects through issuance
of fast- track Municipal bond guidelines to support smaller
issuances and shorter tenures
23. Comply with the FRA and reporting obligations, including: No
commercial bank loans to be undertaken by States; Routine
submission of updated debt profile report to the DMO.
Read the conditions below:
1. Publish audited annual financial statements within nine
months of financial year end.
2. Comply with the International Public Sector Accounting
Standards (IPSAS)
3. Publish state budget online annually
4. Publish budget implementation performance report online
quarterly
5. Develop standard IPSAS compliant software to be offered to
states for use by state and local governments
6. Set realistic and achievable targets to improve independently
generated revenue (from all revenue generating activities of the
state in addition to tax collections) and ratio of capital to
recurrent expenditure
7. Implement targets
8. Implement a centralised Treasury Single Account (TSA) in
each state
9. Have quarterly financial reconciliation meetings with federal
government to cover VAT, PAYE remittances, refunds on
government projects, Paris Club and other accounts
10. Share the database of companies within each state with the
Federal Inland Revenue service (FIRS). The objective is to
improve VAT and PAYE collection
11. Introduce a system to allow for the immediate issue of VAT/
WHT certificates on payment of invoices. Review all revenue
related laws and update obsolete rates/tariffs
12. Set limits on personnel expenditure as a share of total
budgeted expenditure
13. Biometric capture of all states’ civil servants will be carried
out to eliminate payroll fraud
14. Establish efficiency unit
15. Federal government online price guide to be made available
for use by states
16. Introduce a system of continuous audit (internal audit)
17. Create a fixed asset and liability register
18. Consider privatisation or concession of suitable State-owned
enterprises to improve efficiency and management
19. Establish a capital development fund to ring- fence capital
receipts and adopt accounting policies to ensure that capital
receipts are strictly applied to capital projects
20. Domesticate Fiscal Responsibility Act (FRA)
21. Attainment and maintenance of a credit rating by each state
of the federation
22. Federal government to encourage states to access funds
from the capital markets for bankable projects through issuance
of fast- track Municipal bond guidelines to support smaller
issuances and shorter tenures
23. Comply with the FRA and reporting obligations, including: No
commercial bank loans to be undertaken by States; Routine
submission of updated debt profile report to the DMO.
Speaking on the loan, minister of finance, Mrs Kemi Adeosun
said: “The amount of the loan is N50billion for three months to be
shared across the 36 states, including FCT and then N40billion for
nine months.
“The idea is to tie states over for a year so that they rebalance,
which is an average of about N1.3billion per state for the first three
months and N1.1billion for the next nine months.
“It is a loan and it is fully repayable although it has a secured tie
against future dividends, revenues and any amount that government
might owe the states”.
Meanwhile, the federal government has barred banks in the
country from giving loans to state governments. The decision
was taken in line with the Fiscal Sustainability Plan (FSP) of the
government.
said: “The amount of the loan is N50billion for three months to be
shared across the 36 states, including FCT and then N40billion for
nine months.
“The idea is to tie states over for a year so that they rebalance,
which is an average of about N1.3billion per state for the first three
months and N1.1billion for the next nine months.
“It is a loan and it is fully repayable although it has a secured tie
against future dividends, revenues and any amount that government
might owe the states”.
Meanwhile, the federal government has barred banks in the
country from giving loans to state governments. The decision
was taken in line with the Fiscal Sustainability Plan (FSP) of the
government.
No comments:
Post a Comment