The Federal Government has disclosed its plans to provide fresh financial assistance to state’s currently facing serious financial challenges.
The Government in a press statement released on Saturday by the Federal Ministry of Finance said it is finalizing a conditional Budget Support Facility to provide financial relief to State Governments based on the states’ ability to meet a set of stringent fiscal conditions.
According to the statement, the Ministry of Finance explained that the facility is aimed at providing support to ailing states to enable them overcome some of their financial challenges.
The Ministry of Finance disclosed that the states would only be able to access the facility if they meet a stringent 22-point reform agenda called the Fiscal Sustainability Plan (FSP), that was approved by state governments and the National Executive Council, last month.
The FSP, According to the Ministry of Finance, encompasses a framework of reform measures including the requirement for the states to publish audited financial statements and budgets, biometric data capture, Bank Verification Number (BVN) payroll review exercises to sanitize payroll costs, as well as a limited recurrent expenditure level.
Other conditions will require the states interested in receiving the financial support to set and meet certain targets to enhance their Internally Generated Revenue (IGR); the establishment of Efficiency Units in the states to reduce overhead costs; privatization of State Owned Companies; domestication of the Fiscal Responsibility Act and limitations on securing further bank loans.
FG Sets Tight Conditions For Financial Aid For States
This might mean increased taxation, downsizing of state and local government workforce as well as other measures in order to meet up with the requirements for the financial aid from the federal government.
The new support package is aimed at helping states become more self-reliant, fiscally responsible and financially efficient.