Home Sectors BUSINESS & ECONOMY World Bank: FG Disburses N351.65bn To Promote Fiscal Transparency

World Bank: FG Disburses N351.65bn To Promote Fiscal Transparency

The World Bank has stated that Nigeria is among a list of top 10 countries with high debt risk exposure.
The World Bank has stated that Nigeria is among a list of top 10 countries with high debt risk exposure.

In the previous four years, the federal government has distributed a total of N351.65 billion in funds to participating states under the World Bank-assisted States Fiscal Transparency, Accountability, and Sustainability (SFTAS) Programme for Results (PforR).

Mr. Stephen Okon, National Programme Coordinator of SFTAS, made the announcement over the weekend in Abuja, on the margins of a national workshop for civil society organizations (CSOs). The World Bank authorized the four-year SFTAS Programme (2018-2022) in June 2018 and it began in May 2019 to encourage nations to adopt fiscal transparency, accountability, and sustainability.

The initial $750 million World Bank loan included two components: federal government performance-based loans to states for meeting the Annual Eligibility Criteria and Disbursement Linked Indicators (DLIs), which are program results. SFTAS is intended to give performance-based incentives and technical help to states in order for them to execute the 22-point Fiscal Sustainability Plan (FSP) and the Open Government Partnership (OGP).

Fiscal Transparency and Accountability; Strengthen Domestic Revenue Mobilisation; Increase Efficiency in Public Expenditure; and Strengthen Debt Sustainability are the four primary areas where states are required to dramatically improve performance. Okon stated that of the $1.5 billion released by the World Bank in two tranches of $750 million each, the sum of N351,650,867,450 had been disbursed to states that met the Disbursement Linked Indicators (DLIs).

He said: “We started disbursing the second tranche of the $750 million long ago, and in fact, it might interest you to note that up till now, about N351.65 billion has been disbursed to states as grants for achievements made in respect of what we call the Disbursement Linked Indicators.”

“Currently, we are also in the process of making more disbursements for the 2020 APA and the 2021 APA (Annual Performance Assessment). “The 2021 APA, which we expect to disburse in October will be the last of this disbursement.

Okon stated that SFTAS came with what he described as a ‘dangling gold’, adding that the message is: “If you do this, we are going to pay a certain amount of money. It’s something we welcomed and started pushing right from then to see to what extent we get those states to open as much as possible.”

According to him, the SFTAS Programme which comes to an end this year has achieved so much in building transparency, accountability and sustainability among the states, particularly in terms of accountability. He noted that it had made all the states publish their annual budgets and their end-of-year accounts on a timely basis.

“We also have had all the states improve their internally generated revenue. Then, in terms of building a basis for comparison among the states, we have all the states currently in terms of matters that relate to Treasury Single Account (TSA), matters that relate to procurement law, and matters that relate to audit law.

“Almost all the states in the federation now have all these in place and it has promoted accountability, transparency, and accountability among the states of the federation,” he stated.

On the possible extension of the SFTAS Programme beyond 2022, Okon disclosed that no clear position had been taken on that. However, he stated that because of the impact on the states and public finance management, it was not impossible that such considerations may be explored moving forward.

Earlier in his briefing for the CSOs, Okon noted that in a bid to encourage a common set of fiscal behaviour aimed at promoting fiscal transparency, accountability, and sustainability among the states of the federation, the World Bank and the federal government developed a four-year (2018 – 2022) Programme for Results (PforR) facility worth $750 million tagged States Fiscal Transparency, Accountability and Sustainability (SFTAS). Following the advent of COVID-19 in December 2020, he added that the World Bank approved additional financing of $750 million to the SFTAS PforR to assist states to cope with the fiscal constraints occasioned by the pandemic.

The SFTAS National Programme Coordinator said the program combines select actions from the Fiscal Sustainability Plan (FSP) and the Open Government Partnership (OGP) agenda to form its disbursement-linked results, which states are to meet to access funds.

“As part of its strategies to ensure the sustainability of fiscal reforms, the SFTAS Programme Coordination Unit, Federal Ministry of Finance, Budget and National Planning is engaging stakeholders on the demand side like the CSOs who can ensure that fiscal transparency and accountability are sustained in state public finance management (PFM) activities.

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