The World Bank says it is set to disburse an additional $750 million to strengthen the implementation of the States Fiscal Transparency, Accountability and Sustainability (SFTAS) scheme.
The scheme was approved for Nigeria in December 2020 to support the implementation of the National Executive Council’s (NEC) COVID-19 Plan.
The planned disbursement was disclosed yesterday during the national workshop on Citizens Accountability Report (CAR) template under the SFTAS, which held in Lagos State for Southern states.
The CAR is a series of audit statements prepared by a government agency on behalf of the government to the citizens to ensure accountability of public funds.
Programme Manager of the SFTAS/Open Government Partnership (OGP) Nigeria, Mr. Andrew Onyeanakwe, during the workshop, said: “Additional financing of $ 750 million to expand the programme to support state (governments) to implement the NEC COVID-19 Plan in response to COVID-19 was approved by the World Bank Board in December 2020.”
He added that the disbursement is a loan from the World Bank to the federal government to be provided as conditional performance-based grants to state governments that actually achieved results under the SFTAS programme.
He said: “Let me re-emphasise that this is a grant and not a loan to the states, so the burden of repayment is on the federal government. The grants are performance-based so are not shared across the board according to a formula like the monthly FAAC transfers to states where every state government takes something home regardless of fiscal performance.
“Disbursement of performance-based grants under the SFTAS programme will require a state government to first achieve the annual eligibility criteria, which are the online publication of the approved annual budget and audited financial statement within the specified time limit. Then eligible states receive grants in proportion to the number of Disbursement Linked Indicators (DLIs) they achieve each year. So you can see that there are parameters that are strictly followed as states have to achieve tangible and meaningful results to access the grants.”
Some of the elements of the DLIs include 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) and the strengthening of Internally Generated Revenue (IGR) collection.
Others are the reduction of payroll fraud through the use of biometric registration and Bank Verification Number (BVN), improved procurement practices for increased transparency and value for money, strengthened public debt management and fiscal responsibility framework, improved clearance/reduction of the stock of domestic expenditure arrears and debt sustainability.
He stated that the objective of SFTAS is to strengthen fiscal transparency, accountability and sustainability across all states of the federation.
The SFTAS programme for results was initially approved by the World Bank Board in June 2018, which released $750 million loans that comprised $700 million performance-based grants from federal to state governments that achieved the annual eligibility criteria and the (DLIs) and $50 million for technical assistance to states to help them achieve the DLIs and ensure no state was left behind.
A participant at the workshop and the Director of the Civil Resource Development and Documentation Centre, Nigeria, Mr. Ralph Ndigwe, said the CAR would enhance the public’s trust in government programmes by enabling the citizens to hold government accountable by understanding governance processes.
Ndigwe said: “For a long time Nigerians have suffered for lack of knowledge on fiscal governance due to long military rule that made Nigerians think that government affairs are for civil servants alone.
“But under democracy, we realised that people have to understand and participate in governance in order to receive benefits.
“The essence of what we are doing here is to get the citizens to understand how they can get involved in governance so that they can improve their lives and help the government to function better as no government will succeed without the trust and involvement of its citizens.”
A public financial management facilitator for the UK Funded Foreign Commonwealth and Development Office-Partnership to Engage Reforms and Learn, Mr. Basil Obasi, stated that the purpose of the CAR “is to enable the government to report their financial statements in a way that is understandable to the public in order to create the avenue that will increase accountability and transparency on the part of government and further help the civil society and the media to understand the government’s accounting process and documentation so that they will ask the right questions about how the public fund is being utilised.”