The Federal Government (FG) has disclosed that the disbursement of N656.1 billion bridging facility grant to State Governments in the Federation would commence soon, following the approval of President Muhammadu Buhari.
Lovetvnews Nigeria reports that the minister of Finance, Budget and National Planning, Mrs (Dr.), Zainab Ahmed on Monday made the disclosure at the opening ceremony of the event of the National Council On Finance and Economic Development (NACOFED) 2021 hosted in Lagos.
According to her, interventions recently initiated by the Federal Government to assist States include the approval of the bridging facility in the sum of N656.1 billion to be granted to States over a period of six months towards cushioning the effects of the resumption in the payment of the three Federal Government Bailout facilities (salary bailout, excess facility and budget support facility).
“Already, the modalities of the facility had been worked out and the disbursement is expected to commence soon,” she said.
She disclosed that the Federal Government in a bid to further incorporate smooth running of interventions processes recently cut-down the interest rate on intervention facilities from 9 per cent to 5 per cent per annum.
She said such efforts of revenue reforms on sustained improvement in non oil taxes, amendments of the Finance Act of 2019 and 2020, Strategic Revenue Growth Initiatives, the introduction of States Fiscal Transparency, Accountability and Sustainability (SFTAS) programmes among others, are initiatives aimed at strengthening public finance management in the Country.
The Minister disclosed that the Federal Government recently concluded arrangements with the World Bank to further make available another sum of $750million as additional financing for States under the SFTAS programme.
Lamenting that the last couple of years presented series of challenges to the Country and the entire globe, Ahmed mentioned that the decline in revenue to slow growth and recovery was largely due to the fall in crude oil prices on account of falling global demand and the containment measures to fight the spread of COVID-19, which affected virtually every sector of the economy.
Ahmed noted that the recovery rate from the pandemic has been “sustainably good and encouraging,” she said the economy is bouncing back with current economic projection pegged at 1.5 per cent for 2021, and 2.9 per cent at the end of 2022.
According to her, the Federal Government is looking towards resetting opportunities, which she said was the Government’s focus for growing and consolidating the recovery efforts.
According to her, in efforts towards consolidating the exit from recession, “the government is taking further proactive measures to develop policies aimed at improving such sectors of the economy as agriculture, information technology and innovation, social infrastructures, among others.”
She disclosed that the Federal Government would continue to provide “other financing options to States in the form of concessionary loan to support the development of vital sectors of the economy such as health, agriculture and SMEs aimed to complement the States in fighting the pandemic, creating the needed job for the people and alleviating poverty.
“The combined effect of these policies would assist in addressing the current security and other socio-economic challenges confronting the nation,” she said.
Mentioning that the Federal Government would sustain vertical relationship with other levels of government, she said: “We shall continue to partner with States and other critical stakeholders to ensuring optimal use of our domestic resources as a means of consolidating our achievements.”
On the declining contributions of the my National Petroleum Corporation (NNPC) to thel me g Federation Account despite rising oil prices, she said the reason for the decline was because “the Corporation spends huge portion of its earnings in financing under-recoveries arising from the importation and sales of petroleum products below cost prices
“Government had for long, realised that petroleum subsidy is not sustainable given that it erodes revenue that should have been available to fund other expenditures that are critical to the wellbeing of our people.
She however said, with the careful implementation of the newly enacted Petroleum Industry Act (PIA) “which provides for the overhaul of the institutional, regulatory, and fiscal framework for the Oil and Gas sector would solve long standing issues facing the sector, particularly issues of pricing and production.”
Non-essential spending must stop — Sanwo-Olu
In his keynote address, Lagos State Governor, Mr. Babajide Sanwo-Olu said the States’ Fiscal Transparency, Accountability and Sustainability Programme For Results (SFTAS) Programme, has provided support to States “to help them achieve desired fiscal reforms underlined by prudence, openness, transparency and accountability.”
“The programme has also highlighted to States the need to redouble efforts aimed at increasing Internally Generated Revenue (IGR),” he added.
Sanwo-Olu, said the theme of the 2021 NACOFED Conference, tagged “Public Sector Finance Management in the New Normal, (Post COVID-19)” was very timely, following the experience of confronting strains from a global health pandemic “that has forced a rethinking of everything, including the management of public finances.
“Public sector budgets have needed to be reconsidered and re-ordered, as new priorities and concerns have shown up, especially in the area of health spending,” he said.
According to him, the conference will provide an opportunity for the Federal and the State Governments to share thoughts, exchange views “and forge a common front in addressing some of the fiscal and socio-economic challenges foisted on us by the pandemic.”
“The pandemic has also hit public finances significantly, forcing national and sub-national governments to struggle to find ways to maintain the levels of funding required to deliver on their promises and mandates.
“On the whole, what the pandemic has done is to compel us all, whether in the public or private sectors, to focus more attention on exploring ways “to do more with less.”
“We have been forced to find ways of optimizing spending, to ensure that, one, we are cutting down on waste and excess, and two, that every unit of surviving expenditure delivers maximum value and impact, for the benefit of the populace,” he said.
“From my experience as a Public Finance Administrator, I can state unequivocally that a robust Public Finance Management system is the critical pathway for the efficient and effective delivery of the Dividends of democracy to the citizens and must therefore be carried out in a manner that is transparent and accountable to all.
“The ultimate goals must be Value for Money, and the enhancement of the quality and timeliness of service delivery,” he said.
According to him, the implementation of such initiatives aimed at improving the quality of Public Financial Management in Nigeria. as the Treasury Single Account (TSA), the Presidential Initiative on Continuous Audit (PICA), the Government Integrated Financial Management Information System (GIFMIS) among others.
He submitted that the Country “must rapidly embrace technology as a tool for increasing transparency and accountability, as well as expanding citizens’ access to public services in a manner that is cost-effective and solution oriented.”
On cost of governance, he submitted that: “Every opportunity to reduce non-essential spending must equally be seized with both hands.”
He added that Government “must invest in building the human capacity required to adapt seamlessly to the social, legal, technological and policy demands of the new normal.”
“Here in Lagos State, we are doing a lot in that regard, from cleaning up our public payroll system, to embracing automation and technology in the management of land and property records and processes, to restructuring loans and bonds to ensure a productive lowering of our debt service costs, and also to exploring innovative ways of mobilizing capital to deliver on our vision of a truly 21st century Megacity,” he said.
In his welcome address, the Permanent Secretary, Federal Ministry of Finance, Budget and National Planning, Aliyu Ahmed, who commended the consistency of the Lagos State Government in developmental efforts towards improving national courses, said the deliberations in the forum would centre on brainstorming on national economic matters towards policy makings.
He said the T.H.E.M.E was carefully selected to proffer possible solutions to address strains posed by the COVID-19 pandemic, by harnessing opportunities and tackling challenges.
In his goodwill message, the Chairman, Senate Committee on Finance, representing Lagos West Senatorial District, Senator Solomon Olamilekan, said it was instructive to consider how the pandemic has affected financial management in the Country and to develop strategies to address same for effective service delivery.
Mentioning that the National Assembly has a role to play, he stressed that the present realities demand robust health service delivery through strategic budget planning.
The Chairman, Committee on Finance, House of Representatives, Hon. Kabiru Idris, said the House is committed to kick-start all processes to effect resolutions reached by the Council.
Chairman, Revenue Mobilisation Allocation and Fiscal Commission, Engr. Elias Mbam represented by the Secretary of the Commission, Muhammhed, Bello Shehu, said the forum is timely with national development plan, the implementation of which he said would be productive to unleashing proper economic diversification.
The NACOFED convenes key finance stakeholders including Governors, Ministers, Permanent Secretaries, Accountant Generals, Commissioners of Finance of the various States, Heads of Federal and State Agencies, Legislators and key economic drivers of the private sectors among others.
State governors must not be allowed to divert grant — NLC
In reaction to the development, the Chairman, Nigerian Labour Congress (NLC), Ogun State chapter, Emmanuel Bankole, said while the development is welcome, it is however important that the funds are used for the intended purposes.
“We sincerely hope the fund won’t be diverted just as it was done in the time past when President Buhari gave the State governments bailout which was specifically to help solve the issue of non payment of salaries but many of the State governors did as they like with the fund.
“As we speak, may be apart from Lagos State, I don’t know of any other State that is not having labour issues relating to payment of salaries, deductions, pensions and gratuities.
“The economy will surely receive a boost if the State governments could use this fund to settle some of the outstanding. This is because when the workers collect this money, they won’t keep it in their pockets, they will for instance go to the markets and spend part of it to the traders; they will spend it on their projects and by this the artisans such as the bricklayers, the carpenters among others will also be impacted for good and the economy will keep on growing.
“The money should be judiciously spent to put smiles on the faces of the people; let’s have more of human capital development.
“I also strongly suggest that when this fund is eventually given by the Federal Government, labour unions too should do some monitoring to ensure that the funds are not diverted but s
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