(List) FG Willing to Bailout States with N90bn, But only Under these 23 Conditions

With many states finding themselves in financial turmoil which has in turn led to inability to pay civil servants which has in turn led to strike actions in various states in the federation, the federal government has expressed its willingness to bail the states out with N90bn.

With dwindling oil revenues a constant problem, states have found themselves at the mercy of the federal government for funds to help run their states.

The federal government while willing to show this gesture of largesse has not done so without conditions. The federal Government has promised to give the N90bn over one year to all the states if and only if they fulfill these 23 conditions.

You can read them 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.

The minister of Finance, Kemi Adeosun explained how the loan was going to be implemented, “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”.

“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”.

“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”.