Did you people think it was play-play? That the government would (be seen to) hand out billions of naira just like that?? Plix. We are in the Age of Change! The Federal Government has spelt out 22 stringent conditions Nigeria’s 36 states must fulfil to be eligible to draw from the 90 billion naira set aside to bail out states facing severe financial difficulties.
To access the bail out funds, each state must fulfil ALL 22 conditions:
- Publish audited annual financial statements within 9 months of financial year end.
- Introduction and compliance with the International Public Sector Accounting Standards (IPSAS). Publish state budget online annually.
- Publish budget implementation performance report online quarterly.
- Develop standard IPSAS compliant software to be offered to States for use by State and Local Governments.
- 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.
- Implementation of targets Implement a centralised Treasury Single Account (TSA) in each State.
- Quarterly financial reconciliation meetings between Federal and State Governments to cover VAT, PAYE remittances, refunds on Government projects, Paris Club and other accounts.
- Share the database of companies within each State with the Federal Inland Revenue Service (FIRS). The objective is to improve VAT and PAYE collection.
- Introduce a system to allow for the immediate issue of VAT / WHT certificates on payment of invoices.
- Review all revenue related laws and update of obsolete rates / tariffs. Set limits on personnel expenditure as a share of total budgeted expenditure.
- Biometric capture of all States’ Civil Servants will be carried out to eliminate payroll fraud.
- Establishment of Efficiency Unit. Federal Government online price guide to be made available for use by states.
- Introduce a system of continuous audit (internal audit).
- Create a fixed asset and liability register.
- Consider privatisation or concession of suitable State owned enterprises to improve efficiency and management.
- 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.
- Domestication of the Fiscal Responsibility Act (FRA).
- Attainment and maintenance of a credit rating by each state of the Federation.
- 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 amounts of issuance and shorter tenures.
- Full compliance with the FRA and reporting obligations, including:
- No commercial bank loans to be undertaken by States; and
- Routine submission of updated debt profile report to the DMO
Hian. Many of the state governments cannot meet the 22 conditions if the Federal Government should really follow through o! Many states do not have the structure, systems or processes in place to warrant such level of transparency and probity. .
But it’s very good. These states really have to work on the list – not just for the sake of the bailout but because THIS IS WHAT GOOD GOVERNANCE ACTUALLY LOOKS LIKE!
No bailout without conditions attached! Every state government have commissioners for finance and planning. Make dem go siddon, think and work on the 22 conditions!
The state governments clamouring for governance restructuring must be trained on how to be responsible in handling public funds with honesty, probity and accountability.
Era of corruption and impunity is gone! There are some state governments championing restructuring, many of them with their ulterior motives. If they cannot be accountable, then what is the hope of their citizens?
Look, the news has already come out that five of the thirty-six states have passed through the stringent conditions and are on track to being give their own allocation. It’s not impossible; just alien to states who have never given transparency a go before.
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