Again, FG plans bailout for states, but…

IMG_0624-620x330In what would turn out to be a third financial
bailout, the Federal Government, on Saturday
said it is finalizing a conditional Budget Support
Facility for state governments.
The facility is to provide financial relief to State
Governments based on the states meeting a set
of stringent fiscal conditions.
This according to the Mnistry of Finance, is
aimed at providing support to the states to help
them overcome their financial challenges.
It would be recalled that workers in a number of
states have embarked on strike action over
unpaid salaries with the governors claiming there
are no funds to offset the debts.

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The Ministry of Finance said in a statement that
the states would only be able to access the
facility if they meet a stringent 22-point reform
agenda called the Fiscal Sustainability Plan
(FSP), that was approved by state governments
at the National Executive Council, last month.
According to the Finance Ministry, the FSP
encompasses a framework of reform measures
including the requirement for the states to
publish audited financial statements and
budgets, biometric and Bank Verification Number
(BVN) payroll review exercises to sanitise payroll
costs, as well as limits on recurrent expenditure
levels.
Other reforms, the Ministry said, will require
states to set and meet targets to enhance
Internally Generated Revenue (IGR), the
establishment of Efficiency Units to reduce
overhead costs, privatisation of State Owned
Enterprises, domestication of the Fiscal
Responsibility Act and limitations on securing
further bank loans.

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