Buhari administration to provide fresh bailout for states

– The federal government finalises the
provisions of support program for the
‘bankrupt’ states
– A 22-point reform agenda titled the
Fiscal Sustainability Plan (FSP) will be
applied for those states that meet a list
of requirements
– Once implemented, the states would
be able to clear the workers’ salaries
arrears
Kemi Adeosun, the minister of finance,
reassured of government’s determination
to attain financial discipline across state
governments. She also promised to resolve
the issue of non-payment of workers’
salaries in Nigeria.
The minister said the established Budget
Support Facility will help the state
governments not only survive, but fulfil
salary obligations.

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However, the financial relief package would
be available only for the states that would
be meeting a set of stringent fiscal
conditions:
– publish audited financial statements and
budgets;
– conduct biometric and Bank Verification
Number payroll review exercises to sanitise
payroll costs;
– set and meet targets to enhance
Internally Generated Revenue;
– establish of efficiency units to reduce
overhead costs;
– domestication of the Fiscal Responsibility
Act;
– start privatisation of some of the state-
owned enterprises;
– put limits on recurrent expenditure
levels on further bank loans.
States that do to meet the agreed reform
targets are to be excluded from further
funding.

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It would be noted that the drastic drop of
oil prices from USD100+ per barrel in the
middle of 2014 to USD49 per barrel as of
today led to sharp decline of money
received by the state government from the
federal government.
The situation lead to crisis with non-
payment of civil servants’ salaries for
months and to devaluation of the national
currency, naira, which stands at 360 per
one US dollar at the ‘black’ market.

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