Nigeria’s economic crisis: Govt plans fresh bailout for states

*Kemi-Adeosun, Nigeria's finance minister.

*Kemi-Adeosun, Nigeria’s finance minister.

Oscarline Onwuemenyi

12 June 2016, Sweetcrude, Abuja – The Federal Government announced over the weekend that it will give fresh financial support facility to state governments to cushion the effects of the current economic crisis.

The scheme, which comes with stringent conditions, is designed to provide relief to the states, many of which are finding it difficult to pay their workers’ salaries.

The Federal Government recently gave the states a bailout to enable the States to clear the arrears of salaries owed their workers. But, according to reports emanating from the states, the problem has refused to go away as many states are currently embroiled in economic problems and thus unable to pay workers for several months.

According to a statement from the Ministry of Finance, yesterday said that further relief would come their way soon provided they meet a 22-point reform agenda tagged the Fiscal Sustainability Plan (FSP).

The FSP is said to have been endorsed by the states themselves at a meeting of the National Economic Council recently.

The conditions require the states to publish their audited financial statements and budgets, biometric and Bank Verification Number (BVN) payroll review exercises for the workers and restricting recurrent expenditure.

Besides, the states are expected to set and meet targets to enhance their Internally Generated Revenue (IGR), establish Efficiency Units to reduce overhead costs, privatize State Owned Enterprises, domesticate Fiscal Responsibility Act, and put a limitation on further bank loans.

The Ministry said the Federal Government has agreed to develop International Public Sector Accounting Standards (IPSAS) compliant software for the states’ use. It is also developing new bond issuance guidelines to ease access to the capital market for states wishing to fund developmental projects.

Finance Minister Kemi Adeosun said the FSP “represents an important programme of reforms that will develop best practice financial management across all tiers of Government and will improve transparency and accountability.”

She spoke of government’s determination to attain financial discipline across government. “Overall we believe that the survival of State Governments is essential to the economic recovery of Nigeria, specifically their ability to meet salary obligations,” she added

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