The Federal Government has begun the
disbursement of the first tranche of the N90bn conditional loan facility to
some of the 35 states that have so far applied for the loan.
The Minister of Finance, Mrs Kemi Adeosun,
had on June 14, while announcing the N90bn conditional loan facility to states,
said the funds had been secured from the private sector to state governments
through the issuance of bonds in the bond market.
She had during a meeting with
commissioners of finance from the 36 states of the federation said the loan
would be given within a one year period.
The minister had explained that
based on the agreement with the governors of the states and the commissioners
of finance, N50bn would be released within the first three months where each of
the 36 states would get about N1.3bn.
Thereafter, she noted that N40bn
would be released over a nine-month period as the second tranche through the
bond market where each state would received the sum of N1.1bn.
Investigations by our correspondent
on Saturday in Abuja showed that the ministry of finance had commenced the
disbursement from the first tranche of N50bn to some of the 35 states that
applied.
It was gathered that Lagos State
opted out from accessing the loan and as such did not send in any application.
A top government official, who spoke
in confidence, told our correspondent that the precarious situation that most
of the states found themselves which had made it impossible for them to pay
workers’ salaries made the ministry of finance to start releasing the funds at
the end of June.
The official said, “The disbursement
of the budget support facility to states has started. Disbursement started in
June and has been made to some of the 35 states that applied. Only one state
which is Lagos State did not apply for the loan.
“Why we started in June was because
of the precarious situation in which many of the states found themselves. There
have been complaints about non-payment of salaries and there is no way we can
just sit back and watch while workers continue to suffer.
“We have started monitoring the
states based on the milestones that they are to achieve before further
disbursements would be made. You know that there were conditions that were
given to them before they could get more money.
“As soon as any state meets its
threshold, that state would get additional funding but any state that fails to
meet up with its agreed milestone will not get further disbursement.”
When contacted, the Media Adviser to
the Minister of Finance, Mr Festus Akanbi, confirmed that the disbursement of
the loan to the states had started.
He, however, said while 35 states
applied for the loan, the ministry had commenced the disbursement to only some
of them.
He, however, could not provide the
number of states that have so far been given the loan.
He said, “35 states applied for the
loan and disbursement commenced in June but I don’t have the total number of
the states that have benefitted now.”
Some of the conditions attached to
the loans are that a restriction would be placed on states borrowing from
commercial banks; that all states must publish their financial statements,
budgets and the quarterly budget performance; that states’ finances would no
longer be shrouded in secrecy and items like security vote, feeding, travel
among others would be made visible.
Other conditions are that states
would review obsolete revenue laws and tariffs; and redefine Internally
Generated Revenue to include non-tax revenue sources that will reflect local opportunities
in each state especially in solid minerals.
In the same vein, the states have
been directed to set target limits for recurrent to capital expenditure; set
target for personnel costs as percentage of total budget; clean up their
payroll by eliminating ghost workers as well as set up Efficiency Unit to
reduce cost of governance.
Akanbi had last week told our
correspondent that disbursement would not be made to any state in any month
that the Federation Account Allocation Committee distributes over N500bn among
the three tiers of government.
He had said once the monthly
distributable revenue is up to the threshold of N500bn, the amount that would
be available to each state government in that month would be enough to run its
programme.
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