Minister of Finance, Kemi Adeosun
Ifeanyi Onuba
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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