COVID-19: 35 States Share $175m from $750m World Bank Loan

World Bank

By Modupe Gbadeyanka

Thirty-five of the 36 states of the federation have received a total of N66.5 billion ($175 million) from the federal government, with $5 million given to each of them.

A statement signed by the Director of Press and Public Relations at the Ministry of Finance, Mr Hassan Dodo, disclosed that the money was disbursed to the states on the basis of the amended COVID-19 Responsive 2020 Budget results achievement.

The disbursement is, according to her, under the performance-based grant component of the World Bank-Assisted States Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme-for-Results.

Only Rivers State missed out on the grant due to its inability to meet the eligibility criteria which required the states to have passed and published online on a state’s website by July 31, 2020, credible, fiscally responsible COVID-19 Responsive Amended 2020 Budgets duly approved by the State House of Assembly and assented to by the State Governor.

The statement stated that the programme is wholly-financed with a loan amount of $750 million from the International Development Association (IDA), a member of the World Bank Group.

“It must also significantly lower the gross statutory revenue projections – consistent with the revised medium-term expenditure framework (MTEF) and federal government’s budget; reduced non-essential overhead and capital expenditures.

“The budget must be tagged and found to have allocated at least 10 per cent of the total expenditure of the amended budget for COVID-19 relief, restructuring and recovery programs; and identified credible sources to fully finance the budget deficit to avoid an accumulation of arrears,” the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, was quoted as saying.

The Minister noted that the COVID-19 pandemic and the associated economic and fiscal shocks have put significant pressure on states’ fiscal resources and undermined the reality and credibility of the states’ original 2020 annual budgets.

She was of the opinion that a transparent, accountable and sustainable state-level fiscal/budget framework is a pre-requisite for a robust COVID-19 response, enabling necessary health, social protection and livelihood interventions during the COVID-19 relief, restructuring and recovery phases.

Mrs Ahmed expressed optimism that the achievement of results by the 35 out of 36 states would further strengthen the national fiscal response to COVID-19 and align efforts at both the federal and state-levels, noting that the World Bank-assisted SFTAS Programme is principally meant to strengthen fiscal management at the state level, so as to ensure effective mobilisation and utilisation of financial resources to the benefit of the citizens in a transparent, accountable and sustainable manner, thereby reducing fiscal risks and encouraging a common set of fiscal behaviours.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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