Business
Again, FG plans bailout for states, but…
In what would turn out to be a third financial bailout, the Federal Government, on Saturday said it is finalizing a conditional Budget Support Facility for state governments.
The facility is to provide financial relief to State Governments based on the states meeting a set of stringent fiscal conditions.
This according to the Mnistry of Finance, is aimed at providing support to the states to help them overcome their financial challenges.
It would be recalled that workers in a number of states have embarked on strike action over unpaid salaries with the governors claiming there are no funds to offset the debts.
Read also: 2016 budget: FG cuts capital vote by 50%
The Ministry of Finance said in a statement that the states would only be able to access the facility if they meet a stringent 22-point reform agenda called the Fiscal Sustainability Plan (FSP), that was approved by state governments at the National Executive Council, last month.
According to the Finance Ministry, the FSP encompasses a framework of reform measures including the requirement for the states to publish audited financial statements and budgets, biometric and Bank Verification Number (BVN) payroll review exercises to sanitise payroll costs, as well as limits on recurrent expenditure levels.
Other reforms, the Ministry said, will require states to set and meet targets to enhance Internally Generated Revenue (IGR), the establishment of Efficiency Units to reduce overhead costs, privatisation of State Owned Enterprises, domestication of the Fiscal Responsibility Act and limitations on securing further bank loans.
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