FG reaffirms commitment to fiscal reforms

The Federal Government of Nigeria has reaffirmed its commitment to improve fiscal reforms at the subnational level by working assiduously to sustain collaboration with the States and International Development Partners.

 This would be achieved through programs such as the World Bank-assisted States Fiscal Transparency, Accountability and Sustainability (SFTAS) Program which has brought a great deal of reforms that helped to strengthen State Governments’ approach to governance and public finance management.

This affirmation was given by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, at the opening of a Four-day retreat with the theme “Creating a Resilient Economy through Diversification of the Nation’s Revenue’’ organised by the Federation Account Allocation Committee (FAAC) in Asaba, Delta State.

 The FAAC is a statutory Committee Chaired by the Minister of Finance and Coordinating Minister of the Economy with the Accountant-General of the Federation (AGF), Commissioners of Finance of the 36 States of the Federation, representatives of the Revenue Mobilisation, Allocation and Fiscal Commission (FMAFC) and Revenue Generating Agencies (RGAs) amongst others as members.

 Mr. Edun, who was represented by the Permanent Secretary, Special Duties (PSSD) in the Ministry, Mr. Okokon Udo, observed that the $1.5bn SFTAS Program-for-Results, which ends in December 2023 has come of age with remarkable achievements recorded by all the 36 States in key result areas namely: Fiscal transparency and accountability; Domestic revenue Mobilisation; Efficiency of public expenditures and Debt sustainability.

“We hope and encourage the Sub-nationals to continue with these laudable reforms beyond the SFTAS period”.

To this end, he stressed that the Federal Government as always, remains committed to the fiscal and monetary reforms that the administration has started, which aimed to provide an enabling business environment, diversify the revenue base of the economy, create fiscal space for investment in critical infrastructure and ensure macroeconomic stability.

“Together, we shall collectively build a resilient economy for Nigeria”.

The Minister of Finance and Coordinating Minister of the Economy revealed that following the success story of SFTAS, the Federal Government in collaboration with the World Bank has come up with another programme called “State Action on Business Enabling Reforms (SABER)” which will effectively run from the year 2023 to 2025.

“This program aims at improving the business enabling environment of Nigeria’s states. Other intervention programmes from the World Bank and other International Organisations would continue unabated”.

According to him, the $750m SABER Program, which is currently awaiting the approval of an abridged External Borrowing Plan by the National Assembly, seeks to incentivise and strengthen the implementation of business enabling reforms covering land administration.

It also includes the regulatory framework for private investment in fiber optic infrastructure, public private partnership and investment promotion frameworks, tax administration and the business enabling regulatory environment.

Speaking in the same vein, the World Bank Senior Economist, Mr. Samer Matta, congratulated the Federal and States Governments for the important fiscal reforms initiated under the States Fiscal Transparency, Accountability and Sustainability (SFTAS) Program calling for the sustainability of results especially by new administrations in the States through adhering to the SFTAS Charter signed by Governors in August 2022, committing to continued achievement.

 Mr. Matta attributed the success of the SFTAS program to the following:

Deployment of simple but substantive eligibility criteria annually to open the Program to all States for participation in any year but ensure that there is a minimum performance standard for receiving grants;

Making Technical Assistance available irrespective of meeting Eligibility Criteria and level of achievement of Disbursement Linked Results;

Robust and credible results verification process; Use of performance- based criteria that is non-negotiable and consistently applied.

Transparency of results encouraging virtuous peer competition; Active peer learning among States facilitated by the NGF; and Utilization of state-level platforms for engagement at multiple political and technical levels.

He further highlighted that the implementation of SFTAS reforms has enhanced the perception of states as having sound fiscal practices, a key factor for capital markets.

This improvement is bolstered by the availability of more comprehensive and improved fiscal data, facilitating a more informed, evidence-based dialogue.

 Ms. Bertine Kamphuis, World Bank, Task Team Leader for SABER also expressed optimism that the SFTAS ideals will be sustained even in the absence of further incentives given the fact that SABER is a natural component of the sustainability strategy as it will continue to use two SFTAS Eligibility Criteria:

The timely publication of National Chart of Account compliant budgets, and the timely publication of IPSAS-compliant audited financial statements, as well as elevate the SFTAS result on the timely publication of a debt sustainability report to an eligibility criteria.

VON