Sustain SFTAS Reforms – World Bank Urges FG, States
As $750m SABER Programme awaits NASS’ approval
BY COBHAM NSA – The World Bank has tasked the Federal and State Governments with sustaining the fiscal reforms so far achieved through the Bank-assisted States Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme for Nigeria’s overall economic growth and development
The Bank threw the challenge at a Four-day retreat organized by the Federation Account Allocation Committee (FAAC) in Asaba, the Delta State capital with the “Creating a Resilient Economy through Diversification of the Nation’s Revenue’’.
As a statutory Committee chaired by the Finance Minister and Coordinating Minister of the Economy, FAAC has the Accountant-General of the Federation, Commissioners of Finance of the 36 States, the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC)’s representative, and Revenue Generating Agencies (RGAs) among others as members.
Specifically focusing attention on new administrations in the States, the World Bank said only strict adherence to the SFTAS Charter signed by Governors in August 2022, committing to continued achievement under the programme would be good enough for Nigeria going forward
The World Bank Senior Economist, Mr. Samer Matta, spoke as the Federal Government pledged its commitment to ensure improved fiscal reforms at the subnational level working assiduously on sustained partnership with the States and International Development Partners to strengthen governments’ approach to governance and public finance management.
Matta, who saluted the Federal and State Governments on the key fiscal reforms initiated under the SFTAS Programme, attributed its success to the 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.
Other contributory factors listed include: 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 are 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 an engagement at multiple political and technical levels.
Further highlighting that the SFTAS reforms’ implementation has enhanced the perception of states as having sound fiscal practices, a key factor for capital markets investments, Matta noted that; “This improvement is bolstered by the availability of more comprehensive and improved fiscal data, facilitating a more informed, evidence-based dialogue.”
Speaking at the retreat, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, assured that there would be no room for the Federal and State Governments to derail and lose out on the visible benefits already derived from the programme.
Represented by the Permanent Secretary, Special Duties (PSSD) in the Ministry, Mr. Okokon Udo, the Minister said the $1.5 billion 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.
He said these include: Fiscal transparency and accountability; Domestic revenue mobilization; and Efficiency of public expenditures and Debt sustainability, adding; “We hope and encourage the Sub-nationals to continue with these laudable reforms beyond the SFTAS period”.
Mr Edun further said the Federal Government, as always, remains committed to the fiscal and monetary reforms that the administration has started, explaining that the current policy readjustments aim 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.
Pledging that “Together, we shall collectively build a resilient economy for Nigeria”, the Minister said 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”, he said
Currently awaiting the approval of an abridged External Borrowing Plan by the National Assembly, the Finance Minister hinted that the $750 million SABER Program seeks to incentivize and strengthen the implementation of business-enabling reforms covering land administration, 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.
In his intervention, World Bank, Task Team Leader for SABER, Ms. Bertine Kamphuis, expressed confidence 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.
These are the timely publication of the National Chart of Account-compliant budgets, and the timely publication of IPSAS-compliant audited financial statements, as well as elevating the SFTAS result on the timely publication of a debt sustainability report to eligibility criteria.
