FG lists 22 conditions for states to access N90billion loan

FG lists 22 conditions for states to access  N90billion loan
June 16 05:55 2016

The Federal Government has spelt
out 22 stringent conditions
states must fulfill to enable them benefit from the N90 billion loan set aside for states facing financial difficulties.

The Minister of Finance, Kemi Adeosun, had on Tuesday said the loan will cover a period of one year and will be extended to the state governments after they meet 22 stringent conditions put together under the fiscal sustainability plan.

Speaking to journalists after a meeting with state’s commissioners of finance, the minister said the loan is in two tranches of 50 billion Naira for three months and 40 billion Naira for nine months.

Majority of the states have struggled to meet their financial obligations despite a July 2015
Central Bank of Nigeria-packaged
special intervention fund that
doled out between N250 to N300
billion in the form of soft loans to
enable the states pay backlog of
salaries.

The states also enjoyed a debt
relief programme designed by the
Debt Management Office (DMO)
which helped them to restructure
their commercial loans of over
N660 billion, extending the life span
of the loans while reducing the
states’ debt-servicing
expenditures.

To access the new N90 billion loan facility, the  Special Adviser on Political Matters to President Muhammadu Buhari, Babafemi Ojudu listed the 22 conditions on his Facebook page on Wednesday.

They 22 conditions

  1. Publish audited annual financial statements
within 9 months of financial year end.
  2. Introduction and compliance with the
International Public Sector Accounting
Standards (IPSAS). Publish State budget online annually.
  3. Publish budget implementation
performance report online quarterly.
  4. Develop standard IPSAS compliant software
to be offered to States for use by State and
Local Governments.
  5. Set realistic and achievable targets to
improve independently generated revenue
(from all revenue generating activities of the
State in addition to tax collections) and ratio
of capital to recurrent expenditure.
  6. Implementation of targets Implement a
centralized Treasury Single Account (TSA) in
each State.
  7. Quarterly financial reconciliation meetings
between Federal and State Governments to
cover VAT, PAYE remittances, refunds on
Government projects, Paris Club and other
accounts.
  8. Share the database of companies within
each State with the Federal Inland Revenue
Service (FIRS). The objective is to improve
VAT and PAYE collection.
  9. Introduce a system to allow for the
immediate issue of VAT / WHT certificates on
payment of invoices.
  10. Review all revenue related laws and
update of obsolete rates / tariffs. Set limits on personnel expenditure as a share
of total budgeted expenditure.
  11. Biometric capture of all States’ Civil
Servants will be carried out to eliminate
payroll fraud.
  12. Establishment of Efficiency Unit.
Federal Government online price guide to be
made available for use by States.
  13. Introduce a system of Continuous Audit
(internal audit).
  14. Create a fixed asset and liability register.
  15. Consider privatization or concession of
suitable State owned enterprises to improve
efficiency and management.
  16. Establish a Capital Development Fund to
ring-fence capital receipts and adopt
accounting policies to ensure that capital
receipts are strictly applied to capital projects.
  17. Domestication of the Fiscal Responsibility
Act (FRA).
  18. Attainment and maintenance of a credit
rating by each State of the Federation.
  19. Federal Government to encourage States to
access funds from the capital markets for
bankable projects through issuance of fast-
track Municipal bond guidelines to support
smaller issuances and shorter tenures.
  20. Full compliance with the FRA and
reporting obligations, including;
  21. No commercial bank loans to be
undertaken by States;
  22. Routine submission of updated debt
profile report to the DMO