The federal government has disclosed that it plans to provide financial relief to state governments if the states meet some stringent fiscal conditions.
According to a statement released by the finance ministry, a conditional Budget Support Facility was being put in place to this effect.
State governments would be able to access the facility if they meet a 22-point reform agenda known as the Fiscal Sustainability Plan, FSP, which was approved at the National Executive Council meeting last in May.
The FSP is a framework of reform measures which includes a requirement for states to publish audited financial statements and budgets, biometric and Bank Verification Number payroll review exercises to sanitise payroll costs, as well as limits on recurrent expenditure levels.
The FSP also requires that states be able to set and meet targets to improve their Internally Generated Revenue, IGR. Other requirements contained in the FSP include, the establishment of efficiency units to bring down overhead costs, Privatisation of state-owned enterprises, domestication of the Fiscal Responsibility Act and limitations on securing bank loans.
The federal government agreed to develop an International Public Sector Accounting Standards, IPSAS, compliant software for states to use.
The Ministry of Finance said the relief funds will be disbursed to states that meet their agreed targets and will be subject to monitoring and evaluation by independent monitoring agents.