Minister of Finance, Mrs Kemi Adeosun, has clarified that the proposed loan guaranteed by the Federal Government to states is a total of N510 billion and not N90 billion as earlier reported.
Adeosun, who spoke during a television interview programme on Monday, also disclosed that N109 billion had already been released as part of the N350 billion first quarter capital vote.
Speaking on the loans facility to which stringent conditions had been attached, the minister said: “Facility size is not N90 billion; rather N 50 billion per month first three months and N40 billion per month for following nine months.
“Monthly disbursements to each state will be conditional on compliance with pre-agreed Fiscal Sustainability Plan (FSP) milestones.”
She said 35 states had applied as against erroneous claims in some newspapers that “only seven or five states have met Federal Government’s conditions.
This is factually wrong. FSP reforms will take 18 months to fully implement” and are in the process of submitting the required documentation, which are being reviewed.
Adeosun gave the assurance that diversification of the economy would increase when each state starts to increase their Internally Generated Revenue (IGR), as it would create local jobs and expand wealth within the states.
“Kebbi State, for example, had taken the initiative to increase their production of rice, it had gone as far as coining IGR as ‘I Grow Rice’.
“Basically, Kebbi State is undertaking large scale rice. growing, with the aim of producing one million out of the six million tonnes of rice Nigeria consumes annually.
Ultimately, when we collectively expand IGR, we generate more jobs and create more wealth.
Other states have different resources that can be developed to generate IGR within the state,” she stated.
According to Adeosun, the economic blueprint was about putting in place the financial pillars to enable states to work effectively and to work effectively with the Federal Government, including as recipients of infrastructure investment and added “getting this. right will enable states to be critical economic drivers for prosperity and pillars of professional probity.”
Elaborating on the FSP, Adeosun said the objectives included to improve accountability and transparency; to increase public revenue; to rationalise public expenditure; to improve public financial management and enhance sustainable debt management.
She said: “The objective is to ensure that states are set on a path towards fiscal sustainability with a clear link between Federal Government funding and necessary reform. Monthly disbursements to each state will be conditional on compliance with pre- agreed FSP milestones.
“FSP reforms will take 18 months to fully implement, but there are key milestones within the period to measure compliance. The states have agreed and endorsed this approach. It is also a path to supporting and increasing productivity and diversification of states economies, such as in agriculture increasing food security and opportunities for exports.”
On the N 350 billion disbursement planned for this quarter, Adeosun said “N109 billion out of the N350 billion has already been disbursed.”
Insisting the N350 billion meant to fund the first quarter release was ready “however, there are procedural delays, due to the required public procurement processes.
“The selection process, however, allows for
many new capable companies to participate in the process and getting involved in the FG projects.”