The federal government has assured state governments that they will receive more than $1 billion in financial disbursements in the coming weeks.
The final tranche of the $1.5 billion World Bank grant to state governments is yet to be determined, while the second is the $1 billion Naira exchange deficit withheld by the Central Bank of Nigeria (CBN).
Mrs. Zainab Ahmed, Minister of Finance, Budget, and National Planning, made these remarks during a celebration of the SFTAS Programme’s achievements on the sidelines of the Nigeria Economic Summit Group’s 28th Nigeria Economic Summit (NESG).
The grant is part of the Fiscal Transparency, Accountability, and Sustainability (SFTAS) Programme for Results, which assists states in achieving fiscal transparency, accountability, and sustainability.
Because the SFTAS office in Abuja is conducting a review of the States’ performance in meeting the Disbursement Link Indicators, the amount to be released is still unknown (DLIs).
The Minister stated that this final disbursement will “bring to a close the Performance for Results Grant, even though the technical assistance component will continue to be delivered by implementing agencies and partners until June 2023, when the program will finally wind down.”
The $1 billion Naira exchange deficit, which will also be released to state governments, is “the exchange rate differential between the rate used to calculate the last disbursements and the actual rate,” according to an SFTAS official.
According to the official, “the CBN determines the exchange rate. There was a shortfall after the last disbursements, the state governments noticed the shortfall, and the SFTAS office wrote to the CBN for a refund.” That is what the CBN will soon release.”
So far, the SFTAS program has released N471.9 billion to state governments. When the final tranche is released, the World Bank’s $1.5 billion two-tier facility will have been fully disbursed.
The $1.5 billion is a World Bank loan to the Federal Government, which is then distributed as a grant to the states to encourage them to embrace and internalize the twin concepts of transparency and accountability.