According to reports, the decision was taken in line with the Fiscal Sustainability Plan, FSP, which has been agreed to by the Federal Government’s economic team and State Governors.
This new development is coming at a time the Central Bank of Nigeria, CBN, is expected to announce details of the much anticipated flexible foreign exchange rate policy.
Sources from the Ministry of Finance, hinted that President Buhari was disappointed at the manner
some past and current Governors took loans from banks and misapplied such funds, while mortgaging their States finances.
Currently, some States are left with too little to meet even their recurrent obligations, after deductions are made from their monthly federation account allocations.
Following this, the Federal Government has asked States to source funds from the capital market for their infrastructure development.
It also, insisted that funds sourced through bonds must not only be on bankable, measurable projects, but must also be released in tranches.
Vanguard, gathered that the release of the proceeds of bond issuing, will henceforth, be on the basis of satisfactory utilization of earlier released proceeds.
The FSP aims to improve accountability and transparency; increase public revenue; rationalize public expenditure; improve public financial management and sustainable debt management.
Specific action points of the reform include; biometric capture of all civil servants; establishment of an efficiency unit in each state, implementation of continuous audit, improvement in Internally Generated Revenue, IGR, and measures to achieve sustainable debt management.
States that meet the above FSP conditions, can access a new N50 billion facility to be granted by the Federal Government.
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