The Federal Government on Thursday explained why the N1.1bn Budget Support Facility for Ekiti State for the month of January was withheld.
This is contained in a statement issued by the Director of Information, Federal Ministry of Finance, Mr Salisu Dambatta.
Ekiti State Governor, Ayodele Fayose, had alleged that the ministry deliberately withheld the state allocation.
But the statement said Ekiti state failed to comply with the conditions to get the facility which is a loan by the Federal Government to the states to cushion the impact of revenue shortfall from the federation account.
The statement said the ministry had written to the state government in August last year drawing its attention to the need to comply with the terms of the loans and that the state would be stopped from accessing the facility due to non-compliance
It reads in part, “A claim by the Governor of Ekiti State, Mr Ayodele Fayose, that the Federal Ministry of Finance has withheld statutory allocation due to Ekiti State has been brought to the attention of the Ministry of Finance.
“The ministry categorically denies and states the claim as incorrect as the ministry has not withheld any statutory allocation due to Ekiti State, or any other State in the country.
“The fact is that the Ekiti State Government failed to comply with the necessary requirements for participating in the Budget Support Facility, which is a Conditional Loan Programme to State Governments introduced with the view to enhancing fiscal prudence and designed particularly to enhance transparency, efficiency in public expenditure and payment of salaries.
“This is not the first time of non-compliance by the Ekiti State Government. His administration defaulted in meeting the conditions specified and agreed upon by the 35 State Governments that are participating in the programme as contained in the Fiscal Sustainability Plan and the Ekiti State Government was warned formally of its failure to comply with the full requirements vide a letter on August 5, 2016, with reference number HMF/FMF/ASG/1/2016.”
It added, “The failure of Ekiti State Government to comply with the requirements and conditions for the Budget Support Facility resulted in a letter sent to the Chief of Staff to notify him of the suspension of BSF for Ekiti State and it was conveyed to Mr President before payment to the Ekiti State Government was reinstated.
“The Ekiti State Government and all the other participating States are aware of the consequence of failure to comply with the full conditions and it is not the first time that a State would be stopped from accessing the facility due to non-compliance.”
The statement said while the finance ministry in the course of its normal duties has the right to query, suspend or withhold funds as part of the conditions of the Budget Support Facility, it was for the Commissioner of Finance of any State or the Governor having issues to contact the Federal Ministry of Finance and resolve the issues without resorting to the media.
This, it added, was imperative because such issues are of a financial nature and therefore, confidential.
“The Federal Ministry of Finance wishes to restate very strongly that the Budget Support Facility is a conditional programme and the Federal Government would not be intimidated or threatened in the discharge of its duties.
“There is a total of 22 conditions contained in the FSP. Some of them are that a restriction would be placed on states borrowing from commercial banks; all states must publish their financial statements, budgets and the quarterly budget performance; states’ finances would no longer be shrouded in secrecy and items like security vote, feeding, travel among others would be made visible.
“Others are that states would review obsolete revenue laws and tariffs, and redefine Internally Generated Revenue to include non-tax revenue sources that would reflect local opportunities in each state, especially in solid minerals.
“In the same vein, the states were directed to set target limits for recurrent to capital expenditure; set target for personnel costs as a percentage of the total budget; clean up their payroll by eliminating ghost workers as well as set up Efficiency Unit to reduce the cost of governance”, it stated.
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