By Oscarline Onwuemenyi
The Federal Government said on Wednesday that it has approved the second phase of the State Governance and Capacity Building project, which would be assisted by the World Bank to the tune ofÂ $18 million. This is even as the World Ba
nk has alleged that the absence of key fiscal responsibility and public procurement laws in some states has hampered the progress of the first phase of the project, which began in October 2005, in Bauchi, Cross River and Kaduna states.
The Director of International Economic Relations in the Ministry of Finance, Dr. Biodun Alao, who disclosed this during the SGCBP Review Workshop, in Abuja , noted that issues of governance, accountability and transparency were â€œplanks for achieving sustainable development in the country.â€
According to him, the objective of the $18.1 million World Bank-assisted project was to enhance good governance by way of promoting accountability and transparency in the utilization of public funds and human resources.
He said, â€œConsidering the fact that over 50 per cent of the nationâ€™s resources are being allocated to states and local governments, it is important that fiscal reforms undertaken at the Federal level are replicated at the sub-national government levels.â€ Alao added that consequent upon request made by participating states, and in line with the Public Financial Reforms of government, the ministry and World Bank carried out a restructuring of the project with a revised objective of strengthening capacity of participating states for multi-year fiscal planning, expenditure and budgeting, timely auditing and reports, effective and transparent public request and payment control.
â€œThis culminated in the reallocation of the proceeds of the credit from one category to another as recommended by the states. The Development Credit Agreement was subsequently amended and signed in January 2008, to give legal effect to the restructuring exercise,â€ he said.
The components of the SGCBP, according to him, include public finance legislation, budget preparation, external audit, public procurement reform, budget and treasury management information system (BATMIS), and human resource management and staff training enhancement.
Alao noted, however, that despite the fact that project implementation had been strengthened after the restructuring, disbursement was still slow relative to the project closing date of March 2010, as less than 40 per cent of the credit amount had been disbursed.
On his own part, the World Bank Country Director, Mr. Onno Ruhl, who was represented by the SGCBP Task team Leader, Mr. George Lami, noted that the states to enjoy the programme would be chosen through a competitive selection process. He explained that the project was â€œdesigned to align with the objectives of the National Economic Empowerment and Development Strategies and its state variant, and aims to support states in strategic projects development.â€
According to him, the absence of leadership and commitment in driving reforms, weakness in fiduciary performance and irregular reporting (auditing) have hampered progress of the project in participating states.The World Bank chief warned that states â€œrisk slipping back to a problem project if efforts are not taking to improve areas of challenge, especially with regards to passage of key laws that deal with fiscal responsibility, public procurement and audit.â€
Ruhl also said that the request for more funding by participating states, would be considered depending on their performance on the projects within the next six to nine months, even as he pointed out that request for the reallocation of funds and for the extension of closing date to March 2011 were being considered.