The World Bank implemented a performance-based program in 2017 that required them to monitor and grade states’ budgetary performance.

With this, the World Bank and the Federal Government reached an agreement, which resulted in the creation of the State Fiscal Transparency, Accountability, and Sustainability (SFTAS) Program.

The rationale for the State Fiscal Transparency, Accountability, and Sustainability (SFTAS) Program is informed by the present severe fiscal challenges faced by states, with many being unable to pay backlogs of several months in salary arrears due to poor fiscal governance caused by high cost of governance, profligacy, and low revenue drive, among other factors.

With the exception of a few states, most have poor fiscal transparency and accountability structures, with unpublished budgets and financial statements, a lack of timely budget implementation reports, high budget deviation (between 30% and 55%), and citizens who are never involved in the budget process. State executives think they are not accountable to residents and hence do not require their input in significant policy decisions, particularly budget processes, in which everyone is kept in the dark.

This program was the World Bank’s strategy for rating the fiscal governance of all 36 Nigerian states in order to encourage fiscal transparency and integrity by awarding grants and/or technical assistance to those states.

States that meet the ranking requirements will be awarded a performance-based grant under the ‘Program for Result’ (PforR), while those who do not will be penalized.

The 36 states and the FCT are allowed to participate in the PforR component. States must, however, meet the Eligibility Criteria (EC) for the performance year in order to be eligible for the yearly performance-based grants. The program provides for several entry points depending on whatever state you are in. States that do not meet the EC in Year 1 will not be eligible for performance-based grants in Year 2 or 3, but they can join the Program in Year 2 or 3.

The Eligibility Criteria (EC) are: States must disclose annual approved state budgets and annual audited financial accounts in a timely manner for each year of the Program. States are also required to align with international best practices in years 3 and 4 of the Program by (1) using the national chart of accounts/budget classification system, which is GFS compliant, to prepare their annual budgets and thus foster budget classification comparability across the federation; and (2) preparing their audited financial statements in accordance with International Public Sector Accounting Standards (IPSAS).

The following are the performance year:

1st Year: 1st Jan 2018 – 1st Jan 2019.

2nd Year: 1st Jan 2019 -1st Jan 2020.

3rd Year: Jan 1, 2020 – Jan 1, 2021.

4th Year: Jan 1, 2021 – Jan 1, 2022.

States that meet the Performance, Eligibility Criteria for a given year will be awarded a grant of $2 million and will thus be eligible for the following year, whilst states that do not meet the criteria for a given year can reapply to join the program the following year.

Imo State did not meet the criteria in the 2018-2019 year of Performance Eligibility Criteria review and hence was not eligible for the grant.

Imo State, however, has met all of the performance requirements for Fiscal Performance in Governance from 2019 to 2021 and has twice won a grant of $2 million.

This WORLD BANK Ratings exposes Uzodinma’s government’s fiscal performance in governance and also reveals the level of Transparency, Integrity, and Prudence with which Hope Uzodimma manages the state’s resources, thereby increasing the state’s internal revenue base. It’s no surprise that IGR is expected to account for 75% of Imo State’s budget in 2022.