"The targets for cost management and improved efficiency will deliver value for money and will yield long term savings. Overall we believe that the survival of State Governments is essential to the economic recovery of Nigeria, specifically their ability to meet salary obligations."
Already, the definition of Internally Generated Revenue (IGR) has been widened beyond taxes since there is no significant private sector in many states, as state governments will therefore, key into Public-Private Partnership arrangements to exploit local endowments.
Each state will develop its own plan to attain the targets and compliance will be independently monitored and where there is failure to meet the targets, funding will cease.
"The Objective of the Plan is for enhanced transparency and accountability. To attain this, all states must publish their financial statements, budgets and the quarterly budget performances. State finances will no longer be shrouded in secrecy. Items like security vote, feeding, and travel will be visible.
"Target limits for recurrent to capital expenditure will be set. Payroll will be cleaned up by the elimination of ghost workers from the system. The Efficiency Unit, which has been set up to further cut cost, together with the setting up internal audit, will further enhance the objective of the exercise.
"Each state must be made less reliant on FAAC allocation. Targets need to be set for improved IGR. Current database of taxpayers will be shared with FIRS. A review of obsolete revenue laws and tariffs must be achieved to checkmate the ineffectiveness of the past guidelines.
"The Plan will strengthen Public Financial Management by setting up an asset and liability register. It should consider some privatisations, especially of state owned enterprises and the domestication of the Fiscal Responsibility Act.
"The plan is managing Debt in a sustainable manner, obtain and maintain credit rating, restrict borrowing from commercial banks, revised and fast track access to the capital markets which are cheaper and more transparent. The Central Bank can then publish guide rates for municipal loans to prevent excessive charging," the source said.