By David Akinmola
Twenty Nigerian states are set to receive about $27 million in performance-based grants from the World Bank under an incentive-driven programme designed to strengthen fiscal transparency, improve public financial management and deepen accountability in subnational governance.
The funding, which will be disbursed based on the states’ performance against agreed reform benchmarks, is expected to reward improvements in budget credibility, revenue mobilisation, procurement transparency, debt management and public expenditure efficiency.
The performance-based financing initiative forms part of ongoing efforts by the Federal Government and the World Bank to encourage states to implement critical governance reforms while enhancing service delivery and creating a more sustainable fiscal environment.
The grant is expected to provide additional fiscal support to beneficiary states at a time many subnational governments are grappling with rising expenditure pressures, infrastructure deficits and growing demand for improved public services despite increased allocations from the Federation Account.
According to officials familiar with the programme, only states that met the stipulated performance indicators during the assessment period qualified for the grants, underscoring the growing emphasis on results-based financing in Nigeria’s public sector reform agenda.
Analysts noted that the incentive mechanism has become an effective tool for encouraging healthy competition among state governments, while promoting prudent fiscal management and institutional reforms.
They added that tying development financing to measurable governance outcomes could help improve the efficiency of public spending, reduce wastage and enhance citizens’ confidence in state institutions.
Economic experts also argued that performance-based grants have become increasingly important as states seek to diversify internally generated revenue and reduce dependence on federally distributed revenues amid persistent macroeconomic challenges.
The World Bank has continued to support Nigeria’s fiscal reform programmes through several initiatives aimed at strengthening governance, improving public financial management systems and boosting transparency across federal and state institutions.
The latest disbursement is expected to reinforce ongoing reforms while encouraging more states to meet governance and fiscal performance standards required to access future funding under the programme.
Stakeholders believe sustained implementation of performance-based financing could accelerate institutional reforms, improve budget execution and ultimately enhance the quality of public services delivered to Nigerians at the subnational level.
