From Laide Raheem, Abeokuta
The Ogun State government has called for a review of the terms and conditions for accessing counterpart funded projects by international donor agencies by states, arguing that the current arrangement was no longer in tune with current economic realities in the country.
The State Commissioner for Finance and Chief Economic Adviser, Dapo Okubadejo, made the call during a meeting with a team from the International Economic Relations Department (IERD), Federal Ministry of Finance, led by its Director, Hajia Aisha Omar, in his office in Abeokuta.
He argued that mandating participating states to provide a certain percentage of the counterpart fund as requirement for accessing loans or grants, as a demonstration of their commitment was no longer realistic. He added that most states were contending with numerous financial challenges, suggesting that donor agencies should collaborate with the Federal Ministry of Finance, to evaluate capacity of States seeking such loans or grants before approvals are granted.
Okubadejo also enjoined development partners to de-emphasize the use of level and rate of disbursement, instead of the impact rate of loans to partnering States as a yardstick for measuring their performance.
“Using counterpart funding as a way to determine commitment is no longer popular because resources are scarce. Most states are grappling with wage increase, COVID-19 pandemic, slowdown in economic activities and decrease in Internally Generated Revenue. All of these have put pressure on the funding capacity of State governments. We would love to do these projects, but because counterpart funding is put as a requirement, a lot of States will be slow in kick starting the projects.