Tuesday, July 7, 2015

Pres. Buhari Approves N804.7 Billion Economic Bailout for States Owing Salaries

President Muhammadu Buhari has approved the sum of N804.7 billion to assist states who have been unable to pay salaries to do so.
The amount is meant to also cover sharing of fresh allocations, granting of soft loans and restructuring of states’ debt-servicing payments, Vanguard reports.
Sources say the money is to be disbursed this week.
The report further states:
The packages are:
About $2.1b (N413.7bn) will be shared in fresh allocation between the states and the federal government. The money is sourced from recent Liquefied Natural Gas (LNG) proceeds to the federation account.

A Central Bank of Nigeria (CBN)-packaged special intervention fund that will offer financing to the states, ranging from between N250bn and N300bn. This would be a soft loan that states could access to pay the backlog of salaries.
Implementing a debt relief programme proposed by the Debt Management Office, DMO, which will help states restructure their commercial loans currently put at more than N660bn, and extend the life span of such loans while reducing their debt-servicing expenditures.
Also, a total of N391 billion from the Excess Crude Account, ECA, will be shared among the three tiers of government, the Accountant-General of the Federation, Ahmed Idris, disclosed yesterday.
With the N413.7 billion LNG proceeds it means the three tiers of government will share a total of N804.7 billion.
By extending the commercial loans of the states, according to the third package, more funds would be made available to the state governments, which otherwise would have been claimed at source by the banks.
Vanguard gathered that the Federal Government has agreed to use its influence to guarantee the elongation of the loans for the benefit of the states.
Sources explained that this package, which was considered at the National Economic Council, NEC, last week, is designed specifically for workers, adding that President Buhari reviewed and approved the package in his bid to intervene and alleviate the sufferings of workers, some of whom have not been paid for over 10 months.
Currently, 12 of the 36 states of the federation are owing their workers more than N110 billion. The most affected states are Osun, Rivers, Oyo, Ekiti, Kwara, Kogi, Ondo, Plateau, Benue, and Bauchi.

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