N614bn Bailout: Governors give condition for loan repayment

Nigeria governors have demanded a reconciliation of accounts before repaying the N614 billion bailout fund the federal government granted states.

The governors want the bailout support to be reconciled with debts that the federal government allegedly owes states. Many of such debts involve amounts used to repair federal roads by state governments.
The governors made the demand at the end of a meeting of the Nigerian Governors Forum held late Wednesday in Abuja.
The federal government gave the conditional budget support facility to 35 states through the Central Bank of Nigeria (CBN) in 2017.
The loans granted to enable states to meet their financial obligations to civil servants and pensioners were provided at a nine per cent interest rate, with a grace period of two years.
With the expiration of the grace period last week, the federal government announced that it will in the next two weeks commence the deduction from statutory allocations to the states.
As the lobby appeared to have failed, the governors agreed to make the refund on a condition.
At Wednesday’s NGF meeting, the Chairman of the forum, Governor Kayode Fayemi of Ekiti State, said governors will repay the loans only after proper reconciliation of the accounts.
“If you borrow, you pay. Governors have never been averse to payment of loans that we took under legal environment and we don’t want a situation that our banking system and financial system will be in any jeopardy.
“However, governors believe that just as we are ready to pay, we also have a duty to ensure reconciliation of account as far as money owed to states may be concerned. That is the process that is ongoing,” Mr Fayemi noted.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, had at the Public Consultation Forum on the Draft 2020-2022 Medium Term Expenditure Framework in Abuja last week said the repayment will be taken from the affected states’ allocations during the next Federation Accounts Allocation Committee (FAAC) meeting later this month.
She said the refund is not going to be treated as revenue to be used to fund the 2020 budget.
It was a credit that was advanced by the Central Bank of Nigeria to the states, the minister said.
“We will deduct direct at source and remit to the CBN,” she noted.
Reading a communiqué issued after the over three hours meeting of the governors, Mr Fayemi said the governors will continue to collaborate with journalists, especially on the issues of security as they work in hostile environments.
He said the forum received a presentation from the Nigeria Meteorological Agency advising that the country should expect above average rainfall which had already resulted in severe flooding in several states.
The forum also listened to a presentation by the Transmission Company of Nigeria, which highlighted the issues around inadequate transmission and sought the governors’ commitment to improving the power situation in the country.
The Forum resolved to partner TCN to improve power supply nationwide.

Source: premiumtimesng

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