Buhari Orders Additional N713.7b Bailout For States

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President Muhammadu Buhari has
approved an additional financial
intervention for states as part of a three-
pronged relief package that will help make
the states liquid in order to pay wages,
local newspapers reported on Monday.
The additional bailout figure has been put
at about N713.7 billion.

The bailout is in addition to all of the $1.7
billion (N391 billion) left in the Excess
Crude Account (ECA), which the
Accountant General of the Federation told
state house correspondents on Monday
will be split amongst the three tiers of
government.

At least 12 of the 36 states owe several
months of unpaid wages to workers with
Osun, Kwara, Benue, Ekiti, Kogi and Rivers
topping the list.

Some federal government workers have
also not been paid their entitlements in
months.

The three-pronged relief package will
include;
* The sharing of about $2.1billion
(N413.7billion) in fresh allocation between
the states and the federal government.
The money is sourced from recent LNG
proceeds to the federation account, and
its release okayed by the President.

*A Central Bank-packaged special
intervention fund that will offer financing
to the states, ranging from between
N250bIllion to N300billion. This would be a
soft loan available to states to access for
the purposes of paying backlog of salaries.

*A debt relief program proposed by the
Debt Management Office, DMO, which will
help states restructure their commercial
loans currently put at over N660billion, and
extend the life span of such loans while
reducing their debt-servicing expenditures.

From the N713.7 billion approved by the
President, according to Presidential Villa
sources, the reports said, N413.7 billion
will be a special intervention fund, while
the remainder will be a soft loan to states.

The reports quoting sources said the
N413.7billion will come from the recent
Liquefied Natural Gas (LNG) proceeds and
while the CBN will provide the balance as
a special intervention fund.

The Debt Management Office (DMO) will
also assist states in the restructure of
about N660billion commercial loans in
their books.

The source added that the President has
also stopped the deduction of monthly
allocations to states at source. The
federal government will instead stand as
guarantor for the loans.

Presidential spokesman, Femi Adesina,
confirmed the development to the media.

(TheWill)

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