Nigeria, July 13, 2015, (Blank NEWS Online) –
President Muhammadu Buhari has approved a three-pronged, long term financial relief package to stave off the embarrassing economic situation the last administration, especially state governments, plunged the country into.
To this end, the bailout would also put an end to myriad of complaints from newly sworn in state governors on state finances.
The bailout is coming on the heels of the recent Federation Account Allocation Committee (FAAC) and the National Economic Council (NEC) meetings. In his inaugural speech at the NEC meeting, President Buhari, irked by Nigerian workers’ plight asked the council to urgently end issues of unpaid salaries.
Apart from the direct cash bailout, the three tiers of government (Federal, States and Local Governments) will share $1.7 billion from the Excess Crude Account (ECA).
The Accountant General of the Federation, Ahmed Idris, revealed he had been instructed to share the money left in the ECA. “We are going to distribute as agreed and directed during the NEC meeting last week. And the position was very clear that what we met on the ground is what we are going to distribute among the three tiers of governments: the federal, state and local governments based on the approved formula.”
Also, about $2.1 billion (N413.7bn) in fresh allocation, sourced from recent NLNG (Nigeria Liquefied Natural Gas) proceeds to the Federation Account, would also be shared between states and federal government, using the revenue allocation formula.
To ease the plight of states with backlog of salaries, there is another Central Bank of Nigeria (CBN)-packaged special intervention fund (soft loans available to states to access) ranging from between N250 billion and N300 billion.
Meanwhile, the Governor of the CBN, Godwin Emefiele, had directed state Commissioners for Finance to ensure that their states access the special intervention fund.
A debt relief programme has also been proposed by the Debt Management Office (DMO) to assist states restructure their commercial loans currently put at over N660 billion and extend the tenure of the loans to 15 years to reduce debt service liabilities.
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