The federal government has deferred up to N10.9 billion obligatory repayments due from states for April in respect of their restructured bailout loan obligations, the federal ministry of finance said on Thursday.
About 27 Nigerian states are said to now face tough challenges of meeting their salary payments and most of them can hardly pay salaries.
The Finance Minister, Kemi Adeosun, disclosed this at Thursday’s meeting of the National Economic Council in Abuja, a report of the meeting made available by the Office of the Vice President, Yemi Osinbajo, stated.
Mr. Osinbajo chairs the NEC and the report of its Thursday’s meeting was signed the VP’s media aide, Laolu Akande.
At the meeting, the Governor of the Central Bank of Nigeria, Godwin Emefiele, said the Federal Government had disbursed N689.5 billion as salary assistance loan to States and additional N310 billion disbursed as Excess Crude Account-backed loans to states.
The finance ministry said it was in response to this tight cash challenge that the federal government has decided to defer the scheduled repayment from the bail out loans for the current month.
Just two months after assuming office last year, Nigeria’s President Buhari approved about N804.7 billion intervention package to help bankrupt states pay salaries. A repayment plan was also worked out on how the states would meet those obligations.
The government revenue, which depends largely on crude oil exports, has fallen sharply in recent months because of a fall in global oil prices.
Finance Minister, Kemi Adeosun had insisted at the just concluded Spring meetings in Washington that Nigeria was not sick and needed no external help even as the country faces tough economic challenges seen particularly in low government incomes on account of low oil prices.
According to the report, “Regarding the salary assistance loans, the Finance Minister informed Council that President Muhammadu Buhari has approved the suspension of monthly deduction at source for this month, and no such deductions would be made this month from the FAAC allocations to the States.
“This is meant by the President to give the States some financial relief at a time the FAAC allocations are dwindling due to the drop in oil prices.
“The Vice President, Prof. Osinbajo added that the President will continue to review the situation of the States on an ongoing basis and take appropriate relief measures as necessary and possible.”
Deductions from the allocations of states had grounded many states, leaving them with little funds to pay workers’ salaries and finance capital projects.
Excess Crude Proceeds
Mrs. Adeosun told the Council that Nigeria’s Excess Crude Account stood at $2.3 billion.
Mrs Adeosun gave an update to the Council on the progress regarding the constitution of the Nigerian Sovereign Investment Authority Board.
The minister told the Council that nominees had been selected to “form a Search Committee that will bring up names of potential Board members of the NSIA”.
Also, Mr. Osinbajo informed the Council of the reconstitution process of the Niger Delta Power Holding Company, NDPHC, with representatives from states based on the six geo-political zones.
According to the report, Federal Road Safety Corps Marshall, Boboye Oyeyemi, was also in attendance to present the Nigeria Road Safety Strategy Document (NRSS – 2014-2018) to the Council.
The document serves to address current overlaps, streamline the role and responsibilities of all participants in order to maximize the benefits of investment in road safety management activities.
It was endorsed by the Council.
