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Zamfara, Kwara Get FG’s Bailout Money, 25 Others To Follow

naira-notes1Two out of the 27 states which applied to Central Bank of Nigeria (CBN) for bailout funds, Zamfara and Kwara, have received CBN funds to pay workers’ outstanding salaries.

A statement from CBN said that the two states met the requirements as agreed with their respective banks.

The apex bank said: “Efforts will be made in the coming days to conclude disbursements to other states so that all outstanding salaries to civil servants can be cleared.

“The Central Bank of Nigeria (CBN) has approved the request by Deposit Money Banks (DMBs) to provide financial accommodation to state governments to enable them pay the backlog of salaries of their workers.

“This is sequel to the decision by the National Executive Council (NEC) at its meeting of June 29, requesting Central Bank of Nigeria, in collaboration with other stakeholders, to appraise and consider ways of liquidating the outstanding staff salaries owed by state and local governments.
Conditions for loans
“The conditions for accessing the loan facility include resolutions of the State Executive Council (SEC) authorising the borrowing and state House of Assemblies consenting to the loan package, as well as issuance of Irrevocable Standing Payment Order, (ISPO) to ensure timely repayment.

“Out of the 27 states involved, funds have been disbursed to two states, namely Zamfara and Kwara, that met the requirements as agreed with their respective banks.

“Efforts will be made in the coming days to conclude disbursements to other states so that all outstanding salaries to civil servants can be cleared.”

CBN had promised to assist in the bailout of state governments that were facing financial crisis earlier.

The N300 billion CBN lifeline, which will enable them pay is ready and has been disbursed to two out of the 27 states that met the condition for the facility.

Of the 36 states, 27 had applied to draw from the cash relief packaged by President Muhammadu Buhari through the apex bank.

CBN facility is one of the three-pronged relief designed by the Federal Government to help financially troubled states.

Other relief plans
The other two are sharing of the $2.1 billion (about N414 billion) 2014 Income Tax/Education Tax; and dividends paid to the Federation Account through the Federal Inland Revenue Service, FIRS, by the Nigerian Liquefied Natural Gas (NLNG).

Besides, the states’ loans are to be rescheduled.

The President had directed CBN to package the loan to enable the states pay the backlog of salaries owed their workers. CBN is to package a Special Intervention Fund ranging from N250 billion-N300 billion to the states with low interest.

The decision on the N300 billion package was reached at the last NEC meeting chaired by Vice President Yemi Osinbajo in Abuja.

At the meeting were CBN Governor Godwin Emefiele, and the governors.

The sudden dip in states’ finances was as a result of the crash in global oil price that has cut Nigeria’s revenue by more than 50 percent, but some governors blamed it all on the Federal Government, which they alleged owed them backlogs of billions they claimed to have spent on maintaining Federal facilities in their domains.

-Vanguard

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