N614bn Bailout Deductions: We Are Ready To Pay — Governors
The 36 State Governors under the aegis of Nigeria Governors Forum (NGF) Wednesday agreed to pay the N614 billion that was advanced to thirty five states as budget support facility.
Responding to a question after the meeting of the governors ahead of Thursday’s 97th National Economic Council, NEC meeting,
Chairman of NGF and Ekiti State governor, Dr. Kayode Fayemi said that as governors they are willing to pay the refund of the bail out fund, stating that it will be done after a proper reconciliation with the federal government, adding that if you owe, you pay.
Fayemi said: “If you borrow, you pay. We are never averse to payment of loans that we took under legal environment and we don’t want a situation that will put our financial and banking system into Jeopardy.
“However, governors believe that we are ready to pay, we also have a duty to ensure reconciliation of account as far as moneys owed to states may be concerned and that is the process that is ongoing.
“It is a storm in a teacup when we read about governors refusing to pay. We don’t have such an issue, we are ready to pay.”
The governors who met Wednesday night at the NGF’s Secretariat, Lake Chad, Maitama, Abuja, held such a meeting for the first time after the decision by the Federal Government’s decision to recover the sum of N614 billion advanced to 35 states as budget support facility.
It would be recalled that the Minister Finance, Budget and National Planning, Zainab Ahmed, had at the last NEC meeting, presided over by Vice President Yemi Osinbajo, at the Council Chambers of the Presidential Villa in August disclosed the plans of the Federal government.
Zainab Ahmed had at the Public Consultation Forum on the draft 2020-2022 Medium Term Expenditure Framework in Abuja on September 10th said the deductions will begin in two weeks, which falls on September 27th.
The federal government gave the conditional budget support facility to the states through the Central Bank of Nigeria (CBN) in 2017.
It was to enable the states to meet their financial obligations to civil servants and pensioners. The money was provided at a nine per cent interest rate, with a grace period of two years.
Ahmed had said the repayment will be taken from the affected states’ allocations during the next Federation Accounts Allocation Committee (FAAC) meeting this month.
According to her, the refund was not going to be treated as revenue to be used to fund the 2020 budget, adding,
“It was a loan that was advanced by the Central Bank of Nigeria to the states.”
Ahmed who further explained that because the payment was made by the CBN, the recovery process is for the loans to be deducted from the FAAC allocations of the states and remitted back to the CBN, adding that the process will not require a consideration of the fiscal strategy paper (FSP) implementation, but to ensure the states stayed on the path of fiscal sustainability.
The minister had said that, “This will not be a condition for the deduction. We will deduct direct at source and remit to the CBN “
