*Details of Debt Relief Program kicks off in few weeks<\/p>\n
The implementation of a three-pronged financial intervention of President
\nMuhammadu Buhari to assuage workers plight and support the states is now
\nin progress.<\/p>\n
Specifically, state governments will start benefiting from the special
\nintervention fund of between N250B to N300B in a matter of weeks.<\/p>\n
Currently, planning meetings are being held between members of the
\nFederation Account Allocation Committee, FAAC and CBN, on the one hand,
\nand also between CBN and commercial banks on the other hand, regarding
\ndetails of the special intervention fund and the debt relief program of
\nthe President for the states.<\/p>\n
Such meetings are reviewing loan profiles of the states, issues around
\nrestructuring of existing loans including time span, and reconciling the
\nfigures.<\/p>\n
Already, it has been agreed that existing state loans be restructured for
\n20 years, and regarding the bond option, the rates to be applied would be
\nmarket-based but with a cap to make it affordable. Within weeks from now,
\nthe states are expected to start benefiting from this two other parts of
\nthe presidential intervention.<\/p>\n
It would be recalled that the details of the presidential intervention are
\nin three parts:<\/p>\n
The sharing of about $2.1B in fresh allocation between the states and the
\nfederal government. The money was sourced from recent LNG proceeds to the
\nfederation account, and its release okayed by the president.
\nA Central Bank-packaged special intervention fund to the tune of about
\nN250B to N300B that will offer financing to the states. This would be a
\nsoft loan available to states.
\nA debt relief program by the Central Bank of Nigeria and Debt Management
\nOffice, DMO, which will help states convert their commercial bank loans
\ninto bonds, and restructuring such loans by extending their life span
\nthereby reducing the debt-servicing expenditures of the states.<\/p>\n
By extending the commercial loans of the states, the third part of the
\npresidential intervention would therefore make available more funds to the
\nstate governments which otherwise would have been removed at source by the
\nbanks.<\/p>\n
To be able to offer this option to the states, President Muhammadu Buhari
\nbrought the financial muscle of the federal government to bear on behalf
\nof the states guaranteeing the elongation of the loans.<\/p>\n
Besides, the availability of the $2.1B from LNG which has now been shared
\nto the states was made possible because President Buhari set a new fiscal
\nstandard and tone that all monies generated should go to the federation
\naccounts. Before that constitutional standard was upheld by the president,
\nLNG dividends were going to other NNPC designated accounts.<\/p>\n
None of the three parts of this intervention would have been possible
\nwithout the creativity and approval of President Buhari. It should be
\nnoted that the backlog of the salaries in some of the states went back
\nseveral months before the president took office.<\/p>\n
To date, the states have now drawn from the LNG taxes and dividends
\ntotaling $2.1B, besides a second sharing from the federation account-ie
\nthe regular monthly allocations-a sum of over N518 Billion last week.<\/p>\n
Finally states have been advised during NEC meetings to take certain steps
\nto avoid a similar financial crisis in the future. These include:<\/p>\n
Making the payment of salaries, a first-line charge.
\nDo more to increase their internally generated revenue.
\nClean-up their payroll to eliminate ghost workers.
\nHave a fully-functional Debt Management Offices..<\/p>\n","protected":false},"excerpt":{"rendered":"
*Details of Debt Relief Program kicks off in few weeks The implementation of a three-pronged financial intervention of President Muhammadu Buhari to assuage workers plight and support the states is…<\/p>\n","protected":false},"author":1,"featured_media":40813,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[5],"tags":[],"class_list":["post-40812","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\n