Panic Grips Govs over FG’s Stance on Repaying N614bn Bailout


Panic has gripped the Nigerian state governors following the directive for repayments of the loans they received from the federal government between 2015 and 2017.

The federal government gave out the loans as bailouts during the financial crisis in the states.

The Ministry of Finance has put the total indebtedness of the states to the federal government at N614 billion.

The money was advanced to the states under the tag of the National Budget Support Loan Facility.

While announcing the directives that states should commence repayment last week, the Minister of Finance, Mrs. Zainab Ahmed, said each of the states would be required to refund a total of N17.5 billion.

An official close to the office of the Chairman of the NGF and Governor of Ekiti State, Dr. Kayode Fayemi, told The Premium Times that the governors “are jittery” following the announcement of the repayment of the loans.

“You know most of the governors are new and they inherited the loans,” he said. “We know government is a continuum, but you know how it feels when you just resumed office in May and you are asked to start paying such loans in August,” he said

The Director-General of the Nigeria Governors Forum, Asishana Okauru, confirmed to Premium Times during a telephone interview that the situation was creating serious concerns for the governors, who are unrelenting in finding a solution to the problem.

He said the governors are working out an exit strategy, but that he would not be able to make such public.

Okauru noted that what the federal government did in providing the loans was done in good faith, but as the realities of repayment stare the governors in the face, a reconciliation would be necessary to lighten the burden on the governors.

“They are thinking of the impact of the new minimum wage; they are thinking of the impact on the security situation in the country and their capacity to raise IGR; they are thinking of expenditure around health, education, innovation and all that,” Okauru said, while listing some of the concerns of the governors.

Okauru also confirmed that it was a matter of serious concern that some of the state governors are new and had just taken over the governance of their respective states.

He said these governors would need more time to settle down to deal with serious challenges, admitting, however, that it would be understood that government continues, regardless of who occupies it.

He said the NGF was undertaking a series of meetings with the relevant stakeholders to ensure that a common ground was reached for the benefit of the parties.

“Remember that there are several platforms for all this. The National Economic Council is the ideal platform for things like this and those discussions are ongoing right now,” he said.

“The governors seriously think there is a need for reconciliation and they are thinking of ways to ensure that it is a win-win situation at the end of the day.”

Although the governors had claimed they judiciously applied the support funds, investigations by the Independent Corrupt Practices and Related Offences Commission (ICPC) showed some of the states had explanations to render on the manner they spent the funds.

The ICPC 2016 report had alleged that some states diverted funds, while others mismanaged the funds to the extent salaries were left unpaid.