Govs in Closed-door Meeting over Repayment of N614bn Bailout Funds

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Former Minister of Mines and Steel Development, Dr Kayode Fayemi

Chuks Okocha in Abuja

Ahead of Thursday’s National Economic Council (NEC) meeting, the Nigeria Governors’ Forum (NGF) Wednesday met to adopt a common position over the plan by the federal government to recover the N614 billion bailout fund given to 35 states.

THISDAY gathered that the meeting was the first time the governors under the chairmanship of Kayode Fayemi of Ekiti State would gather after the decision by the federal government to recover the N614 billion advanced to the states as budget support facility.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, had in the last NEC meeting, presided over by Vice President Yemi Osinbajo, at the Council Chambers of the Presidential Villa, hinted that the federal government would commence the recovery of the fund from Federal Allocations Accounts Committee (FAAC)

The minister had at the Public Consultation Forum on the draft 2020-2022 Medium Term Expenditure Framework in Abuja on September 10, said the dedications would begin in two weeks.

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 public 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 would be made from the affected states’ allocations during the next FAAC meeting this month.

She said the refund was not going to be treated as revenue to be used to fund the 2020 budget.

According to her, “It was a loan that was advanced by the Central Bank of Nigeria to the states.” She added 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.

Ahmed said the process would not require a consideration of the fiscal strategy paper (FSP) implementation, but to ensure the states stayed on the path of fiscal sustainability.

“This will not be a condition for the deduction. We will deduct direct at source and remit to the CBN,” she reportedly said.

The state governors in attendance to yesterday’s meeting were Babajide Sanwo-Olu (Lagos), Samuel Ortom (Benue), Bala Mohammed (Bauchi), Seriake Dickson (Bayela), Abubakar Badaru, (Jigawa), Ifeanyi Okowa (Delta), Emeka Ihedioha (Imo), Seyi Makinde (Oyo), Dapo Abiodun (Ogun), Aminu Masari (Katsina) and Bello Matawalle (Zamfara).

The governors of Nasarawa and Kaduna states were represented by their deputies.

Speaking after the meeting, Fayemi said that the states were willing to pay back the bailout fund, adding however, that it will be done after a proper reconciliation with the federal government.

“We are ready to pay. If you borrow, you pay. We are not averse to paying, else we put our banks in problem. We are not against payment but there must be proper reconciliation, “ he added