Osinbajo explains bailout to states

By Ali Smart

Vice President Yemi Osinbajo on Saturday gave fresh insights on what informed the decision to provide bailouts to debtor states.

Speaking in Ibadan, the Oyo State capital, Osinbajo said the reason President Muhammadu gave financial bailout to states that are unable to pay workers’ salaries was as a result his compassion and love for the workers in the states.

According to him, going by the financial circumstances of the states affected and the plight of the workers, it was essential that any listening and sensitive government intervened in the way President Buhari did.

“As you know, the Federal Government under President Buhari directed that three things should be done regarding the situation of the states in Nigeria. We know that the states were unable to pay salaries of their workers for many months. The first stage was the sum of money that was shared from the Nigeria Liquefied Natural Gas dividends and taxes, amounting to $2.1b,” he said.

Speaking further, he said: “The second package is a loan which the states are allowed to access. The loans are concessionary in nature and any state that deserves it should have it. The third stage is the conversion of loans owed to commercial banks by the states to bonds. It is fairly complicated but simply put, the state and FG will work out how the loan will be repaid over an extended period of time. We are looking at 15 to 20 year period. Some have described this as bailout but what Buhari has done is an extremely creative and compassionate way of giving relief to states as much as possible, given the financial circumstances they found themselves.”

Read also: Presidency, PDP argue over bailout funds

The Vice President while calling on the states to utilise the fund for its purpose and judiciously, said the 40 per cent drop in federal allocation to states as a result of fall in crude oil prices was capable of paralysing state finances, while also calling on Nigerians to be vigilant in order not to fall into the dangerous plot of Boko Haram.

He also used the opportunity to clarify his recent statement on the plan by the insurgents to hit their targets using scavengers.

“What was said is that the Boko Haram in the North Easy are using people called Babambola (scavengers) to try and plant explosive devices here and there. I did not say that they would be planted in the houses of VIPs. What we need to do is to be extremely careful and be a lot more vigilant to ensure that we do not fall prey to the terrorists’ activities.”

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