Business

States sink deeper in financial crisis as 31 states fail FG’s bailout tests

Published

8 years ago

June 17, 2016

Akwa Ibom, Udom, pensioners, protest, entitlement, birthday

As the economic crisis in the country bits harder, five state have reportedly met the 22 stringent conditions given by the Federal Government to be able to draw from the N90 billion budget support facility being extended to state governments.

However, one of the states of the federation has also reportedly opted out of the loan that attracts nine percent interest rate.

This was disclosed by the Governor of Akwa Ibom State, Udom Emmanuel, while briefing State House correspondents at the end of the 68th National Economic Council (NEC) meeting chaired by Vice President Yemi Osinbajo.

Emmanuel, who was accompanied to the briefing by the Kaduna State Deputy Governor, Bala Bantex, Minister of Trade and Investment, Okey Enelamah, Special Adviser to the President on Social Investments, Mrs. Maryam Uwais, however failed to name the states that met the conditions and the one that opted out.

Read Also : Mass sacks: No bailout for banks, FG says

The governor however said the disbursement of the loan will begin during the next Federation Account Allocation Committee, FAAC, meeting.

Emmanuel said: “The Honourable Minister of Finance, Kemi Adeosun, also briefed the Council on the Federal Government’s N90 billion budget support loan facility for States at a nine per cent interest rate.

“Five States have already completed the process for borrowing from the Presidential Budget Support Facility for States, which will help states to pay salaries and other pertinent emoluments. Other states are expected to proceed to tap from the facility.

“Though I am not the minister, I can throw more light on the question. The N90 billion is the same thing as I have mentioned. I wouldn’t want you to call it a bail out. I want to call it the exact name that it is.

“What the minister explained was that first tranche of N50 billion bond will be issued and the N40 billion will follow to make N90 billion. It is just to make this available, but it is not compulsory. What is important is that people can have access to a lifeline. We all know that what is happening today is not peculiar to Nigeria as a country. You know the impact of the fall in crude oil price that has actually gotten to oil producing countries like Nigeria.

“What we are looking at are the solutions. We must provide a lifeline for people to survive and to move on. I don’t think it’s too much.”

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