State govts reject FG's N162m monthly repayment plan of bail-out funds

Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed

Governors of the 36 States, Tuesday rejected the proposal by the Federal Government to extend the repayment period of its budget support to state government from twenty years to thirty years. 

Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, disclosed this while briefing State House correspondents at the end of the National Economic Council meeting presided over by Vice President Yemi Osinbajo at the Council Chamber, Presidential Villa, Abuja. 

She said that the Federal Government has made the first and second months, N252 million monthly deductions, in September and October, based on the twenty years repayment period. 

The new repayment plan was as a result of the outcry by the state governors which extended the year to thirty years and monthly repayment of N162 million was presented to NEC on Tuesday. 

She said despite the new repayment plan, the state governors were still not satisfied with the extension to thirty years.

"The budget support facility was initially for twenty years repayment period. And when we made the first deduction in September, the states had complained that the amount deducted, which was N252 million, was too harsh. 

"So, since then, the Central Bank of Nigeria, who is the lender, has revised the condition to make the repayment period longer. And so the new repayment period is thirty years. And this means that the states will be paying monthly N162 million. But again today, the states still were not satisfied with the condition.

"So, we are expecting that the Federal Ministry of Finance, Budget and National Planning, CBN and the states will engage again with the view of having the CBN further revise the condition to reduce the monthly repayment burden."  

According to her, “as at 22nd  October 2019, funds at the Excess Crude Account stood at $324,035,696.29, while stabilization fund account was in the margin of N28, 560, 710,627.55 and the natural resources development fund account averaging N70, 691, 826,511.84 respectively.”

The implication of the extension is that state government monthly repayment will reduce from N252 million to N162 million.