The Federal Government on Thursday announced that five states had met the 22 stringent conditions it stipulated for accessing the N90 billion loan facility.
Akwa Ibom State Governor, Mr. Udom Emmanuel, who briefed State House correspondents at the end of the monthly National Economic Council (NEC) meeting, said the loan would attract a nine per cent interest rate.
He however said that one state had declined to access the loan, but did not disclose the identity of the five states that had met the criteria to access the loan, nor the one that turned it down.
According to Emmanuel, the loan will be disbursed after the next meeting of the Federation Account Allocation Committee (FAAC).
He said it was not compulsory for states to access the facility but was a lifeline made available to them as a result of the economic crunch that has hit the country today.
“It is just to make this available, it is not compulsory. What is important is, people have access to a lifeline? You see 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 impacted oil producing countries like Nigeria.
“What we are looking are the solutions, we must provide a lifeline for people to survive and to move on. I don’t think it is too much for the government to do.”
This is the third in a series of lifelines provided by the federal government to help states to meet their obligations, including the payment of salaries of civil servants in the states.
President Muhammadu Buhari had in July last year approved a N804.7 billion intervention package to help bankrupt states pay salaries. A repayment plan was also worked out on how the states would meet those obligations.
Also, the federal government had deferred up to N10.9 billion obligatory repayments due from states for April this year in respect of their restructured bailout loan obligations.
Last Tuesday, it announced a N90 billion bond for the states with 22 stringent conditions attached to it.
The conditions are contained in its Fiscal Sustainability Plan (FSP) Fiscal Framework for Sub-National Governments (States) in Nigeria which the Minister of Finance, Mrs. Kemi Adeosun, released at a stakeholders’ meeting attended by the 36 states Commissioners for Finance.
The conditions followed a report by the Independent Corrupt Practices and Other Related Offences (ICPC) which showed that most of the states had diverted the bailout funds earlier given to them.
Emmanuel also stated that the federal government owed the states for federal projects executed by them and a reconciliation of the accounts between states and the federal government was ongoing.
He explained that while the reconciliation was ongoing, states should have access to funds to address their needs.
This, he said, explained the rationale behind the N90 billion facility.
He said: “It doesn’t actually mean that states which will take this money do not have something acruable also from the federal government, pending the time we reconcile our books.
“The federal government may have some balances to settle the state government but in the meantime while we are awaiting for the reconciliation to be concluded, we had to open the window so we can have access to liquidity and implement our 2016 budgets, I think that was the whole idea.”
He said the Minister of Finance reported to the council that the balance in the Excess Crude Account (ECA) as at June 15, 2016 stood at $2.261 billion
He said that the minister also informed the council that the full report on the forensic audit instituted on the revenue accruals into the NNPC and other revenue generating agencies would be made available to them when it is ready.
