FIVE STATES SCALE HURDLES TO ACCESS FG’S N90BN BAIL-OUT
The Federal Government revealed on Thursday that five out of the 36 states of the federation have successfully scaled huddles necessary to access the N90 billion loan facility it has provided.
But the list of states that have scaled through was still being kept a top secret by the presidency, although it disclosed that one state declined the loan.
Government intends to disburse the loans at 9% interest rate but may commence actual disbursement to states after the next Federal Accounts Allocation Committee (FAAC) meeting.
The Ministry of Finance under the purview of Kemi Adeosun had set out a number of stringent conditions to be met by states to be able to access the loan.
The conditions included biometric capture of all civil servants; establishment of an Efficiency Unit; implementation of Continuous Audit, and improvement in Internally Generated Revenue (IGR), among others.
The loans have been structured to average about N1.3 billion for the first three months and N1.1 billion for the next nine months for each state that is interested.
Akwa Ibom State Governor, Emmanuel Udom, who briefed State House Correspondents after the 68th National Economic Council(NEC) meeting in Abuja, disclosed that the Excess Crude Account earnings as at June 15, 2016, stood at USD 2.261 billion.
The Excess Crude earnings as at April 30, 2016, stood at USD2.25billion.
The governor said: “The Excess Crude Account earnings as at June 15, 2016, stood at USD 2,261,249,976.96.
“Meanwhile, five states have completed the process for borrowing from the budget support loan.”
Udom, who gave further explanations on the loan facility, said the N90billion loan was not mandatory but was being provided to help states meet up shortfalls in their budgetary appropriations and other expenditures.
His words: “Let me throw more light on this loan issue. The N90billion is to help states financially, but I wouldn’t want you to call it a bail-out.
“As at today, this window just opened, we don’t know how many will decline at the end of it; so, I think we cannot actually disclose the states that have met the conditions prematurely so that we give you the actual fact, but let me explain as the minister did here the other time.
“There is a reconstruction going on.
“It doesn’t actually mean that states which will take this money do not have something accruable also from the federal government.
“Pending the time when we reconcile our books, the federal government may have some balances to settle the state government but, in the meantime, we are awaiting those reconciliation to be concluded.
“Can we open up the window so we can have access to liquidity and implement our 2016 budget, I think that is the whole idea.
“When you talk about federal, state and local government, one thing is sure, we are all Nigerians.
“When you consider what is happening in the global economy, you will see that these are support programme that we are bringing up to actually ease the impact of these global economic issues.
“For Nigeria, it is not too much. The N90 billion and the federal support facility, they are one and the same thing.
“What the minister explained was that the first tranche of N50billion bond will be issued and the N40billion will then follow to make up N90billion.
“It is just to make this money available, it is not compulsory; what is important is, can people have access to a lifeline?
“What is happening today is not peculiar to Nigeria as a country, the impact of the fall in crude oil price that has actually gotten to oil producing countries like Nigeria is the major cause of this.
“What we are looking at is what are the solutions. We must provide a lifeline for people to survive and to move on. I don’t think its too much.”
At the NEC meeting, the Central Bank Governor, Godwin Emefiele, also gave an update on the flexible foreign exchange rate policy of government.
He said the forex reforms had been structured to have a market-driven exchange rate, single market structure through interbank/autonomous window as well as access to forex proceeds by non-oil exporters.
Minister of Industry, Trade and Investment, Okechukwu Enelama, also gave an overview of the NEC agreements, saying council took far reaching decisions to improve the business environment and ease of doing business in Nigeria.
He said focus would be intensified on enabling environment initiative, including prioritising initiative focus on industrial sector.
Hear him: “Henceforth there is going to be building of strong collaboration between Federal Government and States on ease of doing business; measurement on states doing well, having friendly competitions on ease of doing business; composition of a Presidential Commission to steer the process and report monthly to the Federal Executive Council; establishment of a secretariat for the commission, with the active involvement of the private sector.”