BANKS RELEASE N311BN TO 24 STATES

Bailout: Banks release N311bn to 24 states

Ayodele Oluwagbemi

29 Oct 2015 12:01 am

Oyetunji Abioye

Deposit Money Banks have so far released N311.41bn to 24 states of the federation out of the N338bn bailout fund approved by President Muhammadu Buhari a few months ago, the Central Bank of Nigeria has said.

The CBN, which is in charge of the bailout, in data made available to our correspondent on Tuesday, said the Federal Government was committed to the programme.

The development means only three states have yet to draw from the bailout fund, with 27 out of the 36 states of the federation already applying for the bailout.

The National Economic Council led by Vice President Yemi Osinbajo, the chief executive officers of the banks and the CBN management brokered the bailout deal.

The bailout was approved by Buhari after cash-strapped state governments approached the Federal Government for assistance.

Some of the states owe their civil servants as much as 14 months’ salary arrears.

As of September 18, 2015, 20 out of the 27 states that applied for the bailout to offset salary arrears had received over N222bn.

The Director, Corporate Communications, CBN, Mr. Ibrahim Mu’azu, told our correspondent on Wednesday that the new states that had just received bailout disbursement from the banks were Katsina, Delta, Benue and Taraba.

He said the development had brought the total amount disbursed by the commercial banks to 24 state governments to N311.41bn.

So far, from the 27 states that applied for the loan, only three states have yet to get the money. These are Borno, Bayelsa, and Cross River, which are to be given N7.680bn, N1.285bn and N7.856bn, respectively.

The states that have accessed the bailout are Abia (N14.15bn), Kwara (N4.32bn), Zamfara (N10.02bn), Osun (N34.98bn), Niger (N4.31bn), Bauchi (N8.6bn), Gombe (N16.46bn), Adamawa (N2.38bn), Ondo (N14.69bn) and Kebbi (N690m).

Others are Ekiti (N9.6bn), Enugu (N4.207bn), Imo (N26.8bn), Ebonyi (N4.1bn), Plateau (N5.4bn), Nasarawa (N8.3bn), Sokoto (N10.1bn), Edo (N3.2bn), and Ogun (N18.9bn).

The loan is repayable at an interest rate of nine per cent over a 20-year period and it is solely for the purpose of paying the backlog of salaries.

The approval of the special intervention fund was sequel to the decision by the National Economic Council at its meeting of June 29, 2015.

The conditions for accessing the facility include resolutions of the respective state executive councils authorising the borrowing and the state houses of assembly consenting to the loans, as well as issuance of Irrevocable Standing Payment Orders to ensure timely repayment at source from the states’ Federation Account allocations.

The release of the N338bn bailout fund followed the restructuring of the state governments’ debts into bonds by the DMO at an interest rate of 14.83 per cent of the value.

Copyright PUNCH.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.

Contact: editor@punchng.com