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Governors willing to pay N614bn bailout deductions, others -NGF

Governors are willing to pay the N614bn bailout handed out to 35 states as budget support facility and other monies borrowed to state governments.

Chairman of the Nigeria Governors’ Forum (NGF) Governor, Kayode Fayemi stated this Wednesday night while fielding questions from newsmen during the forum’ s meeting in Abuja.

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He said that governors have never been averse to paying any money borrowed them, adding that they do not want the banking or financial system to be in jeopardy.

He said that just as governors were ready to pay, they also had duties to ensure reconciliation of accounts as far as money owed by states was concerned.

” It is a storm in a tea cup when we read that governors are refusing to pay . We don’t have such an issue. We are ready to pay”, he said.

 

The background…

Minister of Finance, Budget and National Planning, Zainab Ahmed, had recently said that they were plans to deduct from source the bailout handed out to 35 states as budget support facility.

Speaking during a Public Consultation Forum on the draft 2020-2022 Medium Term Expenditure Framework in Abuja, she said that deduction could commence in September 2019.

The federal government gave conditional budget support facility to the states through the Central Bank of Nigeria (CBN) in 2017.

It was to enable states to meet their financial obligations to civil servants and pensioners.

The money was provided at a nine per cent interest rate, with a two year grace period.

Ahmed had said the repayment would be taken from the affected states’ allocations during the next Federation Accounts Allocation Committee (FAAC) meeting this month.

She said the refund was not going to be treated as revenue to be used to fund the 2020 budget.

“It was a loan that was advanced by the Central Bank of Nigeria to the states,” she said.

Ahmed said that because the payment was made by the CBN, the recovery process is for the loans to be deducted from the FAAC allocations of the states and remitted back to the CBN.

Ahmed said the process would not require a consideration of the fiscal strategy paper (FSP) implementation, but to ensure the states stayed on the path of fiscal sustainability.

“This will not be a condition for the deduction. We will deduct direct at source and remit to the CBN,” she added.

In a communique issued after the NGF meeting , the governors resolved to partner Transmission Company of Nigeria( TCN) to improve power supply nationwide.
The Forum had earlier listened to a presentation by the Transmission Company of Nigeria (TCN), which highlighted issues such as inadequate transmission and sought governors’ commitment to improve the power situation in the country.

The forum said it received a briefing on the status of the world bank assisted State Fiscal Transparency, Accountability and Sustainability Program for results (SFTAS).

” The team from the World Bank assured the forum that all assessments now imply that states have improved in transparency ratings over the last quarter.

“The forum also received, in session, the new Country Director of the World Bank, Shubham Chaudhuri whose tour of duty commences on 1st October 2019. He replaces Ben Masoud after his four (4) year tenure in Nigeria, ” the forum said in the communique.

The governors were also briefed by Governor Kayode Fayemi on the meeting with President Muhammadu Buhari and the Inspector General of Police on the unlawful invasion of some governors’ residences, in direct violation of the immunity of the Governors.

The governors’ pledged to continue to collaborate with journalists on security particularly when they worked in hostile environments.

The Nigeria Meteorological Agency (NIMET) told the forum that the country should expect above average rainfall which has already resulted in severe flooding in several states.

Governors in attendance at the meeting were Babatunde Sanwo-Olu (Lagos), Samuel Ortom (Benue), Bala Mohammed (Bauchi), Sirake Dickson (Bayela), Abubakar Badaru, (Jigawa), Ifeanyi Okowa (Delta), Emeka Ihedioha (Imo), Seys Makinde (Oyo), Dapo Abiodun (Ogun), Aminu Masari (Katsina) and Bello Matawalle (Zamfara).

The Deputy Governors in attendance were those of Nasarawa and Kaduna states.

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