As the two–week ultimatum given to States over the bail-out fund deductions draw near, Governors are reportedly prepared to lobby the federal government (FG) over the repayment plan.
According to industry sources, state governors are not prepared to meet the two-week deadline given them by the FG to refund the N614billion bailout fund.
The details: It was learnt that the 35 state governors have raised concerns and are prepared to meet the Presidency this week, and ask that the Central Bank of Nigeria (CBN) and Office of the Accountant-General of the Federation suspend the move to begin the deduction of the bailout funds until some reconciliations have been done.
- Firstly, the Governors are insisting that the N614billion was agreed to have a 20-year repayment plan. Hence, they are surprised why the FG is requesting for bulk repayment.
- Also, the governors are reportedly insisting that over $1 billion of the bailout fund was sourced from the NLNG dividends, which states are entitled to. While the governors admitted to owing, they insist the N17.5 billion quoted is overstated and needs to be reconciled
- Lastly, the governors are concerned that the planned wholesale deductions will hurt the economy of most states and it will be unfair to the present generation of governors.
An industry source reportedly disclosed: “Most of the governors who secured the bailout have spent the cash and left the office. Some did not even spend the bailout for what it was meant for.
“More importantly, the Federal Government entered into an agreement with the states that the N614billion would be a loan with a 20-year repayment plan. They want the FG to honour this agreement.
“Since the government is a continuum, the governors have agreed at NEC to refund the N614billion with a caveat that there must be a reconciliation of the outstanding accruals to the states from NLNG dividends and the N17billion debt owed per state.
“All the states are stakeholders in NLNG and they are entitled to dividends. The governors are saying that you cannot lend them what belongs to them. They are demanding a reconciliation of their share of the dividends from NLNG with the outstanding Budget Support loan/ debt.
“Thereafter, the government and the states will now meet to come up with a refund process of whatever is the difference as outstanding debt.”
A move to lobby: Following the development, a reconciliation panel headed by Governor of Kaduna State, Nasir el-Rufai, is reportedly being set up to approach the CBN, the Nigerian National Petroleum Corporation (NNPC) and the Office of the Accountant-General of the Federation (OAGF).
The sources further disclosed: “We have raised a reconciliation panel, which is headed by Governor Nasir el-Rufai of Kaduna State. The governor will work with the CBN, NNPC, and OAGF.
“The issues in contention between the Federal Government and the governors are reconciliation of records and the date of the commencement of the refund.
“As governors, we believe that if there is no reconciliation acceptable to all parties, there should be no refund.
“The CBN Governor is however adamant that states must refund the bailout because it came from its vault. The apex bank made the bailout available to the states.”
The Back-Story: In August, the Minister of Finance, Budget and National Planning, briefed State House correspondents at the end of the National Economic Council, that the FG had concluded plans to recover the N614 billion budget support (bailout fund) given to states, as a committee that would facilitate the recovery had been constituted.
- Ahmed disclosed that each of the 35 states that benefitted from the facility would pay back the equivalent of N17.5 billion.
- In an earlier publication on the bailout fund by Nairametrics, it was disclosed that FG had deducted an accumulated sum of N122.4 billion from the monthly allocation due to thirty-five (35) states between January and July 2019.
Meanwhile, the FG has announced that it would commence deducting the N614 billion budget support facility from state governments in two weeks and this has built tension among the state’s governors.