Economy

Governors meet over N614bn bailout deductions, others

The over N614 billion bailout deduction is expected to dominate discussions at Nigeria Governors Forum (NGF) Wednesday evening meeting.

The meeting is slated to start any moment from now in Abuja.

Minister of Finance, Budget and National Planning, Zainab Ahmed, had hinted on the plan to deduct from the source the bailout handed out to 35 states as a budget support facility.

Ahmed had said that deduction will commence in September 2019 during a Public Consultation Forum on the draft 2020-2022 Medium Term Expenditure Framework in Abuja.

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

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

The money was provided at a nine percent interest rate, with a grace period of two years.

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

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

According to her: “It was a loan that was advanced by the Central Bank of Nigeria to the states.”

She added 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 will 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 said.

It was gathered this has not have gone down well with the governors who are determined to take a common position on the issue at the meeting.

Besides, the NGF meeting is coming ahead of the 97th National Economic Council meeting slated for Thursday 19th September 2019.

Those in attendance are: Babatunde Sanwo-Olu (Lagos); Samuel Ortom (Benue), Bala Mohammed (Bauchi),  Sirake Dickson (Bayelsa), Abubakar Badaru, (Jigawa), Ifeanyi Okowa (Delta), Emeka Ihedioha (Imo), Seyi Makinde (Oyo), Dapo Abiodun (Ogun), Aminu Masari (Katsina) and Bello Matawalle (Zamfara).

The Deputy Governors in attendance are Nasarawa and Kaduna.

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