Economic Crunch: Seven States Meet FG’s N90bn Bailout Conditions

Seven States in Nigeria have met the conditions to access the N90 billion Naira loan of the Federal Government.

Investigations showed that majority of the states were at different stages of meeting up with the conditions set for disbursement of the loan facility.

A top government official stated that documents of the states that had applied for the loan facility were being reviewed by the Federal Government.

The source said that barring any last minute change, an approval would be given by the Ministry of Finance to the seven states to access the fund through the bond market.

Some of the conditions for the loan were that a restriction would be placed on states borrowing from commercial banks; all states must publish their financial statements, budgets and the quarterly budget performance; state’s finances would no longer be shrouded in secrecy and items like security vote, feeding, travel among others would be made visible.

Others were that states would review obsolete revenue laws and tariffs; and redefine Internally Generated Revenue to include non-tax revenue sources that would reflect local opportunities in each state especially in solid minerals.

In the same vein, the states were expected to set target limits for recurrent to capital expenditure; set target for personnel costs as percentage of total budget; clean up their payroll by eliminating ghost workers as well as set up Efficiency Unit to reduce cost of governance.

The source, who did not provide the identities of the states said, “The conditions for that loan were spelt out in the Fiscal Sustainability Plan and it was endorsed by all the governors at the National Economic Council meeting. So the talks that the conditions are too stringent should not arise at this time because that document was approved by all the governors.

“Majority of the states have started working towards meeting these conditions and as we speak, a total of seven states have so far met the conditions for the loan. During the last Federation Account Allocation Committee meeting held on Wednesday, a lot of the states also said they have recorded progress in meeting up with the conditions.”