The Federal Government on Thursday revealed that five states had met the 22 stringent conditions it stipulated for the 36 states of the federation seeking to draw from the N90 billion budget support loan facility in order to help them meet their obligations
Akwa Ibom State Governor, Mr. Udom Emmanuel, who said this while briefing State House correspondents at the completion of the National Economic Council (NEC) meeting held at the Presidential Villa in Abuja, said the loan would attract a nine per cent interest rate. He however, disclosed that one state had declined to access the loan, but did not identify the five states that had met the criteria to access the loan, nor the one that turned it down.
However, a presidency source who was privy to the deliberations at the council meeting said Lagos was the state that turned down the loan. Added that the deadline for the submission of the documents by the interested states in the facility is Monday and was not sure that just five of them had qualified for the loan. The presidency source also informed reporters that,
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“I don’t know why the Akwa Ibom governor said five states had met the criteria for the loan. May be he is referring to those who have submitted their documents to the Ministry of Finance already, but the ministry is still expecting others to do so by Monday which is the deadline for the submission of their documents. “As you know, they also have to get the approval of their state assemblies before applying for the loan, so I expect that more applications would pour in between now and Monday. “What I know for certain is that only Lagos State has said it is not interested. Also Anambra has a policy of not taking loans, so the ministry might not hear from the state, otherwise, it is wrong to say that only five states have met the criteria when the finance ministry is still expecting their applications and has not started evaluating them.”
According to Emmanuel, the loan will be disbursed after the next meeting of the Federation Account Allocation Committee (FAAC). Udom said it was not compulsory for states to access the facility but was a lifeline made available to them as a result of the economic crunch that has hit the country today. He said:
“It is just to make this available, it is not compulsory. What is important is, people have access to a lifeline? You see what is happening today is not peculiar to Nigeria as a country, you know the impact of the fall in crude oil price that has actually impacted oil producing countries like Nigeria. “What we are looking are the solutions, we must provide a lifeline for people to survive and to move on. I don’t think it is too much for the government to do.”
This is the third in a series of lifelines provided by the federal government to help states to meet their obligations, including the payment of salaries of civil servants in the states. President Muhammadu Buhari had in July last year approved a N804.7 billion intervention package to help bankrupt states pay salaries. A repayment plan was also worked out on how the states would meet those obligations.
Last Tuesday, it announced a N90 billion bond for the states with 22 stringent conditions attached to it. The conditions are contained in its Fiscal Sustainability Plan (FSP) Fiscal Framework for Sub-National Governments (States) in Nigeria which the Minister of Finance, Mrs. Kemi Adeosun, released at a stakeholders’ meeting attended by the 36 states Commissioners for Finance.
