N614bn bailout: Governors reject repayment plan

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Governors have rejected the Federal Government’s template to refund the N614 billion bailout cash to states during the 2015-2017 economic crisis.

They have offered to refund N70 million per state, per month over a 20-year period instead of the N225 million monthly payback per state, which the Federal Government proposed, sources said yesterday.

According to the governors, paying back N225 million each would cut deeply into the finances of states.

The governors stated their position at Thursday’s meeting of the National Economic Council (NEC), chaired by Vice President Yemi Osinbajo.

As a result of the disagreement, the commencement date of the deduction has not been fixed.

The governors, who said  they were ready to commence repayment, insisted, however, that it should not start until a proper reconciliation is done.

Each state is expected to refund about N17.5billion to the Federal Government. Only Lagos State did not obtain the loan.

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

A top source at the meeting said: “The NEC agreed that the states must refund the N614 billion. This is not in dispute at all. But the template brought forward by the Federal Government was rejected by NEC members

“The governors based their calculation on the clause in the agreement with the Federal Government before the N614 billion bailout was given to them as a loan.

“They said the government wanted the cash paid back in 20 years. They insisted that the rules cannot be changed midway.”

A governor, who spoke in confidence said: “We also pleaded with the Federal Government to stay action on the effective date of the deduction until a proper reconciliation of how much each state owes is concluded.

“There are a lot of indices to be taken into consideration. We have some outstanding cash with the Federal Government too.

“A reconciliation is headed by Governor Nasir El-Rufai of Kaduna State. We will wait till the committee submits its report before determining when the refund will start.”

At a pre-NEC meeting on Wednesday in Abuja, the Chairman of the Nigeria Governors’ Forum (NGF), Dr.  Kayode Fayemi, said states were not against paying back the loans, but there must be proper book keeping.

He said: “If you borrow, you pay. We are never averse to payment of loans that we took under legal environment and we don’t want a situation that will put our financial and banking system into jeopardy.

“However, governors believe that we are ready to pay, we also have a duty to ensure a reconciliation of account as far as moneys owed to states may be concerned and that is the process that is ongoing.

“It is a storm in a tea cup. When we read about governors refusing to pay it is not true…we don’t have such an issue, we are ready to pay”.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, hinted of plans to deduct the refund from source.

Mrs. Ahmed, who spoke at a Public Consultative Forum on the draft 2020-2022 Medium Term Expenditure Framework in Abuja, said  the deduction will commence from this month.

She said the repayment will be deducted from the affected states’ allocations during the next Federation Accounts Allocation Committee (FAAC) meeting.

The FAAC meeting held yesterday with the three tiers of government sharing N720 billion.

NGF condemns invasion of governor’s home

At their meeting on Wednesday, the NGF condemned the invasion of the home of some governors by security agencies.

Fayemi, who also read the communiqué at the end of the meeting, described the action as an “indirect violation of the immunity of the governors.”

He said the forum discussed the issue with President Muhammadu Buhari and the Inspector -General (IG) Mohammed Adamau.

The communiqué  said: “The Forum was briefed by the Chairman, Governor Kayode Fayemi of Ekiti State on the meeting between the Forum and the President first, and later the Inspector General of Police on the unlawful invasion of some governors’ residences, in direct violation of the immunity of the governors.”

He said the governors “pledged to continue to collaborate with journalists, especially around the issues of security when they work in hostile environment.”

The Forum also 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 received, in session, the new Country Director of the World Bank, Shubham Chaudhuri, whose tour of duty commences on 1st of October, 2019. He replaces Ben Masoud after his four-year tenure in Nigeria.

“The Forum received a presentation from Nigeria Meteorological Agency (NIMET) advising that the country should expect above average rainfall which has already resulted in severe flooding in many states.

“The Forum listened to a presentation by the Transmission Company of Nigeria (TCN), which highlighted the issues around inadequate transmission and sought governors’ commitment to improve the power situation in the country. The Forum resolved to partner TCN to improve power supply nationwide.”

Those in attendance were governors Babatunde Sanwo-Olu (Lagos), Samuel Ortom (Benue), Bala Mohammed (Bauchi), Henry Seriake Dickson (Bayela), 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 who came for the session were from  Nasarawa and Kaduna states.

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