The Nation Newspaper

Tag: Bailout funds

  • Bailout funds will be used for its purpose – Aregbesola

    Bailout funds will be used for its purpose – Aregbesola

    The Government of the State of Osun on Monday assured the people of the state that the N34.988billion bailout funds received from the Federal Government will be used for the very purpose for which it was received.

    A statement by the Director bureau of communication, Mr. Semiu Okanlawon, explained that while the first batch of payment this week will be effected through the allocations received for the month of July..

    The clarification, according to the Bureau of Communication and Strategy in the Office of the Governor, became necessary given the various insinuations and manipulations of the minds of the people giving the impressions that the funds will be diverted to other purposes.

    “We are using the opportunity to assure the entire workers in the state that all arrears of salary and pensions will be paid from the bailout funds as the reason for which it was received. And this is why the government has ensured that the verification exercise is concluded and the actual figure of workers is determined for the purpose of payment,” the Bureau stated

    Explaining further, the Bureau said that bailing out by the Federal Government will not be a continuous thing in the life of Nigeria, adding that the current bailout scheme was necessitated by the economic doldrums the ousted PDP-led Federal Government plunged the country into.

    The statement said the government must protect fully the interests of its real workers who toil day and night to ensure the growth and development of the state.

    “It is therefore pertinent for workers themselves to ensure effective conclusion of this process in order to ensure they reap the fruits of their labour and prevent the criminal and dubious activities of those who reap where they do not sow.

    “Therefore, we must agree that civil service reforms are absolutely critical at this stage in the life of our dear state. There is a need for the engagement of all critical segments of leadership of government and labour for the necessary actions that will make the service effective, efficient and economic.

    “If our state, and by all means, the entire South-West region will become financially and materially viable, a wholesome review of what works and what does not  must be carried out and implemented with considerable alacrity and efficiency.”

    The statement added that the Governor reemphasised his commitment to sustaining the many social programmes his government operate, stating that compassion with the distressed and poor members of society is the true definition of successful leadership.

  • CBN to recover bailout funds from states’ allocations

    CBN to recover bailout funds from states’ allocations

    As indigent states prepare to receive their bailout funds from the Central Bank of Nigeria (CBN), indications have emerged that repayment of the soft loan would be deducted from the Federation Account Allocations to benefiting states in graduated manner over a long time period.

    The Nation gathered that deducting the bailout from states’ federation allocation is one of the options the CBN is considering among other options, but the deduction would be done in such a way that it will not cause much distress to the affected states.

    “The reason the CBN is seriously considering the direct deduction of the bailout from states allocation is because there is no other way the CBN can recover this bailout funds,” a source told The Nation.

    The source said the decision to bailout the states was strictly “a fiscal and political decision” that has nothing to do with the CBN, but that the regulator was brought in  to make the bailout possible.

    Last week at the end of the Monetary Policy Committee (MPC) meeting in Abuja, the CBN Governor, Godwin Emefiele warned the affected states that the bailout was not a grant, but a loan. He then urged state governments to design ways of being less dependent on monthly allocations and retool their Internally Generated Revenue (IGR) mechanism.

    The Presidency source admitted that the state governments might put up some resistance, because deducting the bailout from their federation account allocation will reduce their monthly take home from the federal purse. However, the argument being considered, the source noted, is that benefiting states must be made to pay back the bailout as the fund is not a gift.

    The Lead Director of the Centre for Social Justice (CSJ),Eze Onyekpere,  in a radio programmer monitored yesterday morning in Abuja, urged that the state governments should use their IGR to pay workers salaries and use their monthly allocations to execute capital projects thereby reducing, and at the same time spreading the financial burdens.

    The Nation  reported exclusively yesterday that 27 states have applied to draw from the N300billion approved by President Muhammadu Buhari through the  CBN.

    The facility is one of the three-pronged reliefs designed by the Federal Government to help financially troubled states. President Buhari had early this month approved a three-pronged relief package to end workers’ plight.

    First, the federal and state governments will share $2.1 billion (about N497 billion) sourced from the 2014 Income Tax/Education Tax and dividends paid to the Federation Account through the Federal Inland Revenue Service (FIRS) by the Nigerian Liquefied Natural Gas (NLNG) Limited; Second,  Buhari directed the Central Bank to prepare a special intervention fund that will offer financing to the states.

    The N300 billion, will serve as a soft loan available to states to access and defray the backlog of salaries, and the third package is the instruction to the Debt Management Office (DMO), to help states restructure their commercial loans currently put at over N660 billion, and extend the life span of such loans while reducing their debt-servicing commitments.

  • Bailout funds not from $2.1 billion in ECA, say Presidency, AGF

    Bailout funds not from $2.1 billion in ECA, say Presidency, AGF

    The Accountant-General of the Federation Alhaji Ahmed Idris, yesterday said the bailout funds for states are not coming from the $2.1 billion in the Excess Crude Account.

    He said the cash was sourced from the accrued Company Income Tax (CIT) realised from the Liquefied Natural Gas (LNG)

    He said the funds in Excess Crude Account were intact and the administration of President Muhammadu Buhari was yet to touch it.

    The AGF made the clarification in a statement through Kenechukwu N. Offie, the Head of Press in his Office.

    There have been allegations that the President emptied the treasury to rescue cash-strapped states, which are unable to pay their workers.

    The statement said: “The Accountant-General of the Federation Alhaji Ahmed Idris has noted with great concern that the information in the public domain is inconsistent with the details of the amount distributed at the emergency Federation Accounts Allocation Committee (FAAC) meeting held on Monday 6th July 2015.

    “Consequently, it has become necessary to provide further clarification about the outcome of the said emergency FAAC meeting.

    •That the amount distributed was not from the Excess Crude Account ECA but rather the accrued Company Income Tax (CIT) realised from the Liquefied Natural Gas (LNG) N359, 374,355, 607.60

    •That the amount that was distributed was less the cost of collection

    •The Federal government got 56.68% amounting to N181,745,674,112.72

    •The State governments got 26.72% amounting to N92,183,834,705.62

    •Local government councils got 20.60% amounting to N71, 069,872,564.96.

    “The Accountant-General of the Federation, Alhaji Ahmed Idris, makes this clarification in order to provide Nigerians with the correct and authentic information about the outcome of the proceedings at the Federation Accounts Allocation Committee meeting held on Monday 6th July 2015.

    “The public is also invited to please note that no withdrawal was made from the Excess Crude Account (ECA) and that the current balance still remains $2.1 billion.”

    Also yesterday, the Presidency denied approving sharing of the balance in the Excess Crude Account.

    Special Adviser on Media and Publicity Femi Adesina said: “Reports in sections of the media today that funds will be drawn from the Excess Crude Account for the relief package approved by President Muhammadu Buhari for  states and local governments are incorrect.

    ”For the purpose of greater clarity on the matter, the measures approved by President Buhari to deal with the problem of unpaid public sector salaries in many states are as follows:

    ”•The sharing of the  $2.1 billion dividend paid to the Federation Account by the Nigeria Liquefied Natural Gas Company (NLNG);

    “•A Central Bank-packaged special intervention fund that will offer financing to the states, ranging from  N250 billion  to N300 billion. This will be a soft loan available to states for the purposes of paying backlog of salaries; and

    “•A debt relief programme designed by the Debt Management Office which will help states restructure their commercial loans currently put at over N660 Billion, and extend the life span of such loans while reducing their debt-servicing expenditures.

    “The measures approved by President Buhari definitely do not include drawing down the remaining balance in the Excess Crude Account or the ‘liquidation’ of the account as some media outlets have wrongly reported.

    “No such decision has been taken or approved by President Buhari, and  last week’s meeting of the National Economic Council clearly concluded that the Excess Crude Account  should be left untouched at this time.”

  • APC hails Buhari for ending workers’ misery

    APC hails Buhari for ending workers’ misery

    The All Progressives Congress (APC) has hailed President Muhammadu Buhari for coming to the aid of the long-suffering Nigerian workers with a multi-billion-naira package.

    The party aid the aid  will not only ensure that all arrears of salaries owed by many states across the country are immediately paid, but will also make it easier for the states to meet their monthly salary obligations henceforth.

    In a statement issued in Abuja on Tuesday by its National Publicity Secretary, Alhaji Lai Mohammed, the APC said it was particularly delighted that the President has shown that he is truly the father of the nation by eschewing partisanship in approving the intervention fund for all the states, irrespective of which parties they belong to.

    ”We say this because when states were financially handicapped during the tenure of the last federal government, opposition states were hung out to dry why states belonging to the then ruling PDP got generous bailouts,” it said.

    APC said by his action, President Buhari has practicalized his deep understanding of the essence of governance which, more than anything else, is the about the well being of the citizenry.

    The party said worthy of note and commendation is the fact that the special intervention fund approved by President Buhari was packaged without any external borrowing, despite the paucity of funds occasioned by the fall in the price of crude oil and the unprecedented profligacy of the immediate past administration that dried out the pot of national resources.

    It said so early in the life of his administration, President Buhari is walking his talk by showing that with prudence, financial discipline, plugging financial leakages and a deep sense of patriotism, even the nation’s dwindling resources can still be more effectively utilized for the benefit of Nigerians, rather than be looted by thieving public officials who abuse their office.

    APC described as uncharitable and a clear indication that shame has taken flight the situation in which those who created the rot that is now being cleared by President Buhari are the same ones daring to point accusing fingers at the government that inherited their rot.

    ”The PDP that spent the past 16 years plundering and pillaging Nigeria has boasted that the Nigerian people will soon come, cap in hand, to beg them to return to power. What delusion! What arrogance! Who presided over the looting and the mismanagement of public funds that made it impossible for the nation to absorb the shock of the falling oil prices? Who depleted the Excess Crude Account (ECA) without authorization? Who has degraded the standard of living of Nigerians?” the party queried.

    APC said the multi-pronged package approved by President Buhari includes the sharing of about $2.1 billion sourced from the LNG’s payment to the Federation Account; and a CBN-packaged special intervention fund that will offer financing to the states, ranging between N250 billion to N300 billion, as a soft loan available to states to access for the purposes of paying backlog of salaries.

    Also, the President has approved a debt relief programme that will help states restructure their commercial loans currently put at over N660 billion. The implication is that the life span of such loans will be extended, while reducing the states’ debt-servicing expenditures, thus leaving the states with enough resources – which otherwise would have been removed at source by the banks – to meet their monthly salary obligations, among others.

    ”History is repeating itself before our very eyes. Some 31 years ago, Buhari, then as a military head of state, also inherited a huge national rot similar to what has been bequeathed to it by the PDP, and had to approve 480 million Naira for the payment of arrears of workers’ salaries. Truly, the President is a man of destiny,” the party said.

    It said that with thousands of workers made destitute by the frittering away of the commonwealth under a rapacious and wasteful PDP government now being given a new lease of life, their purchasing power being boosted and the nation’s economy being reflated, the change which the President and his party promised the nation has just begun.

    ”We thank Nigerians for voting the APC into power at the centre and for believing in us even when the horizon became hazy, not out of our making but because of the misdeeds of the past. By their relentless support for President Buhari and the APC, Nigerians have indeed demonstrated that what is worth fighting for is worth defending,” APC said