…Directs CBN to package over ₦250B special intervention fund for states
In his resolve to end the lingering crisis of unpaid workers’ salaries in the country, especially in several beleaguered states, President Muhammadu Buhari on Monday approved a comprehensive three-pronged relief package.
These are:
* The sharing of about $2.1B in fresh allocation between the states and the federal government. The money will come from recent LNG proceeds to the federation account.
* A Central Bank of Nigeria-packaged special intervention fund that will offer financing to the states, ranging from between N250B to N300B. This would be a soft loan available to them to access for the purposes of paying the backlog of salaries.
*A debt relief program designed by the Debt Management Office (DMO), to help states restructure their commercial loans currently estimated at N660B and extend the life span of such loans while reducing their debt-servicing expenditures.
This third option, by extending the commercial bank loans of the states, would make more funds available to the state governments that would otherwise have been removed at source by the banks. The federal government will sway its financial muscle to guarantee the elongation of the loans for the benefit of the states.
Informed government sources explained over the weekend that this package, which was considered at the National Economic Council (NEC), last week, was designed specifically to bring relief to government workers, some of whom have not been paid for over 10 months.
Contacted on Monday, presidential spokesman Femi Adesina confirmed the special package for the workers, adding that the president was deeply concerned about their plight.
Speaking at the inauguration of the NEC last week, President Buhari asked the Council, which is a constitutional advisory body to him, to consider as a matter of priority how to liquidate the unpaid salaries of workers across the country, noting the untold hardship it has brought to them.
While the over $2B which is being sourced from LNG proceeds to the federation account would be shared among the states using the revenue allocation formula, the CBN will also make available the special intervention fund to states and then negotiate the terms with individual states.
The package that has now been approved by President Buhari is expected to go into effect this week as he is said to have directed a swift release of the funds.
At the NEC meeting, the relief measures were extensively discussed between the state governors and top officials of the federal government, including the CBN governor and the Permanent Secretaries of the Ministries of Finance and Petroleum Resources.
Other agencies that were actively involved in the process include the DMO and officials from the Office of the Accountant General of the Federation.
Media reports last month say no fewer than 12 of the 36 states of the federation are facing difficult times as the salaries they owe their workers are approximately N110bn. They include the debts being owed by the governments of Osun, Rivers, Oyo, Ekiti, Kwara, Kogi, Ondo, Plateau, Benue, and Bauchi states.
Informed sources said the Finance Ministry and the CBN may have pegged the amount needed to settle all the outstanding public workers’ salaries at about N250B.
There are also employees of the federal government whose salaries are back logged; the package is expected to address those cases as well. Experts say this presidential bailout to the workers will boost the purchasing power of a good percentage of the Nigerian consumers and thereby reflate the economy.
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