The federal ministry of finance has announced that it has started giving out the promised loans to 35 states who applied and qualified.
The first tranche of the loan is NGN50 billion to be shared among 35 states who applied for the loan. It would be recalled that Kemi Adeosun, the federal Minister of Finance had said that the facility was not a grant but loans secured from the private sector who will be paid back with interests.
Prior to the approval of the bond loan, the federal government had drafted a 22-point requirements called the fiscal responsibility plan. States who will collect the loan are required to meet the requirements.
Most Nigerian states except Lagos and relatively Rivers state are not financially buoyant.
States are required to Publish audited annual financial statements within nine months of financial year end. Comply with the International Public Sector Accounting Standards (IPSAS). Publish state budget online annually. Other requirements are aimed at ensuring states payback the loan and run and do run a buoyant government.
Confirming the development, Festus Akanbi, Media Adviser to the Minister of Finance said “The disbursement of the budget support facility to states has started. Disbursement started in June and has been made to some of the 35 states that applied. Only one state which is Lagos State did not apply for the loan.
“Why we started in June was because of the precarious situation in which many of the states found themselves. There have been complaints about non-payment of salaries and there is no way we can just sit back and watch while workers continue to suffer.
“We have started monitoring the states based on the milestones that they are to achieve before further disbursements would be made. You know that there were conditions that were given to them before they could get more money.
“As soon as any state meets its threshold, that state would get additional funding but any state that fails to meet up with its agreed milestone will not get further disbursement,”
Nigeria states have been under intense financial pressure as the sharp drop in global crude oil price cut federal government revenue, their primary source of income. Most Nigerian states except Lagos and relatively Rivers state are not financially buoyant.
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