Salaries Owed State Governors to be Paid, Soon.

President Buhari

President Muhammadu Buhari on Monday ordered that the foreign reserve account be opened, proving multiple intervention packages totalling N1.2 trillion to help bankrupt states pay workers owed for several months.

At least 12 of the 36 states of the federation are believed to own their workers over N110billion in salaries and allowances.

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The worst hit states are Osun, Rivers, Oyo, Ekiti, Kwara, Kogi, Ondo, Plateau, Benue, and Bauchi states.

First, according to the officials who spoke on the condition of anonymity, the federal and state governments will share another $2.1 billion (about N497 billion) sourced from recent LNG proceeds to the federation account.

Second, Mr. Buhari has directed the Central Bank to prepare a special intervention fund that will offer financing to the states. The package, between N250 billion and N300 billion, will serve as a soft loan available to states to access to defray backlog of salaries.

The Excess Crude money, LNG funds and the CBN loan, total N1.2 trillion, at Monday’s official exchange rate of N236.50 to $1.

Third, the president also approved a debt relief program 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.

This third option will free up more money currently being used for debt servicing. Our sources said the federal government will sway its financial muscle to guarantee the elongation of the loans in the benefit of the states.

They said the options, considered at the National Economic Council, NEC, last week, is designed specifically for workers.