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| 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.
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