Skip to main content

FG Has Provided N1.75tn Extra-statutory “bailout” Fund To States – Budgit


According to BudgIT research, N1.75tn has been given to states as extra-statutory allocation known as bailout since the advent of President Buhari’s administration.

In 2015, a Salary loan of about N338bn was disbursed to states. The term of the loan was 20-year and the purpose of the loan was to help states facing fiscal strain meet outstanding salary obligations. Interest rates of 9% approved by the Central Bank of Nigeria (CBN).

This was swiftly followed by the N575bn restructuring programme bond. The federal government negotiated this debt package through the Debt Management Office to allow states convert high interest bank debt into a 20 year tenured debt with interest rates set at 14.83%.

With the exception of Ogun state, 23 states were immediate beneficiaries. However, the actual sum disbursed was not made public. Again, In July 2015, the federal government remitted approximately N92.18bn to States from dividends worth $2.1bn paid to the centre by Nigerian Liquified Natural Gas Company (NLNG).

Barely a year later, the sum of N7.85bn was also approved by the federal government to assist states with revenue short falls in January 2016 from the dividend remitted by NLNG.

In July 2016, the federal government endorsed the allocation of N3.6bn from solid minerals savings to states as part of the routine monthly FAAC disbursements.

A total of N117.3bn was also disbursed to states, amount taken from excess revenue generated from Petroleum Profit Tax (PPT). Ordinarily, this should go into the Excess Crude Account, but it was speedily distributed between the federal and state governments.

In all, a total of N1.75tn has been disbursed to states as extra-statutory fund but little is known about how the funds had been spent. The latest amount released is the N522.74bn refund to states for surplus deductions of external debt servicing fees between 1995-2002.

The lack of will to encourage states to embrace transparency and the inability of the federal government to enforce conditions that mandate states to articulate their policies and submit to standardised performance indicators has ensured that governors merely sit back and routinely await the discovery or refunding of money into the treasury, and immediately seek their share. BudgIT had previously sent Freedom of Information Request to Central Bank of Nigeria and no adequate response was provided.

It is observed that the Federal Government seems to have adopted a reductionist approach to the States; often basing its release of funds on a need to offset recurrent expenditure at sub-national level.

To discontinue this tradition and ensure funds are used efficiently, the allocation, utilization and spending of public funds should be transparent, coordinated and discreet. BudgIT calls for an holistic and comprehensive audit of the funds disbursed so far.

http://www.vanguardngr.com/2017/04/fg-provided-n1-75tn-extra-statutory-bailout-fund-states-budgit/
Post a Comment

Popular posts from this blog

U.S. Military Helicopter Crashes In Iraq On Thursday, Killing 7 People On Board

One of the U.S. military helicopter in Iraq has crashed after hitting a power line in Iraq's western Anbar province, killing all seven personnel aboard.

According to a statement from Pentagon this morning, the officials said the crash of the HH-60 Pave Hawk helicopter occurred Thursday afternoon near the town of Qaim.

"All personnel aboard were killed in the crash," Brig. Gen. Jonathan P. Braga, director of operations, Combined Joint Task Force - Operation Inherent Resolve, said in a statement.

"This tragedy reminds us of the risks our men and women face every day in service of our nations," he said. "We are thinking of the loved ones of these service members today."

The statement further said;

Wife Of Donald Trump Junior Files For Divorce

(Reuters) - The wife of Donald Trump Jr., the eldest son of U.S. President Donald Trump, has filed for divorce in New York, according to court records.

Vanessa Trump, a former model and actress, and Trump Jr. said in a joint statement on Thursday: "After 12 years of marriage, we have decided to go our separate ways."

The statement was provided by the Trump Organization, the president's business empire, which his son helps manage.


Further details were not immediately available on the uncontested divorce filing by Vanessa Trump in a New York state court. She and Trump Jr. have "enormous respect" for each other, according to the joint statement, which also asked for privacy.

Prison Officers Secretly Move Charles Okah To Borno Prisons After Life Sentence

Charles Okah, the brother of the leader of the Movement for the Emancipation of the Niger Delta (MEND), who was given a life sentence for terrorism, has been secretly moved from Kuje Prisons, Abuja, to one of the prison facilities in Borno State, THISDAY has learnt.

Worried about his seeming familiarity with the prison environment and the officers at the Kuje Prisons, the authorities of the Nigerian Prison Service (NPS) last Tuesday transferred him quietly.