N614bn bailout loan: FG to start deducting funds from states' allocations in September 2019
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N614bn bailout loan: FG to start deducting funds from states' allocations in September 2019

- Finance minister, Zainab Ahmed, said FG will start recovering N614 billion bailout fund loaned to the state governments this month

- Ahmed said the fund will be recovered directly from states' monthly Federation Account Allocation Committee (FAAC) disbursements

- The finance minister added that the recovered funds will be remitted to the central bank

The federal government will commence recovering the N614 billion bailout fund loaned to the state governments this month, September, according to a report filed by The Nation.

The newspaper reports that the minister of finance made the disclosure while presenting the draft 2020 to 2022 Medium Term Expenditure Framework and Fiscal strategy Paper on Tuesday, September 10.

The finance minister, Zainab Ahmed, explained that the funds will be deducted from states' monthly Federation Account Allocation Committee (FAAC) disbursements.

Ahmed added that the recovered funds will be remitted to the Central Bank of Nigeria (CBN), adding that the remittances will start with the next FAAC disbursement which will hold in two weeks time.

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"We will deduct direct at source and remit to the CBN,” the finance minister was quoted to have said.

“The N614 billion bailout funds to states is not going to form part of the revenue for funding the budget, it was a loan which was advanced by the CBN and the repayment will be made to the CBN,” she added.

Recall that the federal government had said in August that a committee had been set to facilitate recovery the bailout loan which was given to 35 states.

The states received the fund between 2015 and 2017 when they were facing financial crisis and were unable to pay workers' salaries.

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However, Legit.ng previously reported that state governors were panicking over the federal government's stance and had started looking for ways to get more time before repaying the loan.

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An aide to one of the governors in the southwest, who asked not to be named, said the governors had agreed to address the issue collectively under the canopy of the Nigeria Governors’ Forum.

He said the governors want the federal government to give them more time to pay the loans.

“But what I can tell you, is that the governors are holding a series of meetings, especially with the Vice President, Yemi Osibanjo. They are basically asking that they should be given more time to pay the loans,” the aide was quoted to have said.

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Source: Legit

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