Ebonyi, Osun, Niger get N43b CBN bailout loans ….. NATION

Ebonyi, Osun, Niger get N43b CBN bailout loans

Tanks have credited three more states with the bailout loans they applied for to enable them to pay workers’ outstanding salaries.

Sources at the Central Bank of Nigeria (CBN), which guaranteed the loans, told our correspondent in Abuja that Osun, Ebonyi and Niger states had cleared the hurdles.

Other states will get their own loans as soon as documentation is perfected.

Twenty-seven states are to get N338billion as loans to be repaid over 20 years at nine per cent interest. The loan is basically to enable them pay the outstanding workers’ salaries.

Osun’s share is N34.988billion. Ebonyi’s is N4.063b and Niger has N4.306b.

Kwara and Zamfara states were the first set of states to receive their loans.

The CBN source said “documentation from other states is being finalised before the release of the loans”.

As part of the conditions, each state government is to negotiate an agreeable interest rate with its bank, but the CBN has provided a soft landing for the states to repay the loans in 20 years just like the restructured commercial debts the Debt Management Office (DMO) converted to local bonds to help the states reduce their debt-service outflow and free resources for meeting other obligations, particularly arrears of salaries and pensions.

Last week, the CBN approved that Deposit Money Banks (DMBs) should lend money to some states to pay salary arrears owed their workers.

The CBN said it granted the approval following the request by DMBs “to provide financial accommodation to state governments to enable them pay the backlog of salaries of their workers.”

The conditions for accessing the loan facility from the designated 14 banks include: *resolutions of the State Executive Council authorising the borrowing and state House of Assembly consenting to the loan package; and

*issuance of Irrevocable Standing Payment Order (ISPO) to ensure timely repayment.

The  SPO indicates “that the facility is not free, the states’ financial exposures to the banks becomes first line charges that will be deducted from their monthly allocation from the federation account as a result of the ISPO”.

The CBN official explained that specific figures were attached to the facilities to be disbursed to the state governments because “every state is to come up with its specific needs in order to access the facility from the commercial banks. They’re (states) working out what they need from the banks according to the conditions they reached with the banks.”

An Osun State source said yesterday that the loan “is being expected to drop either today, Friday or on Monday.”

He said workers’ salaries would be fully taken care of.

Ebonyi State Commissioner for Finance Dennis Ekumankama said yesterday afternoon that he was still expecting the loan to “drop” into the account.” The state is expecting N4.063b.

He said: “I came back from Abuja yesterday pursuing the approvals but we are hoping it will be given. Not yet as at today”

Oyo State Governor Abiola Ajimobi, who is optimistic that the state’s N26.606b request would be released next week, said: “We’ll pay all outstanding salaries by the end of this month.”

He spoke at the event marking the centenary posthumours birthday of the late First Republic Ibadan politician Adegoke Adelabu.

He added that the state will improve upon its internally generated revenue.

But the Kwara State Government said yesterday that it had not got the full complement of the loan. Kwara is to receive  N4.320b.

A statement by Senior Special Assistant on Media and Communications, Dr. Muyideen Akorede, said although the state had paid arrears of workers’ salaries, that of the local governments was yet to be released.

The state government called on primary school teachers and other local government workers as well as pensioners to exercise patience as the government is doing everything possible to accelerate the payment.