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Federal Government has granted requests by state governments to defer loan deductions from their share of revenue from the federation account.
Minister of Finance, Kemi Adeosun, disclosed this while briefing State House Correspondents after the National Economic Council, NEC, meeting presided over by Vice President, Yemi Osinbajo, at the Presidential Villa.
According to her, the decision to defer the loan deductions was as a result of the fall in the price of crude oil, which also affected revenue due to states.
Adeosun stated that this approach would enable the states to meet up with the payment of workers’ salaries and pension.
The minister said: “There is an update on the financial situation in the states. It was discussed extensively that currently the federation accounts receipts are among the lowest that have been seen in recent times.
“We are looking at N299bn this months and that is because of the very low oil prices recorded in February and January. “If you remember, oil prices went as low as $28 and $31. As a result, I made an approach to the President at the behest of the state governors that we defer the loan deductions from the federation accounts entitlements and the aim of this is to ensure that we support the states through this difficult period to be able to meet salary obligation.
“The government is very committed to stimulating this economy and the government recognises that the ability of states to meet salary obligations is very important to getting the economy moving again, and so to that end, the President approved that deferral.” She said states had been asked to submit financial data that would allow the Federal Government to model and predict the level of support in terms of loan deferrals until the economy began to recover.
The minister stressed that the deferral on loan deduction was not a bailout to states, but to allow the system to give cash to them to meet their salary obligations. She also disclosed at the briefing that a report of the balance of the Excess Crude Account, ECA, which stands at $2.3bn, was presented to the council as well as the interest that had been received. Also at the briefing, Nasarawa State Governor, Umaru Al-Makura, disclosed that NEC endorsed the reconstituted Board of Niger Delta Power Holding Company, NDPHC, to facilitate effective distribution of electricity across the country.
Al-Makura also said the Central Bank of Nigeria, CBN, governor gave an update on states that had been able to access the bailout, which was put at N689.5bn. Corps Marshal of the Federal Road Safety Commission, FRSC, Boboye Oyeyemi, at the briefing said Council also approved the Nigerian Road Safety Strategy document of 2014-2018.
He said the document would address the current overlaps, streamline the roles and responsibilities of all participants in order to maximise the benefits of investments in road safety management activities.
