Nigeria governors have demanded an audit of money owed to states by the Federal Government as a condition for repayment of the N614 bailout fund.
The Chairman of Nigeria Governors’ Forum (NGF) and Governor of Ekiti State, Dr. Kayode Fayemi, who stated this at the end of their meeting on Wednesday night in Abuja, said while they are not averse to repaying budget support facility advanced to 35 states, they however have a duty to ensure a reconciliation of account as far as monies owed to states may be concerned.
According to him, governors were ready for the loan repayment after proper reconciliation of accounts, saying “If you borrow, you pay.
“Governors have never been averse to payment of loans that we took under legal environment and we don’t want a situation that our banking system and financial system will be in any jeopardy.
“However, governors believe that just as we are ready to pay, we also have a duty to ensure reconciliation of account as far as money owed to states may be concerned. That is the process that is ongoing.”
It would be recalled that the Minister of Finance, Budget and National Planning, Zainab Ahmed, had at the Public Consultation Forum on the draft 2020-2022 Medium Term Expenditure Framework, in Abuja, said the deductions will begin in two weeks, which falls on September 27th.
She further explained that the federal government gave the conditional budget support facility to the states through the Central Bank of Nigeria (CBN), in 2017, to enable the states to meet their financial obligations to civil servants and pensioners.
The money was provided at a nine per cent interest rate, with a grace period of two years.
Ahmed had said the repayment will be taken from the affected states’ allocations during the next Federation Accounts Allocation Committee (FAAC) meeting this month, adding that the refund is not going to be treated as revenue to be used to fund the 2020 budget.
According to her, “It was a loan that was advanced by the Central Bank of Nigeria to the states.”
She added that because the payment was made by the CBN, the recovery process is for the loans to be deducted from the FAAC allocations of the states and remitted back to the CBN.
She said: “The process will not require a consideration of the fiscal strategy paper (FSP) implementation, but to ensure the states stayed on the path of fiscal sustainability.
“This will not be a condition for the deduction. We will deduct direct at source and remit to the CBN.”
The governors in attendance includes; Babajide Sanwo-Olu (Lagos), Samuel Ortom (Benue), Bala Mohammed (Bauchi), Siriake Dickson (Bayela), Abubakar Badaru, (Jigawa), Ifeanyi Okowa (Delta), Emeka Ihedioha (Imo), Seyi Makinde (Oyo), Dapo Abiodun (Ogun), Aminu Masari (Katsina), Abdullahi Ganduje (Kano) and Bello Matawalle (Zamfara).