The National Economic Council (NEC) says there is an agreement with the Central Bank of Nigeria (CBN) to commence deductions on the $2.1 billion budget support facility that was granted to the states by the Federal Government from this month.
This is as the CBN has, however, agreed to provide a bridge financing facility to the states due to the current economic challenges facing the states.
This disclosure was made by the Governor of Nasarawa State, Abdullahi Sule, while briefing State House correspondents after the virtual NEC meeting presided over by Vice President Yemi Osinbajo on Thursday at the Presidential Villa, Abuja, according to NAN.
What the Governor of Nasarawa State is saying
Governor Sule said, “On the budget support facility that was taken by the states, in view of the current economic challenges facing the states, the CBN actually has gone into some kind of agreement to provide a bridge financing facility to the states so that deduction can commence in this July.
“This is actually to keep the accounts current and to ensure that the commercial banks which have given these loans are able to keep their books.’’
The governor said NEC also received presentations from the Group General Manager of NNPC about the current situation of the oil and gas sector.
He said that the presentation was specifically as it affected the consumption of Premium Motor Spirit, popularly known as petrol in Nigeria.
He said, “This is a product that is highly regulated in the Nigerian market and the current consumption is actually sitting at over 60 million liters per day and this is the total amount that is being subsidised on a daily basis.
“And that is eating very deeply to the financials of NNPC; to the point where NNPC is unable to meet up with several of its obligations. As a result of that, the council actually set up a committee which is being chaired by Gov. Nasir El-Rufai of Kaduna State.
“So, today at the council, the committee was able to present its report and during the presentation, council extensively discussed the issues on the report and the council still believes that the committee needs to do additional work.’’
What you should know
- It can be recalled that the Federal Government through the CBN between 2015 and 2016 provided budget support facilities to the various state governments in the wake of the economic crisis with most of them unable to pay the salaries of their workers.
- The States had been lobbying for deferment of payment until when Edo State Governor, Godwin Obaseki, accused the apex bank of printing naira to shore up the shortfall.
- However, in April 2021, the CBN Governor, Godwin Emefiele, in reaction to claims by Obaseki that the Federal Government had printed an additional N60 billion to augment allocations to the state governments, demanded the repayment of the facility.
- Emefiele who denied Obaseki’s claim said it was time for states to start repayment of the facility since some of them are now accusing the apex bank of giving them loans.
- The state governors lobbied again to extend the time while Emefiele insisted. This led to the issue being referred to NEC for intervention.