The Federal Government’s bid to recover its N614 billion bailout from 35 state governments may not be feasible in the short term.
Most state governors, who are new, claim to be unaware of how the bailout was dispensed while others say their economy is almost at recession level or they are simply cash-strapped.
On August 23, after a National Economic Council (NEC) meeting, the Federal Government ordered that the bailout disbursed to the 35 states under the National Budget Support Loan Facility, be returned due to its own revenue generation challenges.
At the NEC meeting chaired by Vice President, Yemi Osinbanjo, the Federal Government decided that the Ministry of Finance and the Nigeria Governors Forum (NGF) would cooperate with the Central Bank of Nigeria (CBN) to work out a repayment formula.
Minister of Finance, Budget and National Planning, Zainab Ahmed, revealed the resolution after the meeting which held at the Presidential Villa in Abuja.
The minister said each of the 35 states received N17.5 billion as bailout; for urgent needs, including payment of civil servants’ salary arrears and pension settlement of retirees, amongst others.
Meanwhile, the NGF has now set machinery in motion to meet with President Muhammadu Buhari to plead for reprieve.
Head of the NGF’s Media and Public Affairs Secretariat, Abdulrazaque Barkindo, said the governors would meet this month but dismissed inquiries on how states plan to refund their respective bailouts.
“It hasn’t come up at their meeting. They may broach the matter at their September meeting, probably,” he said.
Regardless, some governors may not be disposed to paying back the loan anytime soon as some, who are new, say they were still going through the books with a fine toothcomb and yet to settle down.
Others told Daily Sun the economic climate in their states is harsh and any refund now will simply force them to their knees.
“The terms and agreements of the bailout were spelt out by government when the states were given the loans, but, whether the states are now ready to repay is another matter entirely.
“Look, let’s tell ourselves the ugly truth, not all states can afford to repay the bailout now. Most governors are new, so, they are still looking at the books; to ascertain how the bailout was expended and whether the state coffers, at this time, can withstand paying back any loan now,” an aide to a governor in the South West said, yesterday.
A top civil servant, who works in the state’s finance ministry, in another state in the region, confirmed the NGF’s proposed meeting with the president and added that the bailout refund, as well as the National Financial Intelligence Unit (NFIU) directive would be on the front burner.
“They were supposed to meet with the president last week but he was away to Japan for the 7th Tokyo International Conference on African Development in Yokohama, Japan.
“Many of these governors, at least, 50 percent of them, have said they don’t even know what their predecessors did with the bailout.
“If you ask them to come and pay now, how will they meet their financial obligations to the people they have made election promises to?
“In our own case, a former governor collected the money and promised to offset salary arrears of civil servants. He didn’t. We’re still looking at the books to see where and what projects the bailout was spent on…
“Governors will definitely meet with the president on the matter this week. It is a weighty matter. I know they have met with the president, on NFIU, and this refund is another matter that would be on the agenda.
“We expect that the meeting with the president would provide clearer perspective on how to progress on the matter.
“The mood in the states right now is not favourable to repaying loans; even though the debt ratio varies in the states.
“The NGF would first meet, then, armed with their resolution, proceed to meet with the president on the best possible repayment timeline.”
A senior official from a South South state also dismissed the refund happening anytime soon.
“How can we pay back now? We’ve intellectual money here o! We don’t have physical cash as we have the least allocation in the Federation.
“All we know is that the NGF is handling the matter as a collective.
“You can’t ask me to come and pay back a loan, just like that; not even now that the economy is tilting towards recession.”