It however maintained that putting on hold deductions from the monthly allocations to states in respect of repayments for their salary assistance loans should not be mistaken for a bail-out.
Vice President Yemi Osinbajo this measure during the 66th meeting of the National Economic Council, NEC in Abuja.
He said that President Muhammadu Buhari had approved the suspension of the deductions from the allocation for March 2016, explaining that the presidential gesture was to give states that benefited from the loans a breather, as they continue to grapple with recent pressures on their finances in the face of dwindling monthly revenue allocations as a result of declining global oil prices.
Online news platform, PREMIUM TIMES reports that the Central Bank of Nigeria, CBN governor, Godwin Emefiele, had told the Council that about N689.5 billion had so far been disbursed as salary assistance loans to the benefiting states, while additional N310 billion was disbursed as Excess Crude Account-backed loans.
But, at the Federation Accounts Allocation Committee, FAAC, meeting, representatives of the 36 states governments went home sad, as they were handed parlous shares from a total N299.75 billion statutory allocation for the month, the lowest allocations in more than five years.
Details of the allocations showed that the states, which took home about N64.52 billion in February, were to share only N55.34 billion, representing 26.72 per cent of the total revenue for the month.
The Federal Ministry of Finance said on Thursday that the lean revenue allocation was not only as a result of the crisis in the global oil market, but also a reflection of the seasonally low collection period for the Federal Inland Revenue Service, FIRS.
At the moment, the ministry said at least 27 states were struggling to meet their obligations, particularly to their workers, most of who have had to go for several months without salary.
Minister of Finance, Kemi Adeosun said the deferment of a total of N10.9 billion obligatory repayments due to the Federal Government from the states in respect of their restructured loan obligations was informed by this reality.
“We (federal government) are not able to guarantee that all states will be able to meet their salary obligations, as each state’s situation is dependent on its own cost profile and other obligations it may have, but this initiative is to better position them to do so,” the minister explained.
Although all states would benefit from the relief package for March, Mrs. Adeosun said any further deferrals would be subject to the agreement of a Fiscal Restructuring Plan to be prepared by each state with clear measurable objectives.
She said her ministry was keen to ensure that the programme of financial discipline by the federal government was replicated in all tiers of government, including elimination of payroll fraud and increased efficiency in spending overheads.
“Enhanced financial transparency by the publication of audited accounts and submission of debt profile may also be required. Moving states towards fiscally sustainable practices is a key objective of the federal government to ensure that Nigeria recovers from the current economic challenge,” the minister explained.
PHOTO: KEMI ADEOSUN.
CREDIT: PREMIUM TIMES
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