Buhari bails out state governors, reflate Nigerian economy with N804.7b ($4.085b)

Reprieve came the way of states and federal government workers who are being owned several months of salary arrears yesterday as President Muhammed Buhari approved the sum of N804.7b ($4.085b) for states to pay their workers. Federal ministries, departments and agencies (MDAs) workers will also get paid from the intervention funds.

Buhari’s relief package is a fallout of indebtedness of states like Rivers, Oyo, Ekiti, Kwara, Kogi, Ondo, Osun, Plateau, Benue, Imo and Bauchi among others. According to media reports, salaries owned amount to N110b ($558.4b) with some states owning their workers more than 10months salary arrears. 

The intervention by the President, according to Aso Villa information came as result of his genuine concern for the plight of unpaid workers in Nigeria.

The relief package among others includes:

N413.7b ($2.1b) special intervention funds, to be sourced from the accruing LNG (liquefied natural gas) proceeds, to be shared between the federal and state governments.

N250-300b ($1.269-$1.523b) soft loans by the Central Bank of Nigeria (CBN).

In addition to the above, the intervention package also assigned the Debt Management Office (DMO) to assist indebted states in restructuring and rescheduling their N600b ($3.05b) worth of  commercial loans.
Read more The President equally stopped deductions from monthly allocations to the states, a debt repayment plan put in place by the previous administration of President, Goodluck Jonathan to commit the states to their debt servicing obligations. 

President Buhari meets with NEC members

Buhari’s bailout funds according to Aso Villa sources, will be begin to flow into the states, ministries, departments and agencies’ accounts this week as ratified by the National Economic Council (NEC) last week. 

The effort of the President to head-off the financial crises facing the states through his N804.b bailout packaged has been commendable greatly but needs to be monitored to prevent the repeat mismanagement experience of the past by the state governors concerned.