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States To Begin Palliative Loans Repayment Dec, FG Gives Three Month Grace

States to begin palliative loans repayment December 2023 after the Federal Government has given a three-month grace to effect the process.

Published

2 years ago

August 24, 2023

VerseNews

President Bola Ahmed Tinubu and his Ministers

Fresh subsidy palliative loans may drive 36 states’ borrowing from the Federal Government to N1.34tn.

The debt under the budget support facility of the Federal Government included a N614bn debt as of 2019, another debt of N656bn in 2021, and a fresh N69.12bn debt as subsidy palliative this year.

This debt is likely different from states’ domestic debt of N5.48tn as of March 2023 and external debt of $4.4bn as of December 31, 2022, as recorded by the Debt Management Office.

VerseNews reports that a statement signed by the Director-General of the Nigeria Governors Forum, Asishana Okauru, said the offer is “optional” and urged states who are not interested to refund the N2bn already disbursed to them.

“Your Excellency is invited to note that this offer is optional and states that do not wish to participate may opt out and refund the N2bn already disbursed to them.”

According to the terms of the facility, contained in the memo to the governors, a total of N4,000,000,000.00, will be disbursed as follows: Loan (48 per cent)- N1,920,000,000.00; FGN Grant: (52 per cent) N2,080,000,000.00; Beneficiary: each state government; repayment period: 20 months.”

The facility which carries a moratorium of three months, is also interest-free, while a monthly deduction of N120,000,000.00 after three months applies.

The Chairman of the Nigeria Governors’ Forum and Governor of Kwara State, AbdulRahman AbdulRasaq, confirmed the receipt of N2bn of the N5bn announced by the Federal Government.

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The NGF chairman said, “We have received N2bn out of the N4bn relief funds that the Federal Government released to states for the purchase of rice to be distributed en masse to vulnerable members of the public to cushion the effects of fuel subsidy removal.

“We await a balance of N2bn of the funds as well as N1bn worth of maize (40,000 bags) which the Central Bank of Nigeria is selling to each state from the national strategic reserve.”

“It is, however, important to mention that 48 per cent (N1,920,000,000.00) of the N4bn is a non-interest loan that will be paid back over a period of 20 months at N120,000,000.00 monthly.
“Consequently, I have ordered the immediate purchase of rice in the value of the amount.”