President Muhammadu Buhari directed the Minister of Finance, Mrs Kemi Adeosun, and the Governor of Central Bank of Nigeria, Godwin Emefiele, on Thursday to immediately release the second tranche of the London-Paris Club loan refund to states. He said the presidential order should be carried out “appropriately and with dispatch.”
According to a statement by his Senior Special Assistant on Media and Publicity, Garba Shehu, the president spoke while addressing a meeting of the National Economic Council at the Presidential Villa, Abuja. The council is made up of state governors and chaired by Vice-President Yemi Osinbajo.
The first tranche of 388 billion naira was released to the state governments in December 2016. President Buhari said the latest release was meant to ease their financial hardship. He also stressed the need for the state governors to ensure the settlement of unpaid salaries and pension arrears of their workers with the funds.
“I will not rest until I address those issues that affect our people.
“One of these basic things is the issue of salaries. It is most important that workers are able to feed their families, pay rent and school fees, then other things can follow,” the president was quoted to have said.
He apologised to the governors for barring them from visiting him while he was in London.
“I didn’t want government to move to London. I wanted it to remain here and I am glad it did,” he said.
The Chairman of the Nigerian Governors Forum, Abdul-Aziz Yari of Zamfara State, assured the President, on behalf of his colleagues, that they would continue to support his policies and actions which they had adjudged as being in the nation’s best interest. The governors of Imo, Akwa-Ibom, Osun and Abia states thanked the president for saving the day for the states through the first tranche of the London-Paris Club loan refunds.
They, however, called for the immediate release of the second one but there are some terms and conditions which must be fulfilled before the state can get the 500 million naira loan refund. It is mandatory for all the states to account for the first tranche of the loan refunds – in line with the agreement, the presidency reached with the Nigerian Governors Forum (NGF). Some governors are being investigated by the Economic and Financial Crimes Commission (EFCC) for allegedly diverting the first tranche of the refund and states implicated in the mismanagement of the first tranche may not get the second tranche.
Before the first tranche was released, the NGF had an agreement with President Buhari that about 25 percent to 50 percent will be used to offset outstanding salaries and pensions. The EFCC’s investigation into the disbursement of the first refunds confirmed that some of the governors were involved in illegal deductions and remittances into NGF account.
Based on the plan by the Federal Ministry of Finance, states will be required to set and meet targets to enhance Internally Generated Revenue (IGR), establish Efficiency Units to reduce overhead costs, privatise State Owned Enterprises, domesticate the Fiscal Responsibility Act and limit bank loans. The Presidency has released 1.266 trillion naira to the states in the past one year including a 713.70 billion naira special intervention fund. As a result of protests by states against over deductions for external debt service between 1995 and 2002, President Buhari approved the release of 522.74 billion naira (first tranche) to states as refunds pending reconciliation of records. Therefore, each state was entitled to a cap of 14.5 billion naira, being 25 percent of the amounts claimed.