The Central Bank of Nigeria (CBN) said Wednesday that it had disbursed funds to two states – Zamfara and Kwara – that met the requirements for bailout funds as agreed with their respective bank. This is out of the 27 states that showed earlier interest.
In a statement, the CBN said it had approved the request by Deposit Money Banks (DMBs) to provide financial accommodation to state governments to enable them pay the backlog of salaries of their workers.
The CBN said it would make efforts in the coming days to conclude disbursements to other states, so that all outstanding salaries to civil servants could be cleared.
The approval is sequel to the decision by the National Executive Council (NEC) at its meeting of June29, 2015, requesting the CBN, in collaboration with other stakeholders, to appraise and consider ways of liquidating the outstanding staff salaries owed by state and local governments.
The conditions for accessing the loan facility include resolutions of the State Executive Council authorising the borrowing and State House of Assembly consenting to the loan package, as well as issuance of Irrevocable Standing Payment Order (ISPO) to ensure timely repayment.
It would be recalled that following announcement of the bailout package by President Muhammadu Buhari, the CBN had given states till July 8 to submit the list of their loan obligations and other indebtedness to enable the apex bank assist in restructuring them to a long tenure.
The CBN governor, Godwin Emefiele, had indicated the apex bank’s willingness to assist indebted states in restructuring the loans owed the commercial banks and directed them to submit details to the CBN, on or before today.
The CBN assistance is coming in the form of concessionary rates to the interested States and is part of the comprehensive N713.7billion bail out package by the President Buhari government to help most of them pay workers salaries owed for months.
The bail out package includes N413.7billion special intervention funds and the balance of about N250billion to N300billion, basically soft loan to states.
