The federal government has approved N656 billion as fresh loans for the 36 states of the country.
Details of the loan as announced at the National Executive Council (NEC) meeting show that each state will receive N18.2 billion.
This is in furtherance of efforts by the federal government to help states meet their financial obligations.
Spokesperson to the vice-president, Laolu Akande, in a statement, said the loan will be released in six tranches over a six-month period, with a 30-year tenor, and a 2-year moratorium at an interest rate of 9 per cent.
“In a bid to help state governments meet financial obligations, especially the previous budget support facility due for repayment, President Muhammadu Buhari has approved a fresh N656 billion Bridge Financing Facility to the 36 States. Each State would receive N18.2B,” the statement read.
It quoted the Minister of Finance Budget and National Planning, Dr Zainab Ahmed, to have informed the Council that the Bridge Facility is now being processed by the Central Bank of Nigeria (CBN) and that the facility is to help the states afford the repayment of previous bailout facilities guaranteed for them by the Federal Government,” Ahmed.
In 2017, the federal government extended the conditional facility to states through the CBN to help cushion the impact of dwindling resources and help meet their various obligations and at the expiration of the two-year grace period, the deductions were suspended for one year to enable states stabilise their finances, following the outbreak of the COVID-19
pandemic.
Earlier this year, precisely in May, the CBN had requested states to start repayment of the previous bailout fund, but the governors asked for a postponement.
However, in July, the CBN and state governors agreed to start deductions of the budget support facility.
Akande said in the statement that following the July agreement between the governors and the CBN, “the States sought further support leading to the idea of bridge financing.”
