Federal Government has deferred a total sum of N10.9 Billion, restructured loan obligations of the 36 states of the federation for the current month.
This is coming on the heels of the sharing of less than N300 Billion at the Federation Accounts Allocation Committee (FAAC) meeting, held yesterday and has seen as the lowest FAAC in over 5 years, in revenue driven by the impact of the historically low oil prices in January and February.
A statement from the office of the minister of Finance, Kemi Adeosun today, Thrusday, said that sum also reflects a seasonally low collection period for the Federal Inland Revenue Service (FIRS).
The statement said that the federal was also informed by the fact that about 27 states are currently experiencing challenges meeting their salary payments.
“This is to ensure that the states are in a better position to meet their salary obligations. We are not able to guarantee that all states will be able to meet their salary obligations, as each state’s situation is dependent on its own cost profile and other obligations it may have, but this initiative is to better position them to do so.
“All states will receive the relief this month. However, further deferrals will be subject to the agreement of a Fiscal Restructuring Plan to be prepared by each state with clear measurable objectives. “The Federal Ministry of Finance is keen to ensure that the programme of Financial Discipline being driven by the FG is replicated in all tiers of government, including elimination of payroll fraud and increased spending efficiencies in overhead.
“Enhanced financial transparency by the publication of audited accounts and submission of debt profile may also be required. Moving states towards fiscally sustainable practices is a key objective of the FG to ensure that Nigeria recovers from the current economic challenges.” [myad]
Home BUSINESS BANKING & FINANCE Economic Crunch: Federal Government Defers N10.9 Billion States’ Debts