As part of bailout for financially ailing states, the Central Bank of Nigeria has restructured existing bank loans owed by state government from a short term repayment period of about seven years to a minimum of 20 years.
Bank loans acquired for salary arrears will
also be extended to a minimum of 15 and not more than 20 years.
The CBN governor, Godwin Emefiele, announced
the apex bank’s restructuring at the National Economic Council Meeting.
A four-man probe committee, which was
constituted at the NEC’s inaugural meeting in June to review the books of the
NNPC, Excess Crude Account as well as the federation account, failed to submit
its report at the almost five hours meeting.
The NEC also admonished state governors to
find ways of reducing their cost of governance.
The NEC was chaired by Vice President Yemi
Osinbajo.
Governors of the 36 states and Permanent
Secretary (or Minister) of the Federal Capital Territory, are members of NEC,
which is the highest economic advisory body to the President on the economic
affairs of the nation.
The state governors had in June while seeking
bailouts tabled some requests before President Muhammadu Buhari. The governors requested amongst
others an extension of repayment periods of loans’ balances owed by states from
durations normally between four and seven years to 20 years.
A working document of the council, obtained by
journalists after the meeting, showed that NEC received a presentation from the
CBN governor on the update of restructuring of bank loans for the states and
payment of salary arrears.
Mr. Emefiele told the council that following meetings
with banks, it was agreed that existing loans should be restructured for a
minimum of 20 years, while salary arrears should also be restructured for the
minimum of 15 years and not exceed more than 20 years.
States could opt for two options: the bond
option, which will attract market rate, and the debt restructuring option,
which will attract single digit rate.
The council resolved that a four-man team made
up of the governors of Bauchi, Rivers, Ondo and Osun states, are to follow up
with the CBN to ensure that the issues of Excess Crude Collateral for the states
are sorted out by next week Tuesday.
The NEC was also briefed by the permanent
secretary, Federal Ministry of Finance, Anastasia Daniel-Nwaobia, on the Excess
Crude proceeds.
The document said the permanent secretary took
the council through the summary of inflow and outflow of Excess Crude Savings
account from January 2011 to 21 July 2015.
“According to the Perm Sec, the ECA currently
stands at $2.078 billion,” it said.
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