Nigeria’s President, Muhammadu Buhari, has approved over 400 billion Naira as an intervention fund to end the lingering crisis of unpaid workers’ salaries.
The relief package also includes about 300 billion Naira soft loan for states to access for purpose of paying backlog.
About $2.1 billion (413.7 billion Naira) of the money was said to be sourced from the recent Liquefied Natural Gas proceeds to the Federation Account.
Central Bank-packaged special intervention fund that will offer financing to the states, ranging from between 250 billion Naira to 300 billion Naira is another source of the fund, which would take care of the soft loan available to states to access.
Also part of the intervention is a debt relief program proposed by the Debt Management Office, which will help states restructure their commercial loans currently put at over 660 billion Naira and extend the life span of such loans while reducing their debt-servicing expenditures.
At an extra-ordinary meeting of the Federation Account Allocation Committee held on Monday the Central of Nigeria (CBN) Governor, Mr Godwin Emefiele informed State Governments that the Federal Government was worried about the inability of some States to meet their obligation to their workers in the area of monthly wages.
He noted that the inability of most states to pay salaries was due to the huge debt hanging on their necks.
Mr Emefiele said: “Most States take short term loans for long term projects and servicing their monthly obligations to the banks hampers cash flows, thereby restricting them from payment of salaries”.
The CBN Governor also informed the States that the apex bank was willing to assist such States in restructuring the loans owed the commercial banks.
He directed the affected States to submit to the CBN, on or before 8 July, the list of their loan obligations and other indebtedness to enable the CBN assist them restructure the loan to a long tenure.
He explained that the assistance by the CBN was in the form of concessionary rates to the interested States.