7 Jul 2015

President Buhari approves N413.7billion bailout for unpaid workers’ salaries

In his resolve to end the lingering crisis of unpaid workers’ salaries in the country, especially in several states of the federation, President Muhammadu Buhari has approved a comprehensive relief package designed to salvage the situation.

In addition to the direct cash bailout, the three tiers of government will be sharing $1.7 billion from the Excess Crude Account (ECA), effectively emptying the account meant to shield the economy from exogenous shocks.

Opening up on the assistance to be rendered to the states, a source in the presidency said the president approved a three-pronged relief package that would end the workers’ plight nationwide.

He said this entails: The sharing of about $2.1 billion (N413.7bn) in fresh allocation between the states and the federal government.
“The money is sourced from recent NLNG (Nigeria Liquefied Natural Gas) proceeds to the Federation Account, and its release was okayed by the president,” the presidency official explained.
The second measure, he said, is a Central Bank of Nigeria (CBN)-packaged special intervention fund that would offer financing to the states, ranging from between N250 billion and N300 billion.

This would be in the form of soft loans available to states to access for the purposes of solely paying the backlog of salaries, he added.

The third measure is a debt relief programme proposed by the Debt Management Office (DMO) which will help states restructure their commercial loans currently put at over N660 billion and extend the tenure of the loans to 15 years, thereby reducing their debt service obligations.

This third option would by extending the commercial loans of the states, make more funds available to the state governments which otherwise would have been removed at source by the banks.

The presidency official noted that the federal government would guarantee the extension of the loans for the benefit of the states.

Credit: ThisDay

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