Buhari okays N400bn bailout for unpaid salaries

President Muhammadu Buhari has approved more than N400 billion as an intervention fund to end the lingering crisis of unpaid workers’ salaries in about 18 states of the federation.

According to Channels Television, the relief package also includes about N300 billion soft loan for states for the purpose of paying the backlog,

About $2.1 billion of the money was said to be sourced from the recent Liquefied Natural Gas proceeds to the federation account.

The Central Bankof Nigeria-packaged special intervention fund that will offer financing to the states, ranging between N250 billion to N300 billion, is also 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 programme proposed by the debt management office, which will help states restructure their commercial loans currently put at over N660 billion 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, Godwin Emefiele, governor of CBN, informed state governments that the federal government was worried about the inability of some states to meet their obligation to their workers.

He noted that the inability of most states to pay salaries was due to the huge debt.

“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,” he said.

Emefiele  also informed the states that the apex bank was willing to assist them in restructuring their indebtedness to commercial banks.

He directed the affected states to submit the list of their loan obligations and other indebtedness to the CBN on or before July 8 to enable the apex bank assist them restructure the loan to a long tenure.

Emefiele explained that the assistance by the CBN was in the form of concessionary rates to the interested states, adding that the CBN would schedule a meeting with the states upon receipt of the required data.

He expressed optimism that the process would be completed before the coming week, and advised recipients of the CBN loans to prioritise salary payment before other obligations.