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 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.
NEC further directed that the Committee on ECA should work with the Accountant General’s office to resolve the gaps observed in the presentation.
Briefing journalists after the meeting, Lagos state Governor, Akinwunmi Ambode, alongside governors of Kebbi, Plateau and Enugu states, said NEC also resolved that all states should find ways to reduce their cost of governance.
“So it is left for the states in their respective situation to find the different ways of cutting cost but what is important is that we cannot continue with the kind of huge burden or huge cost we are apply to run our government,” said Mr. Ambode. “A situation where you are having a huge percentage of your budget as recurrent expenditure is obviously not acceptable. And you must look for ways in reducing the cost of administration in the various states.”
On the submission of the probe report by the four-man committee, Mr. Ambode said the committee was yet to submit its report as it was still working on it and “we believe very strongly we will get that report in the next meeting.
“The Committee is yet to submit it’s report, is still working on it and we believe very strongly we will get that report in the next meeting.”
At its inaugural meeting in June, the NEC had set up a four man committee consisting governors of Kaduna, Akwa Ibom, Edo and Gombe to comb the books of the NNPC, Excess Crude Account as well as the federation account.