State governors at the monthly National Economic Council held on Thursday appealed to the Federal Government to postpone the repayment of the $2.1bn budget support facility which was schedule to resume in May.
Reacting to this, Godwin Emefiele of the Central Bank of Nigeria kicked against the appeal and explained the technical challenges inherent in further postponement of the deductions.
The Senior Special Assistant to the Vice President on Media and Publicity, Laolu Akande, disclosed these in a statement issued at the end of the council’s meeting presided over by Vice-President Yemi Osinbajo.
Akande said the Vice President thereafter directed that a meeting be held to iron out all issues and reach logical conclusion.
Recall that for long, states in Nigeria have been depending on Federal allocations for survival and this which as a result on Internally Generated Revenues.
The situation got worse with crash in revenues realised from the nation’s major export – crude oil.
To this end, several states had resorted to borrowing with a recent report by the Fiscal Responsibility Commission indicating that the subnational governments had overstepped their limits.
The report said, “It can be deduced that all the 36 states and the FCT exceeded the Debt Management Office threshold of 50 per cent.
“Lagos State accounted for the highest Debt-to-Total Net Revenue as at the end of 2019, with 712.94 per cent. Osun State came second with 650.94 per cent Debt-to-Total Net Revenue. While Cross River and Ogun States were third and fourth with 597.36 per cent and 402.30 per cent respectively.”
The statement read, “On the budget support facility, finance minister observed that the deductions for repayment by states are meant to resume in May.
“The governors however requested for an extension considering the economic challenges in the states.”
“The central bank governor explained the technical challenges involved should there be a further postponement of the deductions.
“The Vice President then directed that a meeting be held soon after today’s NEC where the issue would be properly considered and a decision reached.
“The VP will chair the meeting and the governors will be represented by Governor Kayode Fayemi, while the finance minister and the central bank governor both of whom attended the meeting today will also participate.”