TVC NEWS [ABUJA] - Nigeria's President Muhammadu Buhari on Monday approved the release of N713.7billion intervention funds for cash strapped states to pay outstanding workers’ salaries.
TVC NEWS reliably gathered that the bailout is part of a three-pronged relief package that will end the workers’ plight.
The package, according to sources, includes N413.7billion special intervention funds and the balance of about N250billion to N300billion, which is a soft loan to states.
Also, N413.7b( $2.1b) is sourced from the recent LNG proceeds and the remaining N300b is a Central Bank-packaged special intervention fund.
Meanwhile, the Debt Management Office(DMO) is expected to assist states to restructure over N660billion commercial loans.
With the development, sources said President Buhari has stopped deductions from monthly allocations to states at source.
Instead, the Federal Government will “use its influence to guarantee the elongation of the loans for the benefit of the states”.
The beneficiaries of the relief package include workers in Federal Ministries, Departments and Agencies(MDAs) who have remained unpaid for many months.
According to sources, the President took the decision to boost the purchasing power of Nigerians, especially average and low-income earners, and to reflate the economy.
The sources said: “In his resolve to put an end to the lingering crisis of unpaid workers’ salaries in the country especially in many states, President Muhammadu Buhari has approved a comprehensive relief package designed to save the situation.
“Specifically, the President has okayed a three-pronged relief package that will end the workers’ plight.
These are:
•The sharing of about $2.1b (N413.7bn) in fresh allocation between the states and the Federal Government. The money is sourced from recent LNG proceeds to the federation account, and its release okayed by the President;
•A Central Bank-packaged special intervention fund that will offer financing to the states, ranging from between N250b to N300b. This would be a soft loan available to states to access for the purposes of paying backlog of salaries; and
•A debt relief programme proposed by the Debt Management Office (DMO), which will help states restructure their commercial loans currently put at over N660B, and extend the life span of such loans while reducing their debt-servicing expenditures.
The sources said the bailout will take immediate effect from this week to ensure stability in all the states of the Federation and the Federal Capital Territory (FCT).
The sources said: “While the over $2b, which is sourced from LNG proceeds to the federation account would be shared among the states, using the revenue allocation formula, the CBN will also make available the special intervention fund to states and then negotiate the terms with individual states.
“The packages that have now been approved by President Buhari is expected to go into effect this week as the President is said to have directed that release of the funds should be made as soon as possible to assuage the plight of thousands of Nigerian workers in the federal and state governments.”
The sources said with the rescheduling of states’s debts, their allocations will no longer be deducted at source by commercial banks.
The sources added: “This third option, by extending the commercial loans of the states, would therefore make available more funds to the state governments which otherwise would have been removed at source by the banks.
“The Federal Government will use its influence to guarantee the elongation of the loans for the benefit of the states.”
Government sources explained at the weekend that this package, which was considered at the National Economic Council( NEC )last week, had been designed specifically for workers.
“Furthermore, President Buhari has now reviewed and approved the package in his bid to intervene and alleviate the suffering of workers some of whom have not been paid for over ten months,” the sources said.
The bailout will be extended to workers in Federal Ministries, Departments and Agencies.
“There are also workers in the Federal Government’s employ whose salaries have been unpaid for months. This package is expected to address those cases also,” one of the sources added.
The Special Adviser to the President on Media and Publicity, Femi Adesina, confirmed that indeed a special package was on the way for workers.
He added that the president is deeply concerned about the plight of the workers who have been unpaid for many months.
During the inauguration of NEC last week, President Buhari asked the Council, which is a constitutional advisory body to him, to, as a matter of priority consider how to “liquidate the unpaid salaries of workers across the country, a situation he observed has brought untold hardship to the workers.”
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