FG Bars Governors From Collecting Loans From Banks
Mrs. Kemi Adeosun, Minister of Finance[/caption]
*To Grant N90bn Loan To States –
The Federal Government, on Tuesday, barred banks in the country from giving loans to state governments.
The decision was taken in line with the Fiscal Sustainability Plan (FSP), which has been agreed to by the Federal Government’s economic team and state governors, to ensure prudent management of sub-national resources.
The government, however said it will grant a N90 billion loan to the states, which will cover a period of one year.
The Minister of Finance, Mrs. Kemi Adeosun, while addressing journalists at a stakeholders’ meeting held with states’ Commissioners of Finance on the Fiscal Sustainability Plan (FSP) said “the loan is in two tranches – N50 billion for three months to be shared across the 36 states including FCT and then N40 billion for nine months.”
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“The idea is to tie states over for a year so that they rebalance. The loan is an average of about N1.3 billion per state for the first three months and N1.1billion for the next nine months.”
“It is a loan and it is fully repayable although it has a secured tie against future dividends, revenues and any amount that government might owe the states.”
