Peter Obi Slams States For Not Investing Over N1.5trn Bailout Fund From FG

Peter Obi, the presidential candidate of the Labour Party has accused states governors of not properly investing bailout funds given to them by the Federal Government.

Obi, who is a former governor of Anambra State made the statement in a tweet seen by THE WHISTLER.

He said, “It’s ironical that States that received fiscal bailouts did not invest them properly; did not repay the loans and are still borrowing beyond their revenue earnings.”

When the Covid-19 pandemic struck global economy in 2020, Nigerian States where badly affected as the over three months lockdown crippled economic activities.

Prior to the 2020 Covid-19 era, the government had approved funds to help the states when the country slipped into recession in 2016.

The Nigerian government had supported states with over N1.75trn as bailout fund between 2015 to 2021.

Part of it was a salary loan of about N338bn which was disbursed to states in 2015. This was followed by a N575bn restructuring programme bond which allowed states convert high interest bank debt into a 20 year tenured debt with interest rates set at 14.83 pet cent.

In November 2021 President Muhammadu Buhari approved a fresh N656bn bailout to the 36 states, as each state was entitled to N18.2bn.

The special bailout called Bridge Financing Facility was to help states meet budget obligation.

“In a bid to help state governments meet financial obligations, especially the previous budget support facility due for repayment, President Muhammadu Buhari has approved a fresh N656billion Bridge Financing Facility to the 36 States. Each State would receive N18.2B,” Laolu Akande, spokesperson to the vice-president had said.

But the move was criticized by Civil Society Organisations who had called for the audit of the initial N1.75trn bailout.

“Anti-corruption Network categorically states that it is absolutely wrong for state governors to be demanding for fresh bailout funds without providing facts and figures as to how they managed the revenues they had, and the previous funds that were disbursed to them.

“The Anti-Corruption also noted that this has opened more avenues for state governors to launder money in their respective states and run the affairs of their respective states with impunity,” Anti-Curruption Network had said.

The Labour Party presidential candidate reiterated his argument that borrowing for consumption would affect the Nigerian state adversely.

Nigeria’s debt currently stands at $100.06bn or N41.6trn, according to the Debt Management Office.

Obi said, “As a matter of urgency, Nigeria must stop borrowing for consumption, but only borrow to invest in regenerative development projects and other productive ventures.

“Also, it has become imperative to restrict Federal borrowings to the statutory 5 per cent of the previous year’s revenue.”