In a significant development, the relief aid extended to states by the federal government to alleviate the impact of the petrol subsidy removal has been unveiled as a loan, according to sources at TheCable.
Yesterday, the federal government declared a comprehensive N5 billion relief package designated for each state within the federation, including the federal capital territory (FCT).
During a press conference held at the conclusion of the National Economic Council (NEC) meeting, Borno State Governor Babagana Zulum disclosed that this financial support would empower state governments to acquire 100,000 bags of rice, 40,000 bags of maize, and a substantial quantity of fertilizers. This move aimed to cushion the prevailing food scarcity challenges experienced throughout the nation.
Nevertheless, an internal memo distributed to governors and titled “Re: Distribution of Palliatives – Terms of FG Facility” by Asishana Okauru, the Director-General of the Nigeria Governors Forum (NGF), has presented a different perspective. The memo outlines that states have the option to decline this assistance and return the sum of N2 billion, which has already been provided.
The document sheds light on the financial details of the offer, revealing the structure of the funding arrangement:
Facility Size: N4,000,000,000.00
Loan (48%): N1,920,000,000.00
FGN Grant (52%): N2,080,000,000.00 per beneficiary state government
Tenure: 20 Months
Interest Rate: Nil
Moratorium: Three Months
Repayment Mode: Monthly
Repayment Amount: N120,000,000.00
Security: Irrevocable Standing Payment Order (ISPO)
The memo clarifies, “Your excellency is invited to note that this offer is optional and states that do not wish to participate may opt-out and refund the N2 billion already disbursed to them.”
This revelation regarding the nature of the relief aid has sparked discussions and debates surrounding the federal government’s strategy to assist states grappling with the subsidy removal’s consequences. The decision for states to either accept this loan-like palliative or return the disbursed amount has created a crucial point of deliberation among state officials and financial experts. As the nation navigates through these developments, further analyses and insights are anticipated to emerge regarding the implications of this significant announcement.
