The Central Bank of Nigeria (CBN) has faulted a plea by state governors for the Federal Government to postpone the repayment of a $2.1 billion budget support facility granted to the states.
Repayment of the loan facility was scheduled to resume in May.
The governors made the appeal on Thursday at the monthly meeting of the National Economic Council (NEC) presided over by Vice President Yemi Osinbajo.
Also at the meeting were Minister of Finance, Hajiya Zainab Ahmed and CBN Governor, Godwin Emefiele.
Senior Special Assistant to the VP on Media and Publicity, Laolu Akande disclosed this in a statement.
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He said, “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.”
He said that the Vice President then directed that a meeting be held soon after the NEC meeting where the issue would be properly considered and a decision reached.
“The VP will chair the meeting and the Governors would 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,” the statement further read.
Many states in the country regularly rely on credit facilities from the Federal Government due to low Internally-Generated Revenue (IGR).
The situation worsened after Nigeria’s major revenue earner – crude oil – took hit a hit in the international market.
Painting a picture of the states’ indebtedness, the Fiscal Responsibility Commission said in a recent report: “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.”