FG refunds N535bn spent on federal roads to 21 states

The Federal Government has concluded plans to reimburse a total sum of N535.5 billion expended by 21 states of the federation in repairing federal roads across the country.

This was disclosed by Senator Ibikunle Amosun, Ogun state governor, who briefed State House Correspondents after a meeting of the National Economic Council (NEC) chaired by the Vice President, Professor Yemi Osinbajo.

Amosun said “Another issue discussed is on refund of expenses incurred on repair of federal roads by states. As listed here, we have 13 states that have fully complied with the re-inibursement requirements, we have 8 states that have partially complied, and the total sum of claims to be re-inbursed is exactly N535, 596, 386.00. In other words, N535.5 billion. Then we have N13 billion that has been disbursed to the states already as at 2013. The challenges they face had to do with inadequate funding in the ministry.”

He also disclosed that the Ad-hoc committee constituted by NEC and headed by Governor Adams Oshiomhole charged with the responsibility of probing the management if the Excess Crude Account (ECA) and related federation issues reported perceived lack of transparency and accountability in the operation of the federation accounts.

The panel, according to Amosun, also told the Council that “there were no checks and balances in the running of the ECA in the recent past.”

Those five governors on the Ad-Hoc Committee are the Edo State Governor, Comrade Adams Oshiomhole; Gombe State Governor, Alhaji Ibrahim Dankwambo; Kaduna State Governor, Mallam El Rufai; (who presented the report to Council today) Akwa Ibom State Governor, Mr. Emmanuel Udom and Lagos State Governor, Mr. Akinwunmi Ambode.

Amosun added that some states have started benefiting from the Special Intervention Fund aspect of the presidential relief package earlier approved by President Muhammadu Buhari.

He said “While briefing the Council, the Central Bank Governor, Mr. Godwin Emefiele, said 18 states had been able to draw from the Fund, as at today, while a number of other states are currently being processed for the soft loan facility. This is part of President Buhari’s relief package designed to help states pay backlog of salaries and also ease their financial challenges caused by the drop in federal allocation.

In a similar vein, the Director-General of the Debt Management Office, DMO, Mr. Abraham Nwankwo also informed the NEC that the second phase of the debt restructuring offered to the states is now in effect with 13 new states now being considered, with 12 banks involved.

This is in addition to 11 states whose debts were restructured last month. According to Nwankwo who also told the Council 23 states are now involved in the restructuring. While a total of over N322 billion of states loans were restructured last month, about N252 Billion have been restructured this month.”

It would be recalled that the presidential relief package has three core elements. These include the sharing of about $2.1B in fresh allocation between the states and the federal government. The money was sourced from recent LNG proceeds to the federation account, and its release okayed by the president leading to the sharing of federal allocation twice for month of June.
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The second is a Central Bank-packaged special intervention fund that will offer financing to the states, to the range of about ranging around from N300B. This is a soft loan available to states to access for the purposes of paying backlog of salaries.

The last being a debt relief program designed by the Debt Management Office, DMO, which is now helping the states restructure their commercial loans put at over N660B, and extend the life span of such loans while reducing their debt-servicing expenditures.

The Ogun state governor added that the council also discussed the issues of the current and future agricultural policy direction. “And the PS made a very lucid presentation and it was extensively discussed and he gave us information on data base of farmers in proceeds production capacity of food storage and grains increased fertilizer and he told us specifically that fertilizer used by farmers increased by over 271 percent which was commendable, but the conclusion was that there was the need for more interaction with the states and local governments and their approach in agriculture should be bottom-top approach.

The Council was also briefed about the planned agricultural training programme that the ministry of agriculture intends to pursue and that 12 states and FCT have been selected for the first phase. The second phase would include non educated youths and spread Aldo across states by geopolitical zones,” he said.

Meanwhile, states of the federation have started benefiting from the Special Intervention Fund aspect of the presidential relief package earlier approved by President Muhammadu Buhari.

This was disclosed today at the National Economic Council, NEC, meeting held at the State House presided over by Vice President Prof Yemi Osinbajo, SAN.

While briefing the Council the Central Bank Governor, Mr. Godwin Emefiele said 18 states had been able to draw from the Fund, as at today, while a number of other states are currently being processed for the soft loan facility. This is part of President Buhari’s relief package designed to help states pay backlog of salaries and also ease their financial challenges caused by the drop in federal allocation.

In a similar vein, the Director-General of the Debt Management Office, DMO, Mr. Abraham Nwankwo also informed the NEC that the second phase of the debt restructuring offered to the states is now in effect with 13 new states now being considered, with 12 banks involved.

This is in addition to 11 states whose debts were restructured last month, according to Nwankwo who also told the Council 23 states are now involved in the restructuring. While a total of over N322 Billion of states loans were restructured last month, about N252 Billion have been restructured this month.

Yesterday, the NEC also received an ongoing report from its Ad-Hoc Committee of five governors on the management of the Excess Crude Account and related Federation Account issues. The Committee briefed the Council that it has observed a lack of transparency and accountability in the operation of the Federation Account, adding that there were no checks and balances in the running of the ECA in the recent past.

The five governors on the Ad-Hoc Committee are the Edo State Governor, Comrade Adams Oshiomhole; Gombe State Governor, Alhaji Ibrahim Dankwambo; Kaduna State Governor, Mallam El Rufai; (who presented the report to Council today) Akwa Ibom State Governor, Mr. Emmanuel Udom and Lagos State Governor, Mr. Akinwunmi Ambode.
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