JUST IN: Imo, Kogi, 29 Other States Owe CBN N340bn Bailout Funds Used to Pay Workers’ Salaries

Imo, Kogi, 29 Other States Owe CBN N340bn Bailout Funds Used to Pay Workers' Salaries

Imo, , 29 Other States Owe CBN N340bn Bailout Funds Used to Pay Workers' Salaries

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Henzodaily.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.

Information sourced from the Central of has shown that a total of N339.9 billion is owed by thirty-one state governments for loans acquired between 2015 and 2023 to cover workers' salaries.

Additionally, as of September 2023, these state governments still had outstanding debts totalling N339.97 billion, alongside a default on a loan amounting to N1.31 billion.

Current Olayemi Cardoso halted the Bailout Funds program started during 's tenure.
credit – CBN, The Report
Source: UGC

These funds were obtained through the Salary Bailout Facility, a program initiated by the CBN to address the fiscal strains experienced by states.

This intervention was part of the larger N10.3 trillion intervention fund made accessible by the apex bank during the tenure of the , Godwin Emefiele.

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The present governor, Olayemi Cardoso, halted the program, emphasizing that the apex bank could not sustain further intervention initiatives amidst the current economic crisis.

Breakdown of debts

According to The Punch, a breakdown of the report's findings shows that 31 state governments were recipients of the initiative, amounting to a total disbursement of N457.17 billion.

Despite this significant disbursement, the repayments on the principal sum have amounted to N117.21 billion, accompanied by interest repayments of N45.21 billion.

Furthermore, the report indicates that collectively, the states borrowed N457.17 billion to settle the salaries of their civil servants, along with an overdue amount of N1.31 billion.

Highlighted in the report are the primary beneficiaries of the bailout facility, with Imo leading at N20.46 billion, followed by Kogi at N20.26 billion, Kano at N20.21 billion, Oyo at N16.81 billion, and Osun at N15.93 billion.

The states' failure to meet their fundamental obligation to their workforce has become a pressing concern, particularly amidst the advocacy by labour unions for an increase in the minimum wage from the current N30,000.

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Access Bank, others provided loans

During the first half of 2023, an examination of the financial statements of Access Bank, Fidelity Bank, and the Zenith Bank Group revealed that state governments borrowed approximately N46.17 billion from these institutions to cover salary payments between January and June.

Access Bank emerged as the primary lender during this period, extending loans totalling N42.97 billion to the states.

Following Access Bank, Zenith Bank provided loans amounting to N1.78 billion, while Fidelity Bank disbursed N1.42 billion within the same six-month timeframe.

Source: Henzodaily.ng

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