Banks extend loan repayment period for states

CBN Governor, Mr. Godwin Emefiele

BANKS have resolved to extend the repayment period of short-term loans owed by states to a minimum of 20 years.

According to a document released at the end of the National Executive Council meeting in Abuja on Thursday, the Governor of the Central Bank, Mr. Godwin Emefiele, disclosed this while giving an update on the restructuring of states' loans.

The governor was said to have informed the council that following meetings with banks, it was agreed that existing short-term loans should be restructured for a minimum of 20 years while loans for salary arrears should also be restructured for a minimum of 15 years and not exceeding 20 years.
He added that states could opt for either the bond, which he said would attract market rate or the debt restructuring option, which would attract a single digit interest rate.

"Council resolved that a four-man team made up of the governors of Bauchi, Rivers, Ondo and Osun states are to follow up with the CBN to ensure that the issues of Excess Crude Collateral for the states are sorted out by next week Tuesday," the statement added.

The meeting, chaired by Vice-President Yemi Osinbajo also asked the state governors to put machinery in place to cut cost of governance in their respective states.

The Lagos State Governor, Akinwunmi Ambode, briefed State House correspondents at the end of the meeting, which held in the Presidential Villa, Abuja.
Ambode said, "We resolved that all states should find ways to reduce their cost of governance.

"We do not have a uniform template on how to reduce the cost of governance but it is very clear that states in the specific situations will find different ways and means of ensuring the cost of running governance is not as huge as it has always been.

"So, it is left for the states in their respective situations to find the different ways of cutting cost but what is important is that we cannot continue with the kind of huge burden or huge cost we apply to run our government.

"A situation where you are having a huge percentage of your budget as recurrent expenditure is obviously not acceptable. And you must look for ways of reducing the cost of administration in the various states."

Ambode said the committee set up by the council during its last meeting to probe the expenses of the Nigerian National Petroleum Corporation and the Excess Crude Account under the past administration would submit its report during the next meeting.

The document also indicated that a presentation made by the Permanent Secretary, Ministry of Finance, Mrs. Anastasia Nwaobia, showed that the Excess Crude Account stood at $2.078bn.

The council directed the Committee on ECA to work with the Accountant-General's office to resolve the gap observed in the presentation.

Meanwhile, the Nigeria Labour Congress on Thursday said that the reduction of salaries announced by the President, the Vice-President and some state governors was not the solution to the problem of high cost of governance in the country.

The President of the NLC, Mr. Ayuba Wabba, said this during a courtesy visit to the Senate President, Dr. Bukola Saraki, in Abuja.

Wabba also said that the reduction in the budget of the National Assembly from N150bn to N115bn would not solve the problem of the rising cost of governance.

The NLC president said that Nigerians who were worried by the abominable increase in the cost of governance needed explanations for the astronomical increase in the budget of the National Assembly from N23. 3bn in 2003 to N154.2bn in 2014.
He called for a more transparent execution of the National Assembly annual budget.

He said, "Your excellency, you need not be told that we are again back to poor revenue from our main source of foreign exchange – crude oil. This, combined with the excesses of our political elite in the mismanagement of our national resources, has once again come to question the issue of the high cost of governance in the country.

"In response to this, some state governors have reduced their salaries by 50 per cent and the President and Vice-President recently joined by ordering that their salaries should also be reduced by 50 per cent. The National Assembly has also acted by reducing its annual budget from N150bn to N115bn as a symbolic gesture that our legislators are in tune with our austere measures.

"For the legislature, Nigerians are concerned and want explanations on how the National Assembly budget, which in 2003 was N23.347 bn rose to N66.488bn in 2007, and then climbed to N104.825bn in 2008. In 2010, under the watch of your predecessor, the budget of the National Assembly reached an all-time jump to N154.2bn."

Wabba also told Saraki and other senators during the event that the nation's anti-corruption laws were too weak to respond in an effective way to the challenge of corruption in the country.

He said that the anti-graft agencies must be able to conclude high profile corruption cases in the court for them to have the confidence of Nigerians in the fight against corruption.

He called on the National Assembly to strengthen existing laws in the country, to make it possible for those who steal the nation's resources to be brought to justice.

But the Senate President challenged the leadership of the NLC to assist the Federal Government to fight corruption by encouraging their members in the oil and gas sector to expose those behind subsidy scam in the country.

Saraki, who called on the workers to aid the government's action against corruption and financial crimes, stressed that such acts were committed either in the presence of workers or with their active connivance.

He said, "We in the 8th Senate have said there will be zero tolerance for corruption. Corruption is one issue slowing down development and some of the projects we are embarking on.

"Whether you talk about our refineries not working, you talk of the issue of fuel subsidy, you talk about the high cost of governance, everything you have talked about comes back to this issue of corruption and I think it is time for all of us, those of us in the National Assembly, the Executive and the workers to show serious commitment.

"This should not be a headline-grabbing approach because at the end of the day, you are workers, when you talk about oil theft; we have Nigerian workers at the terminals who surely must know when this thing is going on.

"Everywhere that there is corruption, some workers are there, either participating or observing. We now have a great opportunity to win the war against corruption because we have a leadership led by President Muhammadu Buhari that we believe has the political will to do the right thing."

Source


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