The financial support said to have been provided to states by the federal government to mitigate the impact of petrol subsidy removal is, in fact, a loan.
Earlier, the federal government had announced a relief package of N5 billion for each state within the federation, including the federal capital territory (FCT).
Babagana Zulum, the governor of Borno, disclosed during a meeting of the national economic council (NEC) presided over by Vice President Kashim Shettima that this aid would enable state governments to acquire 100,000 bags of rice, 40,000 bags of maize, and fertilizers to alleviate the food scarcity challenge nationwide.
However, an internal communication addressed to governors titled “Re: Palliatives Allocation – Terms of Federal Government Funding” was issued by Asishana Okauru, the director-general of the Nigeria Governors Forum (NGF).
This memo indicated that states had the option to decline the offer and repay the already disbursed N2 billion. “I have been instructed by Chairman H.E. AbdulRahman AbdulRazaq to provide the following facility terms,” Okauru stated in the memo.
“Total Facility Amount: N4,000,000,000.00
Loan Portion (48%): N1,920,000,000.00
FGN Grant Portion (52%): N2,080,000,000.00 for each state government
Tenure: 20 months
Interest Rate: None
Moratorium: Three months
Repayment Method: Monthly
Repayment Amount: N120,000,000.00
Security: Irrevocable Standing Payment Order (ISPO)
The memo further stated that state governors who don’t want to take the loan can opt out. “Your excellency is advised that participation in this offer is voluntary, and states that choose not to partake can opt out and refund the N2 billion already disbursed to them.”
