States get FG bonds to offset bank loans
RISING from its 60th meeting yesterday, the National Economic Council (NEC) confirmed that 11 states have been issued with the federal government bonds to offset loans owed to commercial banks.
The 11 states were among the 22 that applied for the bonds. The Council received briefings on development in the power sector from the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele; Director-General of the Debt Management Office (DMO), Mr. Abraham Nwankwo; Group Managing Director of the Nigerian National Petroleum Corporation, (NNPC ), Dr. Ibe Akachikwu Governor of Kwara State, Abdulfatah Ahmed, disclosed this to State House correspondents after the NEC meeting which was presided over by Vice President Yemi Osinbajo at the presidential villa, Abuja.
He was joined at the briefing by the Governor of Jigawa State, Badaru Abdullahi, Williie Obiano of Anambra and Ibikunle Amosun of Ogun State.
The development followed President Muhammadu Buhari’s approval of plan to restructure states’ bank loans into Federal Government bonds to address fiscal imbalance.
Twenty-two states submitted reports and applied for the restructuring process. The proposal which seeks to convert and restructure the bad loans to bond with the assistance of the Debt Management Office (DMO) is expected have a tenor of between 15 – 20 years.
In a joint briefing, the governors said that the Director General of the Debt Management told NEC members that it had requested states to reconcile figures with the banks which they have jointly authenticated as at June 30th this year.
As at August 14th, 2015, out of the 22 states that have applied, FGN bonds have been issued in respect of the loans of 11 states. The bonds were issued to 14 banks after submitting the reconciled figures and other required documents for the restructuring.
The governors also said that with this development, the DMO is currently reviewing the additional submissions by states in the second phase of the programme.
Obiano said the Permanent Secretary, Ministry of Finance reported to the Council that the current excess crude proceeds stand at US$2.207 billion as at August 2015.
Similarly, Edo State Governor, Adams Oshiomhole, presented a provisional report of the Ad-hoc Committee set up by NEC to review the operations and management of the ECA/Federation Account.
He told the Council that the committee had invited all the relevant revenue generating agencies who contribute to the Federation Account in the course of its assignment.
The Ad-hoc Committee recommended to the Council that in order to have a comprehensive report on the operations of the ECA/Federation Account, two International Audit Firms have been appointed to carry out Forensic Audit of the ECA/Federation Account from January 2010 – June 30, 2015.
The briefing also touched on the presentation of the GMD of NNPC who briefed the Council on the ongoing reforms in the petroleum industry.
He told the Council that the reforms will cover aspects of performance management, transparency and accountability, proper focus in investment attraction, zero tolerance for corruption, cost auditing improve stakeholders management and relationship and image rebranding among others. “The GMD also urged the Governors to assist in protecting oil and gas infrastructure in their States.
The Council was also briefed on the developments in the power sector as recorded by the present administration in the last two months.”
The Jigawa governor said the Council was informed that there was an overall increase in power supply by 29 per cent as at the first six weeks of this administration, compared to the last weeks of previous administration.