The Federal Government has decided to stop the deductions for loan being made from the monthly allocations of each state of the federation in order to allow them to meet their obligations of paying workers’ salaries.
The stoppage of the deductions is for the month of April in the first instanceThe Minister of Finance, Mrs. Kemi Adeosun, disclosed this on Thursday while briefing State House correspondents on the outcome of the National Economic Council meeting presided over by Vice President Yemi Osinbajo.
The minister was joined at the briefing by the Nasarawa State Governor, Tanko Al-Makura; and the Corps Marshall of the Federal Road Safety Corps, Boboye Oyeyemi.
Adeosun said the decision to suspend the deductions was taken because of the sharp drop in the amount available to all levels of government to share.
She, however, said the deferral could not be described as a bailout, noting that the amount available for sharing for the month of April was about N299bn.
Adeosun added that state governments had been asked to make their financial data available to the Federal Government in order for them to be helped.
She said, “On the update of the financial situation of the states, it was discussed extensively that currently the Federation Account receipts are among the lowest that have been seen in recent memory. We are looking at N299bn this month and that is because of the very low oil price that was recorded in January and February.
“If you remember, oil prices went as low as $28 and $31; and of course, that has led to a very low Federation Account as a result of which I approached the President and the governors that we should defer the loan deductions from the Federation Account entitlements.