Presidency Says Bailout To States Drawn From NLNG Dividends; Says Excess Crude Fund Intact

President Muhammadu Buhari

A part of the presidential palliative approved on Monday as intervention package to help bankrupt states pay outstanding workers’ salaries came from the US$2.1 billion dividend paid to the Federation Account by the Nigeria Liquefied Natural Gas (NLNG).

At the end of the briefing by the Permanent Secretary, Federal Ministry of Finance, Anastasia Daniel-Nwokobia, the newly appointed Accountant General of the Federation (AGF), Ahmed Idris, had announced that President Muhammadu Buhari and the 36 states had agreed to share US$1.7bn (N391bn) from the balance of US$2.078 billion in the Excess Crude Account.

PREMIUM TIMES reports:

“The position is very clear. What we met on ground is what we are going to distribute,” Mr. Idris said. “What we met on ground is hovering between US$1.6 bn and US$1.7 bn, and that is what we are going to distribute among all the three tiers of governments based on the approved formula.”

But the Presidency on Tuesday denied that the relief package approved by President Muhammadu Buhari for states and local governments was being drawn from the ECA.

Presidential spokesperson, Femi Adesina, who described the reports as “incorrect”, clarified that the ECA balance was intact, as the funds were drawn from share of the dividend paid to the Federation Account by the NLNG as part of measures by President Buhari to deal with the problem of unpaid public sector salaries in many states.

The other measure adopted by the President on the issue, Mr. Adesina said, include a Central Bank-packaged special intervention fund that would offer financing to the states, ranging from N250 billion to N300 billion in the form of soft loan to enable the states pay backlog of salaries.

Besides, he said a debt relief programme designed by the Debt Management Office (DMO) was also in the pipeline to help states restructure their commercial loans currently put at over N660 bn, and extend the life span of such loans, while reducing their debt-servicing expenditures.

“The measures approved by President Buhari definitely do not include drawing down the remaining balance in the Excess Crude Account or the “liquidation” of the account as some media outlets have wrongly reported,” Mr. Adesina explained.

“No such decision has been taken or approved by President Buhari, and last week’s meeting of the National Economic Council clearly concluded that the Excess Crude Account should be left untouched at this time,” he added.

At the end of the Federation Accounts Allocation Committee (FAAC) meeting for the month of May 2015 held last week in Abuja, the Permanent Secretary, Federal Ministry of Finance, Mrs. Daniel-Nwokobia, had disclosed that the balance in the foreign denominated ECA stood at about US$2.078 bn. She did not say what the balance in the Naira denominated ECA was.