FG Gives Loans To States In Form Of Subsidy Removal Palliative

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The Federal Government gave loan to States under the guise of relief aid to cushion the effects of the removal of the petrol subsidy is a loan, it has been revealed.

It had earlier announced a N5 billion relief package for each state of the federation, including the Federal Capital Territory (FCT).

Babagana Zulum, Borno State governor, who spoke on Thursday at the end of the National Economic Council (NEC) meeting presided over by Vice President Kashim Shettima, said the palliative would enable state governments to procure 100,000 bags of rice, 40,000 bags of maize and fertilizers to cushion the effect of food shortage across the country.

However, in a memo to governors entitled “Re: Distribution of Palliatives – Terms of FG Facility”, Asishana Okauru, Director-General of Nigeria Governors Forum (NGF), said states might opt out of the offer and return a sum of N2 billion already given to them.

Said Okauru in the memo: “I have been directed by the Chairman, H.E. AbdulRahman AbdulRazaq to forward the terms of the facility as follows:

“Facility size: N4,000,000,000.00
Loan (48%): N1,920,000,000.00
FGN Grant: (52%)
N2,080,000,000.00 Beneficiary each state government
Tenure: 20 months
Interest Rate: Nil
Moratorium: Three months
Repayment Mode: Monthly
Repayment Amount: N120,000,000.00
Security Irrevocable Standing Payment Order (ISPO)

“Your excellency is invited to note that this offer is optional and states that do not wish to participate may opt-out and refund the N2 billion already disbursed to them”.

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