The National Economic Council chaired by Vice- President Yemi Osinbajo was on Thursday told that Federal Government bonds had been issued to 14 banks on behalf of 11 state governments as part of the plan to restructure states’ loans in commercial banks.

As part of the plan, the Federal Government had approved the conversion of states’ loans in commercial banks to Federal Government bonds.

This is in line with the palliatives President Muhammadu Buhari had approved for state governments to enable them to meet their financial obligations.

The 11 states, which are beneficiaries of the FGN bonds issued to the 14 banks, were among the 22 states who had applied for their commercial loans to be converted to FG bonds as of August 19.

Four governors, Ibikunle Amosun (Ogun); Willie Obiano (Anambra); Abdulfatah Ahmed (Kwara); and Muhammed Badaru (Jigawa), briefed State House correspondents at the end of the meeting.

The NEC which is chaired by Vice-President has all state governors as members.

Ahmed said the latest on the terms of restructuring of states’ indebtedness to commercial banks were contained in the presentations made to the council by the Central Bank of Nigeria and the Debt Management Office.

He said the bonds for the 11 states were issued to 14 banks after they submitted the reconciled figures and other required documents for the restructuring.

Ahmed, therefore, urged the remaining 11 states to quickly put their documentation in place to ensure that they fitted into the time schedule.

The governor said, “The DG of DMO told the council that based on the approval of Mr. President on the plan to restructure bank loans of states into FG bonds in order to address fiscal imbalance, 22 states had submitted reports and applied for restructuring as of August 19.

“The DG also said the DMO had requested the states to reconcile figures with the banks and had been jointly authenticated with the banks as of June 30.

“As of August 14, out of the 22 states that applied, FG bonds had 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.

“DMO is now reviewing the additional submissions by states in the second phase of the programme.”

Economic and financial experts said the loan conversion deal was good for the banks and the state governments because the bond certificates issued to the 14 banks on behalf of the 11 states meant the states were no longer indebted to the banks.

The Head, Asset Management, Meristem Asset Management Limited, an investment advisory firm Mr. Taiwo Yusuf, said, “What the bond certificates issued to the 14 banks mean is that the states are no more indebted to the banks. The Federal Government through the DMO has taken that up. While I don’t know much about the 14 banks, it can be inferred that the 14 banks are the lenders the 11 states were exposed to.”

The Head, Research and Investment, Afrinvest West Africa Limited, Mr. Ayodeji Ebo, said, “It is good news for the banks considering the challenging financial situations some of them are passing through.”

The Federal Government bailout package for the 36 states includes the sharing of about $2.1bn (N413.7bn) in fresh allocation between the states and the Federal Government.

Another measure is a CBN-packaged special intervention fund that offers financing to the states, ranging from between N250bn and N300bn.

The third measure is a debt relief programme proposed by the Debt Management Office which will help states restructure their commercial loans currently put at over N660bn and extend the tenure of the loans to 15 years, thereby reducing the states’ debt service obligations.

However, Obiano said the Ministry of Finance reported to the council that the current Excess Crude Account proceeds stood at $2.207bn as of August 2015.

He added that the Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Emmanuel Kachikwu, also briefed the council on ongoing reforms in the petroleum industry.

He said Kachikwu told the council that the reforms would cover aspects of performance management, transparency and accountability and zero tolerance for corruption among others.

He said the GMD urged the state governors to assist in protecting oil and gas infrastructure in their states.

Amosun on his part told journalists that Governor Adams Oshiomhole of Edo State presented what he called a provisional report of the five governors asked by the council to review the operations and management of the ECA and the Federation Account.

He quoted Oshiomhole as reporting that all the necessary agencies had been invited while two audit firms had been appointed to find out what transpired within the last five years.

The governor said the council was expected to receive the committee’s final report next month.

He explained that no law was violated in appointing the audit firms since the governors carrying out the probe needed expertise.

Badaru said the council was also briefed on developments in the power sector, saying there had been overall increase in power supply by 29 per cent as of the first six weeks of the present administration.

He said power generation reached 4,6662MW by July 29.

The governor also said that the council was informed that the Transmission Company of Nigeria’s management contract had been extended for another year.

He said the council was informed that there was currently a 45 per cent default rate on payment of electricity bills by state governments.

Badaru said state governments had therefore been urged to ensure payments of electricity bills by their Ministries, Departments and Agencies.

Badaru added that the state governments were also urged to assist with the provision of security to reduce vandalism of distribution assets.

http://www.punchng.com/news/fg-converts-11-states-bank-debts-to-bonds/

Ok


#Always Buy Made In Aba

Hmmm

Why are the states un named padi padi things abi??

Good gesture from the president. But in reality, this is not debt forgiveness so the headline is misleading. With this restructuring, the federal government is now owing the commercial banks that the states borrowed from while the states are now owing the federal government. It doesn't take away the indebtedness of the states. However, it gives them an easier, more convenient and longer repayment options which will in turn free up more resources for them to meet up their pressing immediate financial needs.

seunmsg:
Good gesture from the president.

you are a big clown

They should make names of the beneficiary states public and how much they got...proudly 5%

Unnamed? Why the secrecy? Is buhari running a secret cult organisation or a country? Who is this man? Why the desperation to pitch one part of Nigeria against the other? What is going on??

owobokiri:
Unnamed? Why the secrecy? Is buhari running a secret cult organisation or a country? Who is this man? Why the desperation to pitch one part of Nigeria against the other? What is going on??

I dont think one path of the country is being pitched with the other here

http://www.thisdaylive.com/articles/debt-restructuring-osun-delta-ogun-eight-others-issue-n322-78bn-bonds/218064/

likila:


you are a big clown

Really, is it not a good gesture from the president?

1miccza:
Why are the states un named padi padi things abi??

They are the 95% zombie states.


What do you expect from a sectional goat like Buhari

Mbkite:
Ok

#Always Buy Made In Aba

you mean abakaliki

Some dare-devil politicians will borrow endlessly till the future of their states are morgaged. They will then stash most of these funds in offshore accounts and use same only to sponsor candidates amenable to their interests and in the end, the federal government will write-off these debts from the national collective purse while these politicians who got their states on the wrong paths prance around as kingmakers and elder statesmen without any purnishment. How fair is that?? Some states borrow mindlessly for all sorts hedonistic reasons. Is it really fair to subsidize such bizzare lifestyle with federal government funds??

thanks BABA

BishopMagic:



They are the 95% zombie states.


What do you expect from a sectional goat like Buhari

Lwkmd English has it's own way of revealing the o most obscure of infos honestly...

PMB cannot grant anything right now
or in practical terms he is seriously trying to mess up with the accounts

owobokiri:
Some dare-devil politicians will borrow endlessly till the future of their states are morgaged. They will then stash most of these funds in offshore accounts and use same only to sponsor candidates amenable to their interests and in the end, the federal government will write-off these debts from the national collective purse while these politicians who got their states on the wrong paths prance around as kingmakers and elder statesmen without any purnishment. How fair is that?? Some states borrow mindlessly for all sorts hedonistic reasons. Is it really fair to subsidize such bizzare lifestyle with federal government funds??

@ the part in bold, read the story very well and understand what really happened. Federal government is not writing off the indebtedness of any state. Debt restructuring is not debt forgiveness.

seunmsg:



@ the part in bold, read the story very well and understand what really happened. Federal government is not writing off the indebtedness of any state. Debt restructuring is not debt forgiveness.

it is not in the hands of the FG to restructure state debts.Most especially with commercial banks.
it Will turn to a big mess of sccounts

asha80:
I dont think one path of the country is being pitched with the other here

http://www.thisdaylive.com/articles/debt-restructuring-osun-delta-ogun-eight-others-issue-n322-78bn-bonds/218064/

I wish you didn't even oblige wailers this link so they can wallow in their misery and self inflicted pains. Imagine some already saying he must have favoured a particular section of the country.

Things like this are the reason, besides my very busy schedule these days, why I find it needless commenting on threads these days.

Has Dr. Kachikwu finally explained to GMB what Subsidy means?
Because the last time I checked, GMB said he doesn't understand Subsidy.

People were corrupt in the past & will be corrupt in future
We need to build institutions
Not this "special military tribunal" nonsense

baralatie:

it is not in the hands of the FG to restructure state debts.Most especially with commercial banks.
it Will turn to a big mess of sccounts

No big deal if the federal government assist the states in restructuring their debt. If states are allowed to collapse due to huge debt burden, the overall effect will be on the economy of Nigeria and not just the states. Beside, the states will still pay back their debts in the long run.

seunmsg:
Good gesture from the president. But in reality, this is not debt forgiveness so the headline is misleading. With this restructuring, the federal government is now owing the commercial banks that the states borrowed from while the states are now owing the federal government. It doesn't take away the indebtedness of the states. However, it gives them an easier, more convenient and longer repayment options which will in turn free up more resources for them to meet up their pressing immediate financial needs.

Thank you my brother, I guess the headline was carefully crafted to mislead readers.

likila:


you are a big clown

Bro... haha.. some comments shudnt b surprising u again I nairaland... some pple just dont understanding anything rather than folo folo...

seunmsg:



No big deal if the federal government assist the states in restructuring their debt. If states are allowed to collapse due to huge debt burden, the overall effect will be on the economy of Nigeria and not just the states. Beside, the states will still pay back their debts in the long run.

if states are allowed to collapse due to huge debts of which the states willfully plunged themselves into??
the problem is what you have identified.
the solution is to declare state of emergency regarding to States and approach the House of assembly and not to illegally push forward the obvious!

Did any TANoid noticed the brilliance employed in solving problems?

That is wot u tried to tell Jonathan wey ur wailings deaf im ear!

U dnt need to be a genius, u need genius around u as a president!

A win-win situation.

Wailiers, any objection?

unnamed bokoharam state abi

Osun, Lagos and Amaechi

baralatie:

if states are allowed to collapse due to huge debts of which the states willfully plunged themselves into??
the problem is what you have identified.
the solution is to declare state of emergency regarding to States and approach the House of assembly and not to illegally push forward the obvious!

My friend, declaring a state of emergency will not pay workers salary, build infrastructure and create the enabling environment for the states to generate more revenue. We should stop criticising every thing unnecessarily.

seunmsg:


My friend, declaring a state of emergency will not pay workers salary, build infrastructure and create the enabling environment for the states to generate more revenue. We should stop criticising every thing unnecessarily.

declaring a state of emergency will allow the Fg Priotize the payments of state workers salaries first with the backing of the house of assembly.
the last I checked no FG policy has denied any state from generating its own revenue rather the concept of Excess Crude Account (E.C.A) has been so lucrative that the states deliberately refuse to pursue their IGR.

It's so unfair! This is going to punish states like Anambra and co that prudently played by rules and reward states that have profligately mismanaged their funds.. So Nigerians like Wheelbarrow pushers and my grandma in the village now own debts incurred by Oshiomole and Aregbesola

[size=15pt]Debt restructuring is not debt forgiveness and the states involved are not secret.

The title of this thread is deliberately misleading.[/size]

The MODs should do something about this title if this thread must make the frontpage else, Nigerians in their usual laziness to read will just rely on the wrong title and start making silly assumptions.

By the way, the 11 states involved are:
Osun State - N88.6 billion
Delta – N69.8 billion
Ogun – N55.4 billion
Imo – N37.1 billion
Ekiti – N18.8 billion
Kwara – N15.6 billion
Edo – N11.9 billion
Benue – N10.9 billion
Oyo – N9.1 billion
Bauchi – N6.5 billion
Kogi – N0.81 billion.