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What Was The Bailout Used For?

On July 6, 2015, our dear president, Muhammadu Buhari, opened the vaults and approved the release of money totaling about N900 billion in bailout package for states. Details of the approval showed that N497 billion was approved or sharing between the federal and state governments while another financing package of between N250 billion and N300 billion was to be worked out for the states, as loans, from the CBN. President Buhari’s special adviser on media and publicity, Femi Adesina, had explained that the intervention package was to enable states off-set backlog of unpaid salaries.

By this, it was understood that the initial N497 billion would go into making states liquid again so they could pay workers’ salaries. The CBN loan schedule would come as soft loans for states to remain afloat. Nigerians were told that release of the money would be immediate.

On the strength of this rainfall, the All Progressives Congress (APC), in a statement on July 7, signed by its National Publicity Secretary, Lai Mohammed, paid glowing tribute to the president for listening to the cries of workers and approving the release to enable states pay salaries.

“The multi-pronged package approved by President Buhari includes the sharing of about $2.1 billion sourced from the LNG’s payment to the Federation Account; and a CBNpackaged special intervention fund that will offer financing to the states, ranging between N250 billion to N300 billion, as a soft loan available to states to access for the purposes of paying backlog of salaries”, APC said.

other groups and labour unions added their voices in thanking the president for approving the release for the sake of suffering Nigerian workers. What this showed was that intendment of the release was to enable state governors address backlog of workers’ salaries, which included allowances and pension claims, despite the legitimacy questions over the powers to incur such expense without appropriation.

However, the table turned. Adams Oshiomhole, speaking shortly after a reception in honour of Inspector-General of Police, Mr. Solomon Arase, at Sabongida Ora, in Owan West Local Government Area of the state, recently, said neither him nor any of his colleagues had received a dime from the bailout package. He said: “So for now, no governor, no government has gotten any one naira under the bailout. But the hope is there. The President is determined and we are all working to see that it is done in a way that it benefits the target group, which is that no Nigerian worker should go home at the end of the month without getting a positive alert from his banker”.

A lot of other governors had also spoken in same manner. Chairman of the Nigerian Governors Forum (NGF), Abdul-Aziz Yari of Zamfara State, speaking in Abuja on July 24, said: “This is also to inform our friends in the media that the Federal Government has not given any bailout to any of the states. What had been shared the last time were monies from NLNG and FAAC. As we have been saying, rather than look out for bailout, we have been looking for all monies that are in the coffers of the federation to be brought together for the purpose of sharing.

“The CBN governor raised some issues that taking the monies from those accounts, most especially as our reserves are going down, will affect the exchange rate and as well put pressure on the naira. So they decided to make the naira available or its equivalent so that these can be taken as loan for some of the states that are complaining about payment of salaries. “The Federal Government has, however, not given out any bailout yet.

But we have been deliberating on how best the intervention will be done quickly so that we will be able to settle the issue of salaries and other operations of government in the country.” Yari confirmed that releases were made. But his colleagues said what was released wasn’t the actual bailout fund which would have enabled them pay salaries.

Kwara State governor, Abdulfatah Ahmed, rang a very loud bell telling Nigerians that the bailout was not meant to address workers’ salaries and other allowances. Speaking during his monthly personality programme tagged ,” Governor Explains”, in Ilorin, Ahmed said the bailout was meant to enable states restructure their exposures in the banks so as to be able to borrow again. He had said: “It was to restructure the debts of the states of the federation in various banks and financial institutions in order to give them a new lease of life to run the day to day administrations of their affected states”. Some other governors had also chorused the same.

According to Yari, income from NLNG and FAAC (probably FIRS) had been shared. What is now under focus is the loan being worked out by the CBN. The question is, if about N497 billion had been shared and was not used to offset backlog of workers’ salaries, what then did the governors use them for? Note also that since July 6, several governors had gotten approval of their state assemblies to borrow from the banks. If the money so far released to governors (from NLNG and FIRS lodgments) was not the bailout, what was it?

Are the governors telling us that President Buhari is profligate and encourages corrupt wastage of public funds? Did Buhari, known for his prudence and stoic disposition to money matters, waste N497 billion for no definite cause? Is it possible that Buhari was led into a blind alley? If the governors insist that the actual bailout package being worked out by CBN is yet to reach them, they therefore owe Nigerians explanations on what their states’ share of the NLNG and FIRS payments were for. That will be a prudent way to tell us that they, and President Buhari, are forthright and walking away from the profligacy of our years of independence. Nothing else suffices

-ACHILLEUS-CHUD UCHEGBU e-mail: achilleus.uchegbu@theunion.com.ng

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