Buhari stops deductions from state allocations Published on April 22, 2016

Buhari stops deductions from state allocations

Published on April 22, 2016

President Muhammadu Buhari, VP Yemi Osinbajo and Nigerian governors

President Muhammadu Buhari has ordered the suspension of deductions from state allocations on the N689.5 billion salary assistance loans given them by the Central Bank of Nigeria last year.
The president’s decision was conveyed to the National Economic Council today by Finance Minister, Mrs Kemi Adeosun.
It coincided with a reported shortfall by over N50 billion in what is available for distribution in March, compared with February figures.
Adeosun said the deductions will not be made at source this month from the Federal allocations to the states.
Many of the states are unable to pay monthly salaries of their workers, with the Federal Government itself going to the market to borrow to pay its workers. According to the Secretary to the Federal Government, Babachir David Lawal, the Federal Government borrows N600 billion yearly to pay its own workers.
The CBN Governor, Godwin Emefiele said apart from the N689.5 billion disbursed as salary assistance loan to States, an additional N310 billion was also disbursed as Excess Crude Account-backed loans to them. And many of them such as Ekiti, Osun, Ondo, Oyo, Imo are unable to pay the salaries.
In the last allocation in February, Osun got just N6million after all deductions made.
Vice President Yemi Osinbajo who presided over the Council meeting said the president’s action will give the States some financial relief at a time the FAAC allocations are dwindling due to the drop in oil prices.
Prof. Osinbajo added that “the President will continue to review the situation of the States on an ongoing basis and take appropriate relief measures as necessary and possible.”