States' bailout: Banks to release funds for salary arrears

The Central Bank of Nigeria (CBN) has approved the request by Deposit Money Banks (DMBs) to provide financial accommodation to state governments to enable them to pay the backlog of salaries of their workers.

This is contained in a statement on Wednesday in Abuja by the Director, Corporate Communications, CBN, Mr Mu’azu Ibrahim.

According to the statement, the approval was based on the CBN’s decision to collaborate with relevant stakeholders to consider ways of liquidating the outstanding staff salaries owed by state and local governments.

“The conditions for accessing the loan facility include State Executive Council authorisation, state House of Assembly consenting to the loan package, as well as issuance of Irrevocable Standing Payment Order (ISPO) to ensure timely repayment.

“Out of the 27 states involved, funds have been disbursed to two states namely Zamfara and Kwara states that met the requirements as agreed with their respective banks.

“Efforts will be made in the coming days to conclude disbursements to other states so that all outstanding salaries to civil servants can be cleared,” it stated.

The News Agency of Nigeria (NAN) reports that this is coming three days after the Director-General, Debt Management Office (DMO), Dr. Abraham Nwankwo, said bonds had been released to 14 commercial banks to enable them to aid states.

The DMO boss said the debt restructuring was open to all the 36 states of the federation and the Federal Capital Territory