STATE governors are not prepared to meet the two-week deadline given them by the Federal Government to refund the N614billion bailout given to them in 2017.
They are insisting on the 20-year repayment agreement reached by the two sides before the funds were released, The Nation gathered authoritatively on Saturday.
They are also asking the presidency to prevail on the Central Bank of Nigeria (CBN) and the Office of the Accountant-General of the Federation to stay action on the deducting the bailout funds until reconciliation has been done.
A reconciliation team, headed by Governor Nasir el-Rufai of Kaduna State will work with the CBN, the Nigerian National Petroleum Corporation (NNPC) and the Office of the Accountant-General of the Federation (OAGF).
The governors said over $1billion of the bailout was sourced from the NLNG dividends which the states are ordinarily entitled to benefit from.
It was learnt that the states are pushing for reconciliation to enable the Federal Government to determine their share of the NLNG dividends and deduct same from the outstanding bail out cash to be refunded.
Although each of the 36 states involved is expected to refund N17.5billion, the governors said the amount credited to the states might be substantially less.
There were indications last night that the Nigerian Governors Forum (NGF) might meet on Wednesday ahead of the Thursday meeting of the National Economic Council (NEC).
The Budget Support Facility was given to 35 out of the 36 states of the Federation following accumulated salaries and their inability to pay.
The facility was advanced to the states through the Central Bank of Nigeria (CBN) in 2017.
But at a NEC session on August 23, the presidency decided to ask for the refund of the N614billion bailout.
The governors however felt “wholesale deductions” will adversely affect the economy of all the states.
A reliable source said: “The position of the governors is that wholesale deductions will hurt the economy of most states and it will be unfair to the present generation of governors.
“Most of the governors who secured the bailout have spent the cash and left office. Some did not even spend the bailout for what it was meant for.
“More importantly, the Federal Government entered into an agreement with the states that the N614billion would be a loan with a 20-year repayment plan. They want the FG to honour this agreement.
“Since government is a continuum, the governors have agreed at NEC to refund the N614billion with a caveat that there must be a reconciliation of the outstanding accruals to the states from NLNG dividends and the N17billion debt owed per state.”
Giving an insight into the background of what led to the conditions given by state governors, another source said: “While we give credit to President Muhammadu Buhari for displaying rare statesmanship in bailing out the states, the truth is that about $1billion of the cash came from the NLNG dividends.
“All the states are stakeholders in NLNG and they are entitled to dividends. The governors are saying that you cannot lend them what belongs to them. They are demanding a reconciliation of their share of the dividends from NLNG with the outstanding Budget Support loan/ debt.
“Thereafter, the government and the states will now meet to come up with a refund process of whatever is the difference as outstanding debt.”
A governor said: “We have raised a reconciliation panel, which is headed by Governor Nasir el-Rufai of Kaduna State. The governor will work with the CBN, NNPC and OAGF.
“The issues in contention between the Federal Government and the governors are reconciliation of records and the date of the commencement of the refund.
“As governors, we believe that if there is no reconciliation acceptable to all parties, there should be no refund.
“The CBN Governor is however adamant that states must refund the bail out because it came from its vault. The apex bank made the bailout available to the states.”
Speaking ahead of the National Economic Council (NEC) meeting on Thursday, a government source said: “The refund is likely to be part of the agenda because the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed on August 10 said the deduction of the refund will start in two weeks.
“The governors might meet on Wednesday to review the situation ahead of the NEC session.” (The Nation)
