Bailout: FG issues bonds to 11 states

Bailout: FG issues bonds to 11 states 20 Aug 2015 8:14 PM The National Economic Council, chaired by Vice President Yemi Osinbajo, on Thursday learnt that Federal Government bonds have been issued to 11 states as part of the palliatives approved for state governments to enable them to meet their financial obligations. The benefitting states are among the 22 states, which 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. 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 submitting the reconciled figures and other required documents for the restructuring. He therefore urged the remaining 11 states to quickly put their documentation in place to see that they fit into the time schedule. Ahmed 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 have been jointly authenticated with the banks as of June 30. “As of August 14, out of the 22 states that have applied, FG bonds have 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.” Obiano added that the Ministry of Finance reported to the council that the current Excess Crude Account proceeds stood at $2.207bn as of August 2015. He stated that the Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Emmanuel Kachikwu, also briefed the council on the 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 audits firm 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 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 added that the council was informed that the Transmission Company of Nigeria’s management contract had been extended for another year.