States will not get bailout if monthly allocation exceeds N500bn – Adeosun

The Minister of Finance, Kemi Adeosun, has announced that the monthly disbursement of the N90bn conditional loan facility to state governments announced by the Federal Government on June 14 will stop any moment the allocation from the Federation Account Allocation Committee exceeds N500bn.
According to her, funds had been made available from the private sector through the issuance of bonds.

The Special Adviser on Media to the Minister of Finance, Festus Akanbi, who was responding to an inquiry by Punch, said it would not be financially sensible for loans to be disbursed in any month that over N500bn was shared among the three tiers of government.
He said once the monthly distributable revenue was up to the threshold of N500bn, the amount that would be available to each state government that month would be enough to run its programme.

Akanbi said, “The budget support facility, which is conditional upon the implementation of the 22-point fiscal sustainability plan, is not a bailout. The implementation of the FSP is to be completed over an 18-month period. Monthly disbursements to each state will be conditional on compliance with pre-agreed FSP milestones.

“The facility will cease to be available in the next month if the distributable amount from the Federation Account is equal to or exceeds N500bn in any given month.”

He added that 35 states were in the process of submitting the required documents for the facility.