The relief aid given to the States by the Federal Government to cushion the effects of the removal of the petrol subsidy is a loan.
Recall that the federal government announced a N5 billion relief package for each State of the federation, including the Federal Capital Territory, (FCT).
Borno State Governor, Babagana Zulum, who spoke on Thursday at the end of the National Economic Council (NEC) meeting presided over by Vice-President Kashim Shettima, said the palliative would enable State governments to procure 100,000 bags of rice, 40,000 bags of maize and fertilizers to cushion the effect of food shortage across the country.
However, in a memo to the State governors, titled: “Re:Distribution of Palliatives – Terms of FG Facility”, Director-General of Nigeria Governors Forum (NGF), Asishana Okauru, said States may choose to opt out of the offer and return a sum of N2 billion already given to them.
In the memo, Okauru stated: “I have been directed by the Chairman, H.E. AbdulRahman AbdulRazaq to forward the terms of the facility as follows: “Facility size: N4, 000,000,000.00. Loan (48%) – N1,920,000,000.00; FGN Grant (52%) – N2,080,000,000.00 ; Beneficiary: each State government; Tenure – 20 months; Interest Rate – Nil; Moratorium – Three months; Repayment Mode – Monthly; Repayment Amount- N120,000,000.00; Security- Irrevocable Standing Payment Order, (ISPO).
“Your Excellency is invited to note that this offer is optional, and states that do not wish to participate may opt-out and refund the N2 billion already disbursed to them”.
