Thursday, 12 January 2017

Imo State finally had a relief of debt as FG releases money to the state

Imo as part of the 36 states of the federation have had sigh of relief from the economic recession as the Federal Government has released refund of over-deduction for Paris and London clubs debts made on states by the Debt Management Office recently.

The issue of refund of over deduction of Paris and London Clubs debts was not peculiar to Benue but all the states. At the time Buhari led administration came on board, the governors’ forum approached the President who agreed to pay the over deduction to the states.

The process for the refund started with the engagement of consultant by the FG to reconcile the account with Central Bank of Nigeria and state governments.

During the negotiation of debt cancellation in 2006, states were not carried along so when the governors’ forum met, it was agreed that a consultant be engaged to reconcile the account and both the consultant and Federal Government have come to conclusion.

The money is the monthly first line charge of the loan from Paris and London Club debts between 1995 and 2002.”

Sources explained that at the initial stage, it was agreed that 50 per cent of the amount be paid to each of the states but added that, “due to paucity of funds, the Federal Government later approved the release of 25 percent of the said amount.

The approval has been given by Federal Government and money released to state government since November, 2016.

"The release of these funds is intended to support the fiscal stimulus programme of the President Muhammadu Buhari-led administration to provide direct stimulus through government spending.

It is particularly aimed at boosting demand at consumer level and reversing the slowdown in economic activity", Federal Minister of finance said in a statement.

According to IYB source, Imo state received as refund by local arrangement is between $181 million and Central Bank of Nigeria agreed that the amount be paid at N305 to a dollar, giving something between $45 million which if converted at CBN approved rate is between N13billion.

Imo state government is expected to use part of the money to offset the salary arrears of civil servants and pension allowances while some while be used for infrastructural development and urban renewal projects ongoing.


Disclaimer: Comment expressed do not reflect the opinion of Isaac Yoma