6 States In Financial Crisis Over N32b Deduction

kemi adeosun FG

By Dipo Olowookere

The decision of the Federal Government to deduct the sum of N32 billion from the monthly allocations of some distressed states in the federation have thrown them into financial mess.

A report by Economic Confidential, the economic intelligence magazine, disclosed that the money was deducted from the allocations of the affected states from the Federation Account in the month of April 2016 for various loans they took.

The affected states, according to the report, are Bayelsa, Cross River, Ekiti, Ogun, Osun and Plateau States.

The report explained that, “Osun State is followed in the mind boggling deduction conundrum by Bayelsa State with a total deduction of N3.207 billion out of an allocation of N4.812 billion for the month of April, 2016 representing 66.66 per cent of the total allocation.

“Others are: Cross River State with a total deduc­tion of N1.405 billion, Ogun State, N1.185 billion, Plateau State, N1.248 billion and Ekiti State with N1.067 billion all representing 63.46 per cent, 57.20 per cent, 56.52 per cent and 55.33 per cent respectively within the period under review.”

It was said that with deduction, Osun State had nothing to take home for April as other means of survival had to be adopted to keep the ship sailing for the people of the state.

It said from investigation, not less than N3.078 billion of the total amount was deducted for bailout funds granted the six states by the Federal Government, adding that eight states had no deductions on bailout funds for the period.

The states are Akwa Ibom, Anambra, Jigawa, Kogi, Lagos, Rivers, Yobe and the Federal Capital Territory (FCT).

The states did not collect the bailout funds from the Federal Government or appropriate time for the deduction have not fallen due and are yet to commence, the report said.

The report added that from the schedule of deductions from the states also included debts on Asset Management Company of Nigeria (AMCON) loan, Commercial Agriculture Credit Scheme, Bond Issuance Programme, contractual obligations and deductions from Excess Crude account.

Others are refund/payment arrears of derivation, foreign loans, special intervention/flood management project, the national FADAMA project and reconstruction of commercial bank loans into FGN bonds apart from bailout funds.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

more recommended stories

%d bloggers like this: