Federal Government issues eleven states bonds to offset bank loans

National Economic Council, NEC, yesterday disclosed that 11 states have been issued Federal Government Bonds as at last Wednesday to settle loans owed banks. The bonds were issued to 14 banks after submitting reconciled figures and other required documents for restructuring. Briefing State House Correspondents shortly after the 60th meeting of the council presided over by Vice President Yemi Osinbajo at the Presidential Villa, Kwara State Governor, Abdulfatah Ahmed explained that in order to address fiscal imbalance, 22 states submitted reports and applied for restructuring. He said the decision followed approval of President Muhammadu Buhari on the plan to restructure bank loans of states into Federal Government bonds. Ahmed briefed in company of other governors, including Badaru Abdullahi (Jigawa); Ibikunle Amosu (Ogun) and Willy Obiano (Anambra). The governor said out of the 22 states that have applied, bonds have been issued in respect of the loans of 11. According to him, the Director-General told the council that the Debt Management Office, DMO, had requested the states to reconcile figures with the banks, stressing that they have been jointly authenticated with the banks as at June 30 He explained that the proposal, which seeks to convert and restructure the bad loans into bonds with the assistance of DMO, is expected to have a tenor of between 15 – 20 years. Ahmed said DMO was now reviewing the additional submissions by states in the second phase of the programme. On development in the power sector, Governor Abdullahi of Jigawa State said Council was informed that there was overall increase in power supply by about 29 per cent in the country, compared to the last weeks of the previous administration. “Council was informed that power generation reached a significant 4.662mw by July 29, 2015. That there is now a publicly accessible website www.nesistats.org to bring a new level of transparency in the sector,” the governor said. Council was also informed that the next top priorities for the next two months in the sector would be the repair of stranded hydro capacity, reduce load rejection by Distribution Companies (Discos), stop haemohage of gas from power plants to industrial off-takers and fixing of major transmission and transformation constraints. The Council urged state governments to ensure payments of electricity bills by their Ministries, Departments and Agencies, MDA. At the meeting, NEC also urged states to assist with provision of security to reduce vandalism of distribution assets and embedded generation for state owned facilities. Also, the Permanent Secretary, Ministry of Finance reported to the Council that the current Excess Crude Proceeds currently stands at $2.207bn. Edo State Governor, Adams Oshiomhole also presented a provisional report of the five governors Ad-hoc Committee set up by NEC to review the operations and management of the Excess Crude Account ECA/ Federation Account. Oshiomhole told the Council that the committee had invited all the relevant revenue generating agencies who contribute to the Federation Account in the course of its assignment. The committee had last week appointed two international audit firms to carryout forensic audit of the Nigerian National Petroleum Corporation, NNPC, and other revenue generating agencies.