According to a document received from the apex bank, thirty-one state governments owe the Central Bank of Nigeria, or CBN, a total of N339.9bn that was used to pay employee wages between 2015 and 2023.
According to the document, as of September 2023, the sub-nationals still owed N1.31 billion for loan default and an outstanding balance of N339.97 billion.
The fund was part of the over N10.3tn intervention fund made available by the apex bank under the immediate governor of the CBN, Godwin Emefiele. It was facilitated through the Salary Bailout Facility, a strategic intervention by the CBN aimed at alleviating the fiscal pressures faced by the states.
On the other hand, Olayemi Cardoso, the current governor, halted the initiative, emphasizing that the current economic crisis prevented the central bank from funding any more intervention programs.
According to the CBN, the SBF was created to assist state governments in paying their employees' arrears. The program emphasizes how important the CBN is to maintaining financial stability in the nation, particularly when state administrations are experiencing financial difficulties.
The Federal Ministry of Finance, the Accountant-General of the Federation, Deposit Money Banks, the benefiting state governments, and other important players were involved in the program, which has been closed as per its status report. These parties were crucial in the implementation and oversight of the bailout package.
According to a breakdown of the report, N457.17 billion was distributed to 31 state governments as a result of the project. Notwithstanding the significant payout, N117.21 billion has been paid back in principal to date, with N45.21 billion going toward interest repayments.
Additionally, it revealed that the states took out a total of N457.17 billion in loans to cover N1.31 billion in arrears and the wages of their individual civil personnel.
According to the report, Imo received N20.46 billion from the bailout program, followed by Kogi at N20.26 billion, Kano at N20.21 billion, Oyo at N16.81 billion, and Osun at N15.93 billion.
In the midst of labor groups' cries to raise the minimum wage from the existing N30,000, the states' failure to fulfill their fundamental duty to their workforce has taken center stage recently.
An examination of the half-year 2023 financial statements of Access Bank, Fidelity Bank, and the Zenith Bank Group reveals that state governments borrowed around N46.17 billion from three banks last year to cover salary payments between January and June.
It was noted that the states had borrowed a total of N42.97 billion from Access Bank during the course of the six months.
Zenith Bank ($1.78 billion) and Fidelity Bank ($1.42 billion) came next in the six-month period.
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