On Monday, 15th November, 2021, at the meeting of the National Council on Finance and Economic Development in Lagos, the Minister of Finance, Budget and National Planning, Zainab Ahmed, through her Spokesman, Olajide Oshundun made it public that the Federal Government will disburse N656.1bn to the 36 states of the federation as a fresh bailout, to cushion the effect of the resumption in the repayment of the 3 earlier bailouts. They termed it “bridge financing facility”.
Under the new arrangement, each state will receive a total of N18. 225 bn in 6 trenches over a period of 6 months.
The loan has 30 year tenure and 2 year moratorium.
Each state will receive about N3, 037, 500, 000, 000.00 every month.
The interest on the loan is 9%, which is about N1, 640, 250, 000, 000.00
Expectedly, each state will repay the total sum of about N19, 865, 250, 000, 000.00
The sum of about N55, 181, 250, 000.00 will be deducted from source on the loan every month for a period of 360 months.
I personally have so many issues with loan, the chief of which is that the loan is unnecessary. May be I am too young to understand the rationale behind it, but it makes no sense to me, paying debt with debt.
Instead of the fresh bailout, the federal government should have considered waiving a substantial part of the 3 bailouts or delay the repayment or extend the repayment period. It makes more sense to me if the states are tailored towards financial independence, by reducing the cost of governance, address leakages, address corruption, boost internally generated revenue, diversify the economy, government officials to stop unnecessary travels and chartered flights as well as embark on projects that have direct bearing to the common man.
One more thing, the interest is too high. 1% would have been more reasonable, if the federal government is genuinely trying to help the states out of their financial quagmire.
I am anxiously waiting to see what difference would the new loan make in my state.
N3 bn every month is not a small money.
I expect to see a remarkable transformation of the state within a shortest possible time, in terms of road network, bridges and flyovers, free medical care, students’ scholarship, sustainable empowerment programs, jobs creation, revamping of civil service and provision of security throughout the state, so that people could move freely and students to resume their classes, who have been at home for several months due to insecurity that has engulfed the state for over a decade.

Bello Galadi, former Chairman of the Nigerian Bar Association, Gusau Branch (covering Zamfara State) and President of Bello Galadi Foundation.
He can be reached on:
muhammadbel_law@yahoo.com & muhammadbellaw80@gmail.com

22nd November, 2021