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There will be consequences if Governors divert bailout – CBN

By on September 20, 2015

On no account should states divert the bailout they have just received to pay the backlog of their workers’ outstanding salaries, the Central Bank of Nigeria warned on Friday.

The apex bank said there would be consequences if the bailout is diverted.

The warning came after allegation that some state governors have fixed the money in personal banks accounts to yield huge interest.

In a telephone interview with one of our correspondents, the Director, Corporate Communications, CBN, Mr. Ibrahim Mu’azu, said the bank had never received report of any diversion, but insisted that there would be consequences if such should happen.

Muazu, however, could not specify the action that would be taken against any state that diverts the fund or what is enshrined in the Memorandum of Understanding signed by the states and the apex bank.

He said, “No state is expected to use the money for any purpose other than what was specified. Don’t forget that this is a loan and there is a Memorandum of Understanding between each state and the CBN.

“If there is a case of a state using the money for purposes other than what the loan was meant for, then appropriate action will be taken.”

Workers in Edo, Sokoto, Nassarawa and Plateau states will start receiving their outstanding salaries next week following the disbursement of their states’ share of the N338bn bailout which amounts to N26.93bn.

Mu’azu, in a statement on Friday, said in line with the decision of the National Economic Council, a total of 19 out of the 27 states had benefitted from the bailout.

He said that contrary to reports that Ogun State had accessed N20bn, the actual amount it received was N18.9bn.

On the tenure of the bailout facility, he said that all the states are having 20 year tenor except Ogun which opted for a 10 year tenor.

Earlier, states like Kwara, Zamfara, Osun, Niger, Bauchi, Gombe, Abia, Adamawa, Ondo, and Kebbi had applied for and received various sums from the bailout facility. Other states include Ekiti, Imo, Ebonyi, Ogun, and Oyo which were granted in the week.

Meanwhile, Saturday PUNCH learnt that many of the state governors who have received the bailout had been using various tactics to delay the payment of their workers’ salaries.

According to Saturday PUNCH’s sources, some of the governors received the bailout shortly before they marked their first 100 days in office, while others got their own immediately after.