President Muhammadu Buhari has approved an additional financial intervention for states as part of a three-pronged relief package that will help make the states liquid in order to pay wages, according to Monday reports.
The additional bailout figure has been put at about N713.7 billion.
The bailout is in addition to all of the $1.7 billion (N391 billion) left in the Excess Crude Account (ECA), which the Accountant General of the Federation told state house correspondents on Monday will be split amongst the three tiers of government.
At least 12 of the 36 states owe several months of unpaid wages to workers with Osun, Kwara, Benue, Ekiti, Kogi and Rivers topping the list.
Some federal government workers have also not been paid their entitlements in months.
The three-pronged relief package will include;
* The sharing of about $2.1billion (N413.7billion) in fresh allocation between the states and the federal government. The money is sourced from recent LNG proceeds to the federation account, and its release okayed by the President.
*A Central Bank-packaged special intervention fund that will offer financing to the states, ranging from between N250bIllion to N300billion. This would be a soft loan available to states to access for the purposes of paying backlog of salaries.
*A debt relief program proposed by the Debt Management Office, DMO, which will help states restructure their commercial loans currently put at over N660billion, and extend the life span of such loans while reducing their debt-servicing expenditures.
From the N713.7 billion approved by the President, according to Presidential Villa sources, the reports said, N413.7 billion will be a special intervention fund, while the remainder will be a soft loan to states.
The reports quoting sources said the N413.7billion will come from the recent Liquefied Natural Gas (LNG) proceeds and while the CBN will provide the balance as a special intervention fund.
The Debt Management Office (DMO) will also assist states in the restructure of about N660billion commercial loans in their books.
The source added that the President has also stopped the deduction of monthly allocations to states at source. The federal government will instead stand as guarantor for the loans.
Presidential spokesman, Femi Adesina, confirmed the development to the media.