BEVERLY HILLS, September 11, (THEWILL) – The Federal Government has revealed that it will soon begin the deduction of the N614 billion Budget Support Facility it gave to 35 sates, the Minister of Finance, Budget and National Planning, Zainab Ahmed, has said.
The minister disclosed this at the Public Consultation Forum on the draft 2020-2022 Medium Term Expenditure Framework in Abuja saying the deduction would commence in the Federation Accounts Allocation Committee (FAAC) provision for states in September.
She said the process will not require a consideration of the fiscal strategy paper (FSP) implementation, but to ensure the states stayed on the path of fiscal sustainability.
She also added that the funds would be deducted from source and remitted to the Central Bank of Nigeria (CBN), adding that the refund would not form part of the revenue for funding the budget.
“It was a loan which was advanced by the CBN and the repayment will be made to the same CBN.
“So the recovery process for us is to deduct from the FAAC allocation to the states and remit same to the CBN.
“We are going to start these remittances by the next FAAC. So there will be no requirement for us to consider the Fiscal Sustainability Plan (FSP) implementation.
“We want the states to stay on the path of fiscal sustainability, but it will not be a condition for the deduction. We will deduct direct from source and remit to the CBN,” the minister said.
The federal government gave the conditional budget support facility to the states through the Central Bank of Nigeria (CBN) in 2017. to enable the states to meet their financial obligations to civil servants and pensioners.
The money was provided at a 9 per cent interest rate, with a grace period of two years. Only Lagos state was exempted as it didn’t need it.