*CBN to package N250bn 'salary loan' for states

*DMO moves to reduce debt-servicing expenditures

FINANCIAL relief will, this week, come the way of states and local councils struggling to tame their aggrieved workers, who have been owed many months of salary arrears.

The debate about paucity of funds notwithstanding, President Muhammadu Buhari yesterday directed the sharing of N413.7bn (about $2.1 billion) between the states and the local government and ordered a N250 special intervention fund to be packaged by the Central Bank of Nigeria (CBN) to offer financing to the states, ranging from N250bn to N300bn.

The $2.1billion, according to the Presidency, 'is sourced from recent Liquefied Natural Gas (LNG) proceeds to the Federation Account," the release of which has already been okayed by the president. A debt relief programme proposed by the Debt Management Office, (DMO) will also help states restructure their commercial loans currently put at over N660 billion and extend the life span of the loans while reducing their debt-servicing expenditures.

Reports also indicate that states and local councils are to share $1.6bn from the Excess Crude Account. An authoritative source within the Presidency said the 'comprehensive package was in line with Buhari's resolve to put an end to the lingering crisis of unpaid workers' salaries in the country, especially in several states of the federation.

The source said the three-pronged relief package would end the workers' plight. The N250bn CBN-packaged facility, as approved by the President, would serve a soft loan to states for the purpose of paying backlog of salaries.

"This third option (reduction of debt-servicing expenditures a proposed DMO relief programme), by extending the commercial loans of the states, would therefore make available more funds to the state governments which otherwise would have been removed at source by the banks. The federal government will use its influence to guarantee the elongation of the loans for the benefit of the states," according to the Presidency.

Informed government sources also explained that this package, which was considered at the National Economic Council (NEC) last week, is designed specifically for workers. In his speech, while inaugurating the NEC last week, President Buhari asked the Council, which is a constitutional advisory body to him, to, as a matter of priority, consider how to liquidate the unpaid salaries of workers across the country, a situation he observed has brought untold hardship to the workers.

"While the over $2B which is sourced from LNG proceeds to the federation account would be shared among the states using the revenue allocation formula, the CBN will also make available the special intervention fund to states and then negotiate the terms with individual states," according to the source within the Presidency.

"The packages that have now been approved by President Buhari are expected to go into effect this week as the President is said to have directed that release of the funds should be made as soon as possible to assuage the plight of thousands of Nigerian workers in the federal and state governments.

At the NEC meeting, the relief measures were extensively discussed between the state governors and top officials of the federal government, including the CBN governor, and the Permanent Secretaries from Ministries of Finance and Petroleum Resources. Other agencies actively involved in the process include the DMO and officials from the Office of the Accountant General of the Federation.

Media reports last month say no fewer than 12 of the 36 states of the federation are facing difficult times as the salaries they owe their workers are approximately well over N110bn. This represents the salaries being owed by governments of 10 of the states of the federation. They are Osun, Rivers, Oyo, Ekiti, Kwara, Kogi, Ondo, Plateau, Benue, and Bauchi states.

It would appear that the Finance Ministry and the CBN have pegged the amount needed to settle outstanding public workers salaries at about N250 billion.