Fidelity bank card banner Emerald Energy Institute Camano banner

Bailout deduction: More states to go bankrupt next month

By News Express on 11/09/2019

Gmail icon

Views: 403

The financial crisis rocking some states of the federation may worsen from next month when the Federal Government begins deduction at source of the N650 billion bailout fund given to 35 states to resolve urgent obligations in the twilight of President Muhammadu Buhari’s first term.

The deduction which would be made from their statutory allocations from the Federation Accounts Allocation Committee (FAAC) by latest indications would leave majority of the states which depend on the handout from Abuja, bankrupt.

Giving this hint during the presentation of the Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), yesterday in Abuja,  Minister of Finance, Budget and National Planning, Mrs.  Zainab  Ahmed, said that the fund would not be used to fund  the 2020 budget because it was a loan obtained from the Central Bank  of Nigeria (CBN) which would be repaid to the apex bank.

She added, however, that the money would be deducted at source from the Federation  Accounts Allocation Committee (FAAC) fund next month.

“The N614 billion bailout fund given to the states is not going to form  part of the revenue for funding the budget. It was a loan which was advanced by the Central Bank of Nigeria (CBN) and the repayment will be made to the CBN. So, the recovery process is that we deduct from the FAAC  allocations from the states  and then we return it to the CBN and we are starting  this process by the next FAAC” she declared.

On the personnel cost which has risen to N3.0 trillion, she said that the government is taking steps to curtail the upsurge.

To this effect,  she noted that  Ministries, Departments and Agencies (MDAs) have been given till  October this year to link with Integrated  Personnel Payroll Information System  (IPPIS) failing which their salaries would be delayed.
“The personnel cost has continued to rise.

Government has however, taken steps to contain the rise of personnel cost including a target by Mr President that by the end of October, every MDA  must  be on IPPIS. The consequences of that is that any MDA that drags its feet over moving to IPPIS will not be getting their salaries from that time” she noted. The minister said that  government is making efforts to curtail the rising overhead expenditure and has cut it to the barest minimum.

“On the expenditure side of the framework, we are trying to get the expenditure to as low as practical. As a matter of fact,  we have stripped overhead cost to the barest minimum.

Having projected a production of  2.1 million barrels per day; projected crude oil of  55 million barrels per day;  an exchange rate of N305 to a dollar, we are projecting an aggregate Federal Government revenue of  N7, 810 trillion. This is a slight movement from N6.99 trillion  in 2019 and you will also see that there was a positive movement in the 2021 and 2022.

“Oil revenue is projected to decline from  N3.688 trillion in 2019 to N2.367 trillion in 2020. This is because of  the lowered production volumes as well as the lowered crude oil price per barrel.

Non-oil revenue is also increasing from N1.409 trillion in 2012. The increase we project is N1.55 trillion in 2020. This is spread over income tax, VAT, Nigerian Customs Service (NCS) revenue as well as the share of federal government inspection federation account.

“Debt service is also increasing. This is so because we have increased our borrowing in the past three  years and therefore debt service obligation has also increased from N2.144 trillion  in the year 2019 to N2.45 trillion in the year 2020.

“Recurrent expenditure which was N4.85 trillion in the year 2019 has increased to  N4.749 trillion in the year 2020. This is occasioned by  the rise in the personnel cost as well as the marginal rise in overhead…” (Daily Sun)


Source News Express

Posted 11/09/2019 12:33:13 PM





You may also like...
Nigeria elected VP of UN World Tourism Organization...

Umahi commends INEC over ‘excellent’ electoral process

DR Congo declares 4 new Ebola outbreak in...

New appointments at Technology Distributions

Tension: PDP challenges National Assembly

Consumers protest impending hike in electricity tariff

Jonathan and PDP not ready for 2015 elections...

Kidnap Ordeal: My abductors treated me well —Jonathan’s...

FG is shortchanging Ekiti on Paris Club refunds...

Kaduna Govt. to probe Army-Shiites clash, bans processions...

RRS nabs man over visa racketeering •How he...

Release our son unconditionally, Nnamdi Kanu’s parents tell...


Latest News 2 killed as gunmen storm Rivers communities Rape case: Fatoyinbo files preliminary objection, says Busola’s case ‘filed out of time’ Akpabio announces plans for industrial clusters in Niger Delta Magashi and challenges of national security Delta tribunal verdict fair, just, well-deserved, says Oyovbaire •Condemns court action as unnecessary Hostage regains freedom after 4 years in pirates’ custody PDP heads for Appeal Court as tribunal upholds Governor Masari’s re-election NNPC unveils plans to revamp refineries from January 2020 Obi advises Nigerian universities to look inwards No meeting between Dickson and Sylva — PDP Youth Network Okowa to Christians: Dedicate your life to serving God Another perspective on xenophobic attacks, By Odimegwu Onwumere


Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (542,623 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (443,885 views) Shameless Genevieve Nnaji exposes breasts in public (390,367 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (327,231 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (295,388 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (254,043 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (250,340 views) 10 cars more expensive than Jets (239,140 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (232,034 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (218,020 views) Lagos plane crash: Journalist releases victims’ names (196,298 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (193,872 views)


CBN milk production

CBN banner advert

UBA Wise Savers Promo


Categories Advertorials (3) African Press Organisation (81) Art & Literature (102) Business & Economy (4,454) Business Verdict (80) Columnists (1,113) Complaints & Requests (96) Enterprise & Opportunities (215) Entertainment (666) Features (815) Global Business Monitor (445) ICT Monitor (63) International (3,972) Interview (203) Live Commentary (30) Love Matters (171) Maggie's Blog (418) News (51,603) Opinion (1,364) Pidgin (17) Politics (11,469) Religion (1,103) Sports (2,173) Stock Watch (39) AMA & Al Jazeera Global Update







APO Group Partner




GOCOP Accredited Member

GOCOP Accredited member



Africa Media Agency and Al Jazeera