The Federal Government (FG) has granted ₦5 billion for each state and the Federal Capital Territory (FCT) to purchase food products for distribution to the indigent in their states.
Borno State Governor Babagana Zulum made the announcement shortly after the National Economic Council (NEC) meeting at the Presidential Villa in Abuja.
Thursday’s development follows a rise in the price of food and petroleum due to the withdrawal of a commodity subsidy.
In addition to the fund, Zulum stated that the federal government provided each of the 36 state governors with five trucks of rice.
Governor Zulum went on to say that the state governors must obtain 100,000 bags of rice, 40,000 bags of maize, and fertilizers.
BizWatch Nigeria understands that the money issued to the 36 states and FCT is a loan.
In a memo to governors entitled “Re: Distribution of Palliatives – Terms of FG Facility”, Asishana Okauru, director-general of Nigeria Governors Forum (NGF), said states might opt out of the offer and return a sum of N2 billion already given to them.
“I have been directed by the Chairman, H.E. AbdulRahman AbdulRazaq to forward the terms of the facility as follows,” Okauru said in the memo.
“Facility size: ₦4,000,000,000.00
Loan (48%): ₦1,920,000,000.00
FGN Grant: (52%) ₦2,080,000,000.00 Beneficiary each state government
Tenure: 20 months
Interest Rate: Nil
Moratorium: Three months
Repayment Mode: Monthly
Repayment Amount: ₦120,000,000.00
Security Irrevocable Standing Payment Order (ISPO)
“Your excellency is invited to note that this offer is optional and states that do not wish to participate may opt-out and refund the ₦2 billion already disbursed to them.”
He stated that 52% of the cash were transferred to state governments as grants and 48% as loans.
