Tambuwal asks CBN not to recover $2.1bn loans to states

April 21

10:27 2021

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Aminu Tambuwal, governor of Sokoto, has appealed to the Central Bank of Nigeria (CBN) to shelve its plan to recover $2.1 billion loans given to state governments as budget support facility.

He made the plea on Tuesday during a panel session at the high-level dialogue on financing safe schools and creating safe learning communities organised by the federal ministry of finance, budget, and national planning in Abuja.

In 2015, the federal government gave out bailout loan facilities to states.

At the time, state governments had “huge debts hanging on their necks” which made it difficult to pay salaries, among other financial obligations.

On Thursday, Godwin Emefiele, CBN governor, said the apex bank will ask state governments to repay the loans.

He made the remark while reacting to a claim by Godwin Obaseki, Edo state governor, that the federal government printed N60 billion in March to support allocation for states.

“It is very inappropriate for people to just give some coloration to the word ‘printing of money’ as if it is a foreign word coming from the sky,” Emefiele said.

“In 2015/2016, we were in a similar (fiscal) situation, but it is far worse today. We provided budget support facility to all the states of the country and that loan remains unpaid till now. We are going to insist on the states paying the loan back since they are effectively accusing us of giving them loans.”

Speaking at the event, Tambuwal urged Emefiele and the finance minister to avoid recovering the loan at this time.

He said doing so will hinder state government funding to education and creation of safe schools.

“Recovering the debts now from the states will make it impossible for the state governments to fund education in general and the safe schools project in particular,” he said.

Meanwhile, Zainab Ahmed, minister of finance, budget and national planning, had dismissed the claim by Obaseki as false.

However, Obaseki stood by his position asking the federal government to end the current monetary rascality and stop playing the ostrich.