The Central Bank of Nigeria (CBN) has approved the request by Deposit Money Banks (DMBs) to provide states that are owing their civil servants backlogs of salary arrears with financial succour to to enable them offset them.
The Street Journal recalls that Dr. Abraham Nwankwo, the Director-General, Debt Management Office (DMO), had on Monday said that bonds had been released to 14 commercial banks to enable them to aid states and that debt restructuring was open to all states and the FCT.
A statement issued in Abuja on Wednesday by Mr Mu’azu Ibrahim, CBN’s Director of Corporate Communications, said the approval followed the apex bank’s decision to consider ways of liquidating the outstanding staff salaries owed by state and local governments in collaboration with stakeholders.
It said the conditions for accessing the loan facility include State Executive Council authorisation, state House of Assembly consenting to the loan package, as well as issuance of Irrevocable Standing Payment Order (ISPO) to ensure timely repayment.
“Out of the 27 states involved, funds have been disbursed to two states namely Zamfara and Kwara states that met the requirements as agreed with their respective banks,” the statement said.
It added that efforts will be made in the coming days to conclude disbursements to other states so that all outstanding salaries to civil servants can be cleared.