A recent report suggesting that the Federal Government may write-off bailout funds granted states across the states, is to say the least absurd and corruptible. Governor of Ogun State, Ibinkunle Amosun, dropped the hint recently, that the Federal Government may write-off the funds used to bailout 30 states of the federation, on account of sharp economic realities facing the country.
Amosun spoke in Abeokuta, during the opening of the treasury board meeting for the 2016 budget, held at the Oba’s complex in Oke Mosan state secretariat. The governor explained that Federal Government reasoned that most states on its debt list were not economically viable and might not be able to meet the conditions of repayment.
Records available as at September, this year, gave a breakdown of the loans repayable at an interest rate of nine per cent over 20 years as follows: Abia- N14.152 billion; Adamawa- N2.378 billion; Bauchi- N8.60 billion; Bayelsa – N1.285 billion; Benue –N28.013 billion; Borno – N7.680 billion; Cross River – N7.856 billion; Delta – N10.036 billion; Ebonyi – N4.063 billion; Edo – N3.167 billion; Ekiti – N9.604 billion; Enugu – 4.207 billion; Gombe – N16.459 billion; Imo – N26.806 billion; Katsina – N3.304 billion; Kebbi – N0.690 billion; Kogi – N50.842 billion; Kwara – N4.320 billion; Nasarawa – N8.317 billion; Niger – N4.306 billion; Ogun – N 19.00 billion; Ondo – N14.686 billion; Osun – N34.988 billion; Oyo – N26.606 billion; Plateau – N5.357 billion; Sokoto – N10.093 billion and Zamfara – N10.020 billion. Ogun State opted for a 10-year repayment moratorium. To date, the affected states have collected far more N338 billion as bailout, with another $150 million from NLNG dividends recently shared among them.
Expectedly, Amosun’s revelation has become virile on social media platforms, public domain and in the mainstream media because if the governor’s claim is true, it offends the sensibility of Nigerians. It gives the impression that President Buhari’s administration intends to aid further profligacy of the governors rather than hold them accountable for funds in these harsh economic times.
As it were, we are not against the Federal Government handing out bailout or providing a soft landing for states, what we are not comfortable with is a total write-off as disclosed by Gov Amosun. It is of note and we are aware that the current cash squeeze experienced by some states today, is self-imposed. Past and present administrations in the states lacked the creative insights to generate revenue; instead they engaged in unrealistic capital projects, relied on federal allocation and spent state funds recklessly.
Presently these states are heavily indebted to both local and international financial institutions and are only able to survive through the Federal Government’s bailout. While their circumstance appears miserable, there are reasons why the current scenario can be reversed to put states in better financial standing.
If they must learn to be disciplined financial managers, shun corrupt practices, like using public funds for private needs of family members, political associates, girlfriends, etc., they must be held accountable for every kobo that goes into their coffers. We also hope that the bailout granted so states was out of genuine concern and not based on political consideration because most of the states in question are of the ruling All Progressives Congress, APC. Similarly, we condemn in unequivocal terms any attempt to cancel the debts on whatever grounds, either political or otherwise. The funds are loans with long-term repayment timetable. Every state must payback what it owes. We are against ‘free bailouts’ and we say no to any write-off either real or imagined.


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