The Central Bank of Nigeria has revealed that the bailout package to states to enable them pay salary arrears will be deducted from their statutory allocations. From the discussion the CBN is having with some governors on how the fund will be disbursed, it is clear that rather than hand over the funds to them as grants, the CBN has opted to release it as a form of concessionary loans to be repaid over a long period of time. A top official in the Ministry of Finance said one of the criteria that might be used for the disbursement of the funds would be for the states to sign Irrevocable Standing Payment Orders guaranteeing the repayment of the loans. He said while the deductions from the states’ statutory allocations will not be immediate but will be deducted as country’s revenue profile improves.
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