‘FG’s N5 Billion Subsidy Removal Palliative Is A Loan’

The palliatives given to state governments across the federation and the Federal Capital Territory (FCT) by the Federal Government to cushion the effects of the removal of petrol subsidy is reportedly a loan.

Naija News had earlier reported that FG on Thursday announced N5 billion palliative for each state and FCT.

The Governor of Borno State, Babagana Zulum at the end of the National Economic Council (NEC) meeting presided over by Vice President, Kashim Shettima, said the palliative would enable state governments to procure 100,000 bags of rice, 40,000 bags of maize and fertilizers to cushion the effect of food shortage across the country.

According to The Cable, 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.

Okauru said in the memo, “I have been directed by the Chairman, H.E. AbdulRahman AbdulRazaq to forward the terms of the facility as follows.

“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: N120,000,000.00
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 N2 billion already disbursed to them.”