Governors Kick against FG’s Directives on Refund of Palliative Fund

*N5bn grant to states shambolic, says ACF

Chuks Okocha in Abuja

Some members of the Nigeria Governors’ Forum (NGF) have rejected the directives by the federal government that the funds given to the states as palliatives to cushion the effects of petrol subsidy removal would be refunded, THISDAY has learnt.
This is coming as the Arewa Consultative Forum (ACF) has described the N5 billion in palliatives and grants to each state as shambolic and unscientific.

The federal government had approved a paltry N5 billion for each of the 36 states of the federation for procurement of food items and fertilisers as part of efforts to alleviate the suffering associated with fuel subsidy removal in the country.
This was the high point of the resolutions of the monthly National Economic Council (NEC) meeting held on Thursday at State House, Abuja, which was presided by Vice President Kashim Shettima.

Governors Yahaya Bello of Kogi State, Babagana Zulum of Borno State, Charles Soludo of Anambra State, Seyi Makinde of Oyo State, and Uba Sani of Kaduna State had briefed journalists on the outcome of the NEC meeting.
Speaking after the meeting, Zulum explained that the N5 billion “funding has to be shared with a formula as follows: 52 per cent of this money is given to states as grants, while 48 per cent of the N5 billion is to be paid back on an instalment basis within 20 months to the CBN by the states and the local government areas in Nigeria.”

But THISDAY gathered that the governors were said to have argued in their Wednesday’s meeting that since the funds were meant for palliatives, they should not be refunded by the states as directed by the federal government.
Some of the governors were also unhappy with the Chairman of the NGF and Kwara State governor, AbdulRahman AbdulRazaq, for accepting on behalf of the governors that the funds would be refunded.
Consequently, the governors, it was learnt, ended their meeting on Wednesday night in a shouting match.
THISDAY gathered that the meeting which started around 10 p.m. on Wednesday ended at about 3 a.m. on Thursday without any communiqué on how to resolve the issue of the palliatives.

It was further gathered that the disagreement among the governors was not along party lines.
Some of the governors were also said to have vowed to resist the idea of imposing the decisions of the Presidency on them.
Following the sharp disagreement over the palliatives, the meeting could not reach any agreement or produce a communiqué.
Multiple sources privy to the meeting told THISDAY that the cause of the disagreement was the directives contained in a memo by the Director General of the NGF, Asishana Okauru, that the palliatives would be refunded by the states.

According to the memo, any state governor who was not willing to refund the funds for the palliatives after the maturity date should not collect the funds.
The memo from the NGF Secretariat further directed that any governor, who was unwilling to refund the full funds for the palliatives should refund the N2 billion already collected by him as part-payment.

The memo sighted by THISDAY, which was signed by Okauru, and entitled: ‘Re: Distribution of Palliatives – Terms of FG Facility),’ said the states are free to opt out of the offer and return a sum of N2 billion already given to each of them.
According to Okauru in the letter, “I have been directed by the Chairman, H.E. AbdulRahman AbdulRazaq to forward the terms of the facility as follows: Facility size: N4,000,000,000; Loan (48%): N1,920,000,000; FGN Grant: (52%); N2,080,000,000.00 Beneficiary each state government; Tenure: 20 months; Interest Rate: Nil; Moratorium: Three months; Repayment Mode: Monthly; Repayment Amount: N120,000,000; and 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.”

Two of the governors who spoke to THISDAY separately confirmed that there was a heated argument in the meeting over the palliatives.
They explained that the memo from the Okauru took them unawares.
The governors argued that since a position had been taken by the Chairman of the NGF and Governor of Kwara State, AbdulRahman AbdulRazaq of Kwara State, there was no need for the NGF meeting.
 One of the governors said: “The precedent is that any time there is a meeting of the National Economic Council (NEC), we meet first to take a position as a body, but in the morning of Thursday, we were just handed a directive from the Director General as if we were children.
“We did not agree on the content of the memo; that was why we had a heated argument and as I talk to you, we did not agree and as such there was no communiqué at the end of our meeting.

“We did not agree because the repayment amount, which is N120,000,000.00 monthly, simply means that the Central Bank of Nigeria will be directed to use the Security Irrevocable Standing Payment Order (ISPO) to deduct the money from the revenue due to the states.
“The palliatives are a relief to the states due to the hardships to states from the removal of the petrol subsidy. Why collect it back? To collect it back means that it is no longer a palliative,” the governor told THISDAY.

According to another governor, “The NGF is supposed to be independent, but now, it seems that we have a chairman who takes orders and will want to force it down on us, the governors. This will be resisted.”
It was also learnt that the administrative staff of the NGF was sent out when the governors’ meeting became heated.
Telephone calls put across to Okauru by THISDAY were not answered

N5bn Grant to States Shambolic, Says ACF

Meanwhile, the ACF has described the N5 billion proposed for each state as palliatives and grants as shambolic and unscientific.
The Spokesman of the forum, Professor Tukur Muhammad-Baba, in an interview with journalists yesterday, said there is no basis for giving the same amount to Lagos, Oyo, Kano, and Bayelsa states, as their populations and statistics of eligible people differ.

Muhammad-Baba said, “I am not happy about such a blanket distribution of N5 billion to each state. In the first place, there is no basis for the distribution. I mean, if you are looking for poor people, are you allocating the same amount to Bayelsa, Lagos, Oyo, and Kano states, and you expect it to make an impact?
“This shows that we are doing things like what grammar people call ‘hunter’s pack’. You don’t plan, you don’t strategise, you just came out and made an announcement on that. There is no basis for sharing money with states on an equal basis.
 “We are talking of poor people and poor people is a question of proportion, we know there are over 140 million poor people in Nigeria. The number of people suffering from poverty in Lagos, Oyo, and Kano will not be the same as those living in poverty in Bayelsa, Taraba, or Jigawa. So, what is the basis? What impact is it going to make?

“You are accompanying it with 30,000 bags of rice. How many people is that going to reach? Take a state like Sokoto, for example. They have over seven million people by the latest National Population Commission estimate. So, how many people are 30,000 bags of rice going to feed?”  he queried.
He noted that the government is not working on a definite plan, saying, “The government is implementing a shambolic policy; you need to come to the aid of the poor people, there is no doubt about it, that is scientific, but you need to do it in such a way that your intervention will not be a drop in the ocean.”