‘States may seek Federal Government bailout deal’- report

The state governments may request a bailout from the federal government after debts spiral out of control, the chairman of the Forum of Commissioners, Federation Accounts Allocation Committee (FAAC), Timothy Odah, has said.

Oduah made the disclosure when he address newsmen after the monthly FAAC meeting, which distributed two months revenue to the three tiers of government in Abuja on Friday.

He said several states were indebted to contractors and the dwindling revenue from Nigeria’s oil and non-oil earnings had exacerbated the problems.

“The year is almost ending, most states owe contractors and they are causing problems,’’ he said.

Odah also called on the Central Bank of Nigeria to review its monetary policy that mandated states to deposit 50 percent of public accounts with the apex bank.

He criticised the new policy, saying, “it is very demoralising and affecting the states so much.

“The compulsory deposit of 50 percent has heightened the coupon rates on facilities taken by the public offices or states especially.

“We have interest rates going up to 20 percent to 24 percent and this is not good for the states.  The policy is given us a very harsh experience.

“Banks are not given us facilities because of the federal government policy that requests bank to get clearance from the federal ministry of finance before giving facilities to states,’’ he said.

Odah, who is the commissioner for finance in Ebonyi, thanked the federal government for increased allocation to security in the wake of insurgency and terrorism in the country.

He said security allocation in some states had taken a large part of public funds and that had created problem for other sectors.