States May be Required to Submit Debt Profile – FG

by on April 25, 2016
  • Worried by the inability of some states in the federation to meet their financial obligations, especially payment of workers’ salaries, even after receiving bailout funds, the federal government may be considering ordering states to publish their audited accounts and submit debt profile.

The move, if implemented, is to check financial profligacy and enhance discipline and transparency in the management of States’ finances.
Minister of finance, Mrs. KemiAdeosun gave the hint when she clarified that the debt repayments due to the states’ creditors will be fully paid notwithstanding the deferralfor the month of March.
This is contained in a statement issued over the weekend in Abuja by the minister’s SA on Media, Mr. Festus Akanbi, which said in part: “The Ministry is keen on ensuring that the programme of financial discipline being driven by the Federal Government is replicated in all tiers of government, including elimination of payroll fraud and increased spending efficiencies in overhead, Enhanced financial transparency by the publication of audited accounts and submission of debt profile, may also be required.”
The minister however reassured states’ creditors that debt repayments due to them would be fully paid notwithstanding the deferral for the month of March.
“Further to the states debt repayment deferral for the month of March that was announced last Thursday, the Federal Ministry of Finance has clarified that the debt repayments due to the states’ creditors will be fully paid notwithstanding the deferral.
“The Federal Government will make the due debt repayments, which would be offset against liabilities owed to the states. Hence all creditors, including bondholders, will not be adversely impacted,” said the statement.
The Ministry further reiterated that the deferral is not a bail out but rather a responsive measure by the federal government to put states in a better position to meet their salary obligations, pointing out thatthe “deferral amounts to a total of N10.9 billion”.
She reassured that “all states will receive the relief in this instance, however further deferrals will be subject to the agreement of a Fiscal Restructuring Plan to be prepared by each state with clear measurable objectives”.

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