At least 31 state governments in Nigeria have collectively borrowed N457.17 billion to pay salaries to their respective state civil services. This significant financial move was facilitated through the Salary Bailout Facility (SBF), a strategic intervention by the Central Bank of Nigeria (CBN) aimed at alleviating the fiscal pressures faced by these states.
This is according to a report seen by TheWitness, which meticulously presents the disbursement of the over N10.3 trillion intervention fund by the apex bank.
The report highlights the SBF’s post-implementation impact, noting the crucial relief it provided in settling the backlog of salaries across the states. This intervention not only alleviated the immediate financial burdens on the state governments but also likely affected the livelihoods of numerous civil servants awaiting their remunerations.
Among the top beneficiaries of this bailout facility were states like the following
The report further identifies a vital issue of concern, which is the delay in principal and interest repayments by the Participating Financial Institutions (PFIs). This delay underscores the broader challenges of fiscal management and sustainability within the states, highlighting the need for more robust financial strategies and practices.
To address these ongoing challenges, the report recommends that an increased focus be placed on enlightening state investment companies about the benefits of Public-Private Partnerships (PPPs). Such partnerships could significantly enhance the state’s Internally Generated Revenue (IGR), improving fiscal health and reducing dependence on bailout facilities for salary payments.
