FG suspends loan deductions to enable states to pay salaries

The Federal Government has announced that it has suspended deductions made from various loans given to state governments of the 36 states. This it said was to enable them pay workers's salaries and stabilize their economy. 

The suspension of deduction takes effect from April and may be extended further depending on the debt profile and social needs of  states. 

The Minister of Finance, Mrs. Kemi Adeosun, stated that the postponement was not a bailout. She added that the Federal government's decision was primarily informed by falling oil prices which had drastically affected the income of the Federal Government and states. 

She said: “On the update of the financial situation of the states, it was discussed extensively that currently, the federation account receipt is among the lowest that has been seen in recent memory. 

‘’We are looking at N299 billion this month and that is because of the very low oil prices recorded in January and February. If you remember, oil prices went as low as $28 and $31 and, of course, that has led to a very low federation account as a result of which I approached the President and the governors that we defer the loan deductions from the federation account entitlement.”