COVID-19: FG Engages CBN on Debt/Interest Moratorium for States.

The Federal government is currently engaging the Central Bank of Nigeria(CBN)to agree on a Debt and Interest Moratorium for States on Federal Government and CBN-funded loans.

Finance, Budget and National Planning Minister Mrs Shamsuna Zainab Ahmed disclosed this Monday in a world press conference held in Abuja.

According to the Minister, the move will create fiscal space for the States, given the projected shortfalls in FAAC allocations.

“Accordingly, once monthly average FAAC receipts fall below a specific threshold, interest and capital payments by States shall be suspended till monthly average FAAC receipts exceed the threshold”, she said.

Sehe said that details of the moratorium will be expeditiously worked out with a view to submitting the final proposals for Mr. President’s guidance and final approvals.

She further stated that the intervention is vital to create fiscal space for the States, as they deal with the health and economic impact of the crisis caused by COVID 19.

According to her, States will also be encouraged to explore similar arrangements for their outstanding debts to Commercial Banks.

Meanwhile, Mr. President has approved the establishment of a-N500 billion COVID-19 Crisis Intervention Fund.

According to the Minister, the establishment of the COVID-19 Crisis Intervention Fund will involve drawing much-needed cash resources from various Special Funds and Accounts, in consultation with and with the approval of the National Assembly.

She said the N500 billion is proposed to be utilized to:
a) Upgrade healthcare facilities as earlier identified by the Presidential Task Force on COVID-19 and approved by Mr. President;
b) Finance the Federal Government’s Interventions to support States in improving healthcare facilities;
c) Finance the creation of a Special Public Works Programme; and
d) Fund any additional interventions that may be approved by Mr. President.