Sundiata Post gathered that this would not be disbursed when the FAAC payout exceeds N500 billion, which has not happened since July 2015.
The first programme of relief was announced by President Muhammadu Buhari in July last year, consisting of the conversion of some states’ bank borrowings into FGN long bonds (N575bn) and long-term credits at single-digit interest rates from the CBN (up to N300bn in aggregate).
The second was the FAAC payout to states in April without the usual deduction of their debt serving costs for naira bond issues and external loans guaranteed by the FG. The saving amounted to N11bn.
The programmes are designed to enable the state governments to pay their employees’ salaries, and so inject money into local economies. There are no figures for these salary arrears but we suspect that more than half the states are affected.
Since the FAAC payouts are running at half their level before the slide in the oil price and since they account for 80% of states’ total revenues, we see the programmes as a holding operation at best.