CBN Approves Loans For States To Pay Salary Arrears

States burdened with salary debts now have a reprieve as the Central Bank of Nigeria, CBN has approved the request by commercial banks to grant loan facilities to indebted states to enable them to offset backlogs of salary arrears.

The National Executive Council, NEC, had at its meeting in June charged the CBN to collaborate with other stakeholders to find out ways to liquidate salary arrears owed by states and local governments.

The apex bank said that so far, only two states, Kwara and Zamfara have met the conditions for the disbursement of the loan and have therefore received the facility.

According to the apex bank, the conditions for accessing the loan facility include:

1. A resolution of the State Executive Council authorizing the borrowing.

2. The State House of Assembly consenting to the loan package,

3. Issuance of Irrevocable Standing Payment Order (ISPO) to ensure timely repayment.

The debtor states include Abia, Akwa Ibom, Bauchi, Benue, Cross River, Ekiti, Enugu, Imo, Jigawa, Kano, Katsina, Kogi, Ogun, Ondo, Osun, Oyo, Plateau, Rivers, Yobe, and Zamfara.

The salary debts owed by these states range from two months to eleven months.