Osinbajo to mediate as governors and CBN clash over the repayment of bailout loans

VICE president Professor Yemi Osinbajo is to mediate in an ongoing dispute between the Nigeria Governors Forum (NGF) and the Central Bank of Nigeria (CBN) over the repayment plan for bailout loans.

As a result of the coronavirus pandemic, many Nigerian states have been able to meet their recurrent costs and have had to be given bailout funds by the CBN. Now that the global economy is gradually picking up, the CBN has asked the states to begin repaying these loans but the NGF has asked for more time.

Under the original agreement reached, repayments ought to start this month and CBN governor Godwin Emefiele, has cautioned about the consequences of any further delay. Insisting that the states should begin immediate repayment, Mr Emefiele stressed that there were challenges arising from delays particularly as it concerned auditing.

However, Governor Kayode Fayemi of Ekiti State, the NGF chairman requested an extension on behalf of his colleagues. Laolu Akande, Professor Osibajo's spokesman said the NGF asked for the deferment at the recent National Economic Council (NEC) meeting.

Mr Akande said: “On the budget support facility, state governors restated their request to defer the repayment of the loans, which was to have started this month. Ekiti State's Governor, Kayode Fayemi, who is also the chairman of the Nigeria Governors’ Forum, reported interactions with the finance minister and the CBN governor regarding the matter.

“CBN Governor, Godwin Emefiele, emphasised the importance of the timely repayment of loans, especially those owed to commercial banks, indicating the challenges inherent in a further delay in payment, including audit concerns. He said the repayment of the commercial loans should resume this month and as a result, the vice president stated that he will be holding a meeting soon with representatives of the state governors, the finance minister and the CBN governor to resolve the issue raised.”