ABUJA (Reuters) – The Federal Government has begun the process of sharing $2.1 billion with federal, state and local governments to reduce a growing backlog of debts and restructure short-term loans, a spokesman for the vice president said on Monday.
The sharing of revenues from the state-owned Nigeria Liquefied Natural Gas Company was announced earlier this month after governors of the 36 states requested federal government support from President Muhammadu Buhari.
Several states have been unable to pay the salaries of government workers due to the size of their debts.
“The implementation of a three-pronged financial intervention of President Muhammadu Buhari to assuage workers plight and support the states is now in progress,” said Laolu Akande, a spokesman for Vice President Yemi Osinbajo.
Under the measures, the central bank will offer interventions of between 250 and 300 billion naira (($1.26 billion and $1.51 billion) to help the states clear backlog debts.
“State governments will start benefiting from the special intervention fund… in a matter of weeks,” said Akande.
With funds dwindling due to plummeting oil prices, several states have been borrowing in the domestic bond market and from banks to fund infrastructure projects.
Oil sales account for about 70 percent of government revenues in Nigeria, Africa’s top crude producer and the continent’s biggest economy.