State govts borrow N46.17bn from banks to pay salaries over economic crisis

DAILY POST

State governments borrowed about N46.17 billion from three banks to pay salaries between January and June 2023 from commercial banks such as Access Bank, Fidelity Bank, and Zenith Bank.

Data from the first half of the 2023 financial statement of the three commercial banks disclosed this.

The states borrowed the most from Access Bank in six months, with a record of N42.97 billion.

Access Bank said the outstanding balance on the salary bailout fund was N58.84 billion by June 30, 2023, from N101.81 billion in December 2022.

It was followed by Zenith Bank (N1.78 billion borrowed) and Fidelity Bank (N1.42 billion borrowed) within six months.

“The amount of N58,842,651,795 represents the outstanding balance on the state salary bailout facilities granted to the bank by the Central Bank of Nigeria for onward disbursements to state governments for payments of salary of workers of the states. The facility has a tenor of 20 years with a 2 per cent interest payable to the CBN. The bank must lend to the states at an all-in interest rate of nine per cent annually. From this creditor, the bank has nil undrawn balance as of June 30 2023,” Access Bank noted.