Presidency to governors: N573bn payment second tranche COVID-19 NG-CARES support scheme

The Presidency Sunday spoke up on the controversial N573 billion payment to state governments, describing it as a loan from the World Bank and not a grant.

Senior Special Assistant to the President on Media and Publicity Temitope Ajayi made the clarification in a statement issued in Abuja.

He said the loan was part of the COVID-19 livelihoods support scheme under the NG-CARES Programme funded by the World Bank.

The payment, he said, is expected to support state governments in meeting their financial obligations and implementing development projects. 

…What Makinde said

The position came against the backdrop of a media report  credited to  some governors as  denying  receiving the federal government’s grant, thus generating some controversies.

Specifically, Oyo state Governor Seyi Makinde had said: “Before I speak more on further actions we have taken to show our commitment to productivity and sustainability, let me respond to a long message I received earlier in the week from a concerned citizen.  

“The message was about a purported N570 billion Hardship Fund “given” to the 36 States by the Federal Government. I was queried about what I used the money for. 

“Let me state categorically that this is yet another case of misrepresentation of facts. The said funds were part of the World Bank-assisted NG-CARES project—a Programme for Results intervention. 

“The World Bank facilitated an intervention to help States in Nigeria with COVID-19 Recovery. CARES means COVID-19 Action Recovery Economic Stimulus.  

“It was called the Programme for Results because States had to use their money in advance to implement the programme. After the World Bank verified the amount spent by the State, it reimbursed the States through the platform provided at the Federal level.  

“The Federal Government did not give any State money; they were simply the conduit through which the reimbursements were made to States for money already spent.”

…Presidency clarifies  

Making the clarification, however, the Presidency pointed out that the federal government guarantees the loan, which means it will be responsible for repayment in event of failure on the part of the states.

Ajayi said the focus should be on the positive impact of the funding on the lives of citizens, rather than the semantics of whether it is a loan or grant.

The statement also quoted President Bola Ahmed Tinubu as expressing his readiness to continue working with the governors as partners in nation-building, expanding the economy, and enabling shared prosperity for all Nigerians.

He said: “They are not denying. They are saying it is not a grant, a dash from the federal government. That it is a loan from World Bank

“I think the issue is not whether it is a loan or grant. The point, as clearly stated in the President’s broadcast, is that the states got money and the amount, which is the second tranche under the Covid-19 livelihoods support scheme under the NG-CARES Programme funded by the World Bank, is N570 billion.

“The fact of the matter is states are getting needed support and funding to improve the lives of the people. Meanwhile the World Bank facility is guaranteed by the federal government because every multilateral loans must have Sovereign guarantee which means the loan will be paid by the FG in case the sub-nationals are unable to pay.