Debt Management Office (DMO) has restructured the commercial bank loans of 13 cash-strapped states in a bid to cut-down domestic debt increased as a result of falling crude oil revenue.
The Nigerian economy has seen its government revenue reduced by more than half as prices of brent and bonny light have fallen below its budget benchmark.
As a result of the reduction, many states whose budgets rely heavily on federal allocation have been unable to pay salaries in time or continue infrastructure projects and other state services.
The Debt Management Office (DMO) has issued bonds for 13 states which had run into trouble servicing commercial loans worth 252 billion naira, the National Economic Council said in a statement. The bonds were issued to 12 commercial banks with which the states had outstanding loans.
The measures are a continuation of a three-pronged bailout for the states announced in July. It included dividing up $2.1 billion in newly acquired Nigerian natural gas export dividends, central bank interventions of 250 to 300 billion naira and commercial loan restructuring by the DMO.
The debt office had already restructured loans worth 322 billion naira for 11 states in August while another 18 had obtained soft loans from a special emergency fund, said the council, without giving details.
-Culled from Reuters
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