N5bn subsidy palliative combination of grant, loan to states — FG

The Federal Government has cleared the air on the N5 billion oil subsidy palliatives it offered to states to cushion the impact of fuel subsidy removal, saying the money is a mixture of grant and loan, inferring that part of the funds would be repaid to the Federal Government.

It added that it has released N2 billion only to state governments.

This was disclosed by the Minister of Finance and coordinating minister for the economy, Wale Edun, when he addressed journalists at his maiden press briefing in Abuja on Friday.

Edun said the Federal Government decided to release N2 billion only as the first tranche to forestall a spike in inflation, and maintain macroeconomic stability if N5 billion had been released, stressing that the Government was mindful of the consequences of its decisions, hence, it opted to stagger the release of the palliative funds.

The Minister of Finance and coordinating minister for the economy explained that the N5 billion palliatives to states is “a blend of grant to and borrowing by the state governments”.

Edun added that “the President is going to deliver a better life to Nigerians by encouraging investment that increases productivity that grows the economy and thereby creating jobs and reducing poverty”.

The minister pointed out that plans are in the offing to review tax incentives being enjoyed by some entities, noting that though they are not bad, but as time changes, the incentive regime has to be reviewed to avoid being a distortion to economic growth.

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