Governor Abiola Ajimobi of Oyo State

The Oyo State House of Assembly on Tuesday approved the state government’s application for a N14.2 billion bailout fund from the Federal Government.

The News Agency of Nigeria (NAN) reports that the approval was given at an emergency plenary session of the assembly in Ibadan.

The Speaker of the House, Mr Michael Adeyemo, said that the bailout, in addition to the monthly allocation, was strictly meant for the payment of workers’ salaries.

Adeyemo said that the legislature’s approval was part of the conditions spelt out by the Federal Government to states facing severe financial difficulties.

He said that from the bailout fund, N1.39 billion would be paid monthly for the first three months, while N1.11 billion would be paid monthly in the subsequent nine months.

Adeyemo said that the state government was expected to pay back the fund with nine per cent interest accrued over a period of one year.

The speaker, however, said that the Federal Government had given the beneficiary states one year suspension before the commencement of the loan repayment.

“ The Federal Government has restricted state governments from getting loan facilities from commercial banks partly due to its high interest rates.

“It decided to provide the bailout in form of a loan.

“The repayment will not start until after a year moratorium by which time, hopefully, the state would have become economically viable,” he said. (NAN)