The Chairman, Special Presidential Panel for the Recovery of Public Property, Okoi Obono-Obla has announced the panel’s commitment to recover the $7 billion bailout fund granted to embattled commercial banks between 2006 and 2008 by the Federal Government.
While making known that the panel is set to recover the fund for the Federal Government, Obono-Obla said the commercial banks who took the fund between the period are yet to make refunds.
Obono-Obla revealed that after over a decade the commercial banks took the bailout, his panel enquired from the Central Bank of Nigeria (CBN) the status of that money. According to the panel chairman, the banks said the money was given to them for free by the Nigerian Government.
Obono-Obla maintained that the bailout fund was not a gift to the commercial banks and so must be recovered and returned to government’s coffers.
A bailout is a situation in which a business, an individual or a government offers money to a failing business to prevent the consequences of its downfall. Bailouts can take the form of loans, bonds, stocks or cash, and they may require reimbursement.
Since President Muhammadu Buhari resumed office in 2015, the presidency has released bailout fund to states and financial institutions.
According to BudgIT research, N1.75 trillion has been given to states as extra-statutory allocation known as bailout since the advent of President Buhari’s administration.
It had been reported that the Federation Accounts Allocation Committee (FAAC), had in 2016, paid states an excess of N10 billion while sharing bailout funds. This is contained in the recently released annual report of the auditor general of the Federation.
FAAC secretariat revealed that under the salary bailout arrangement, the sum of N406.37 billion was the total principal amount released to State Governments that benefited from salary bailout in 2015 and 2016 as recorded in the OAGF summary submitted for audit.