Lagos - A prominent financial services firm has argued releasing funds from the Excess Crude Account (ECA)would not be a lasting solution to the financial challenges the country's state governments are facing.
Rand Merchant Bank (RMB), the financial services provider, thus painted a grim picture of Nigeria's economic prospects amid reports the country's Treasury was virtually empty.
According to the bank, in its latest Global Markers report released on Wednesday, severe indebtedness threatens to plunge the country's 36 state governments into financial disarray.
The firm pointed out that governors had appealed to the Presidency for fiscal support to help settle US$3,3 billion in accumulated debt.
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"Three solutions to avert a crisis were presented to President Muhammadu Buhari at a meeting yesterday (Tuesday), ranging from the federal reimbursement of monies spent on projects to an extension of bank loans to the doling out of remaining oil revenues held in the ECA (Excess Crude Account)," RMB stated.
RMB said with $2 billion in the coffers, an early release of the ECA might provide a temporary fix but the state needs to generate sustainable earnings to service the regular financial needs of the three tiers of government.
On Tuesday, Buhari pledged to provide a report on Nigeria’s financial and economic affairs in the next few weeks, claiming that the new administration would restore sanity to the system.
- CAJ News