Business
‘Bail Out Fund On Salary, Wasteful’
An economist, Mr
Iduonku Ikata, has said that the recent bail out funds handed down to states in the country to pay their workers would not add any positive impact on the economy if such funds could not be used in infrastructural development.
Ikata, a Senor Partner, Ikata, Ikata and Company who spoke to our correspondent in an exclusive interview in Port Harcourt yesterday, explained that the development would put so much money into the recurrent expenditure with little for capital expenditure.
“It is capital expenditure that drives productivity, it is capital expenditure that provides infrastructure while recurrent expenditure does not add anything, it just bloats the cost of governance,” he said.
According to him, it was necessary to determine under which window such funds were released and applied.
He said if government could not define the windows under which these bailout expenses are applied, it would not be easy to give a verdict on the long economic picture.
Ikata, who is a tax expert further explained that if such funds were strictly for the payment of worker’s salaries alone and not contractors for ongoing projects to provide benefit to the public then such funds were not well spent.
He said even with the assumed general knowledge that the money the federal government was giving to the states was to enable them pay salaries, it would at the long run not add any social benefit to them (states).
“It is not likely to add any social infrastructure to the assets of the states, therefore, the question remains that if you are not procuring assets or anything that promises future economic benefit it means the money spent on an item that will not produce any tangible infrastructure is of no benefit to the people”, he said.
On the ability or otherwise of the various state governments to pay their workers, Ikata expressed the view that the governors did not set their priorities right.
He said it was not that the governments could not pay salaries but it was their priorities that are being questioned.
He further opined that the governors deliberately removed workers salaries out of their priority lists to enable them finance other exigencies.
“If what you want to do with the money (salary) was a capital item with the expectation of a future economic benefit, good, but we all suspect and I doubt if it was expended on infrastructure”, he said.
Business
Private sector gets N2.2tr credit in 30 days — CBN
Credit to Nigeria’s private sector rose to N83.26 trillion in June 2026 from N81.04 trillion in May, signifying a positive balance of N2.22 trillion month-on-month.
Year-on-year, the figure represents a nine per cent increase compared with the N76.13 trillion recorded in June 2025. The latest figures come as the CBN continues to balance efforts to control inflation with the need to support economic growth and expand credit to businesses.
The CBN data shows that credit to Nigeria’s private sector increased by approximately 2.74 per cent month-on-month between May and June 2026. Also, the CBN data noted that credit to the government fell slightly to N40.03 trillion from N40.38 trillion. Other assets, net, dropped to N10.76 trillion from N12.63 trillion.
The credit surge signifies sustained growth in lending to businesses and other private-sector borrowers during the month. The rise in private sector credit was recorded alongside an increase in net domestic credit, despite declines in credit to government and other assets.
Further analysis of the report says that compared with June 2025, private sector credit rose by about N7.13 trillion yea-on-year but net domestic credit increased by approximately N1.87 trillion during the month.
The CBN’s relatively tight monetary policy stance notwithstanding, more banks still loaded funds to the private sector within the period. The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) held its 306th meeting on July 20 and 21.
The Committee reviewed recent developments in the global and domestic economies, assessed emerging risks to the outlook and considered their implications for monetary policy and retained all rates.
The Committee decided to retain the Monetary Policy Rate at 26.5 per cent; the Standing Facilities Corridor around the MPR at +50/-450 basis points and retain the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and non-TSA public sector deposits at 75.00 per cent.
The MPC decision means that credit extension in the private sector will likely continue to rise because of rising confidence in the sector and calls by stakeholders for banks to invest in the private scetor instead of government securities.
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