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The bailout for states by the federal government of Nigeria has become a subject of controversy with many arguing that the disbursement of the funds has been skewed in favour of some states to the detriment of others. The parlous state of the economy occasioned by dwindling oil receipts made bailout inevitable. Little wonder why the federal government had in early July, 2015 approved the sum of 804.7 billion naira as lifeline for states, to enable them pay their workers several months of arrears of salaries. Activities in many states were virtually grounded. In fact, the issue of unpaid salaries became endemic in many states. This could be attributed to white elephant projects, procurement of private aircrafts, construction of airports and taking loans and bonds to finance various projects by some of the state governments, which had no direct impact on the lives of the people.
This paper on ''Critical Assessment of Federal Government's Bailout in Southwestern Nigeria'' looks into issues surrounding the disbursement of bailout in the affected states especially in the Southwestern states of Nigeria which include: Osun, Oyo, Ogun, Ekiti and Lagos states. It further considers reasons for the bailout, themes of the bailout and the divergent views on bailout to these states. In conclusion, this paper shall suggest in addition to other scholars' perspectives on the benefits of bailout and ways forward in providing alternative method that can avert the states delaying or siphoning the bailout.
Keywords: Assessment, bailout, bail-in, federal government