Why Governors are unwilling to Pay Workers Salary with Paris Club Refund

Fri, Dec 1, 2017 | By publisher

Featured, Politics

Nigerian governors are unwilling to clear arrears of salaries they are owing workers despite the federal governments’s release of another tranche Paris Club refunds

By Anayo Ezugwu

DESPITE the directive by President Muhammadu Buhari to the governors to clear outstanding salaries of workers before Christmas with another tranche of the Paris Club refunds, they are still being recalcitrant. They are denying that the president gave such order while approving the payment of the Paris Club balance, during which he also urged Kemi Adeosun, minister of finance, Udo Udoma, minister of budget and national planning, Godwin Emefiele, governor, Central Bank of Nigeria, CBN, to negotiate with the governors on the payment of the funds.

President Buhari, who made the announcement at the end of a meeting with a delegation of the Nigerian Governors Forum on Monday, November 27, said: “For Nigerians without sources other than their salary, I am concerned that workers should be able to pay rent, school fees, buy drugs and take care of their families. I am so much concerned that people should have something to eat for Christmas.”

But the governors under the umbrella of Nigeria Governors Forum, NGF, through Abulrazque Barkindo, head, media and public affairs, NGF, in a statement said no mention of all workers arrears was ever made by President Buhari. He said the governors had appealed to the president to once again authorise the finance ministry and other officials to hasten the payment of the remainder of the Paris and London Clubs loan refunds as they had factored the monies into their 2018 budgets.

“President Muhammadu Buhari’s instruction that the money be paid before Christmas, however, draws its background from the series of delays in the previous disbursements to the states by the finance ministry, which by commission or omission had exacerbated and indeed increased the number of months that workers are owed salaries. For example, the first bailout that President Buhari approved was not paid until October. Four months after the president had given approval for the money to be paid.

“It was the same practice with the first tranche of the Paris-London Club repayment, which was approved in mid-2016 but took until December 2016 to hit the states’ accounts. It is imperative to add that the Paris–London funds were legitimate funds of the states and not loans as several sources had thought. Barring any such happenstances, however, governors, who are equally very worried about their workers’ plights, are ready to wipe away workers tears by paying their emoluments before Christmas,” the statment said.

Realnews investigation have shown that the federal government has so far released a total of N760.18 billion to the 36 states and the Federal Capital Territory, FCT, Abuja, in the first and second tranches of the Paris Club Refunds. About N516.39 billion was released in the first tranche while N243.80 billion was disbursed to states in the second tranche as part of the reimbursement for the over-deductions on the Paris Club loan.

A statement signed by Salisu Dambatta, director of press of the federal ministry of finance, indicated that the refunds were in respect of the debt service deductions from the shares of states from the federation account made in respect of the Paris Club, London Club and Multilateral debts of the federal government and states.

Analysis of the refunds showed that Taraba State has so far received the largest chunk of the refunds in the two tranches, totalling N40.54 billion. The state received N34.93 billion in the first tranche and N5.61 billion in the second tranche. The oil producing states of Delta, Akwa Ibom and Bayelsa states received the three highest amounts of refunds after Taraba State to the tune of N37.60 billion, N35.98 billion and 34.90 billion, respectively in the two tranches.

In the first tranche, Delta got N27.61 billion; Akwa Ibom got 25.98 billion; Bayelsa got N24.90 billion, while in the second tranche, the three oil producing states got N10 billion each. The FCT got the least refund of N2.05 billion in the two tranches, being N1.37 billion in the first tranche and N684.87 million in the second tranche.

Gombe, Ebonyi and Nasarawa states got the least refunds after the FCT amounting to N13.42 billion, N13.52 billion and N13.65 billion, respectively, in the two tranches combined. Further breakdown showed that Gombe State got N8.95 billion in the first tranche and N4.47 billion in the second tranche; Ebonyi got N9.02 billion in the first tranche and N4.51 billion in the second tranche, while Nasarawa state got N9.10 billion in the first tranche and N4.55 billion in the second tranche.

The federal government made the releases on conditional basis that a minimum of 50 percent should be used to pay workers’ salaries and pensions. In November 2015, the federal government attempted to save states from their financial crises through the restructuring of the N575.516 billion bank loans owed by 23 states into Federal Government of Nigeria, FGN Bonds.

The federal government tagged the gesture, which got the approval of President Buhari as a stabilisation package to bail out states that had been unable to meet their financial obligations. The stabilisation package saw N575.516 billion state loans from commercial banks being restructured into FGN bonds.

Despite releases of the above funds to the states, some states still owe workers salaries, pensions and gratuities. With states like Borno, Gombe, Edo, Kwara, Benue, Niger, Imo and Taraba owing salary and pension arrears raging from four months to 32 months. According to a nationwide survey by BudgIT, 20 states in Nigeria owe workers and pensioners salaries and entitlements ranging from one to 36 months.

BudgIT, in a statement on Tuesday, June 6, said the survey focused on the frequency of salary payment of six different categories of workers in all 36 states namely: primary school teachers, secondary school teachers, local government workers, state independent workers, pensioners and state secretariat workers.

The survey showed many states defaulted in the payments of pensions and gratuities, with Imo, Taraba and Niger states owing pensioners two to three years in entitlements. It added that Kogi, Abia, Benue, Oyo, Ekiti and Ondo states have not paid their workers’ salaries in 2017, owing at least four months’ salary.

“From the survey carried out, we discovered that apart from the fact that 16 states which are yet to pay the pensions of former civil servants in their service, eight of these states have not paid their pensioners at least for 12 months, while states like Imo, Taraba and Niger owe pensions of about 2 to 3 years. Notably, these pensioners expressed how unhappy they are, their dissatisfaction with the government and how hard it has been for them to survive.’

According to Budgit in addition to outstanding pensions, we note from our survey that across all categories, states like Kogi, Abia, Benue, Oyo, Ekiti and Ondo have not paid their workers’ salaries for this year 2017; owing at least 4 months’ salary. However, the likes of Lagos and Rivers have been consistently impressive with their up to date and full payment of civil servants’ remuneration.

– Dec. 1, 2017 @ 11:26 GMT