The end to the lingering and back-breaking
burden of unpaid workers’ salaries in several
states of the country, President Muhammadu
Buhari has approved a comprehensive relief
package.
Sources said, yesterday, that President Buhari
okayed a three-pronged relief package including
sharing of fresh allocations, granting of soft
loans and restructuring of states’ debt-servicing
payments.
The packages are expected to go into effect this
week as the President is said to have directed
that release of the funds should be made
urgently to assuage the plight of thousands of
Nigerian workers in the federal and state
governments.
The packages are:
About $2.1b (N413.7bn) will be shared in fresh
allocation between the states and the federal
government. The money is sourced from recent
Liquefied Natural Gas (LNG) proceeds to the
federation account.
A Central Bank of Nigeria (CBN)-packaged
special intervention fund that will offer financing
to the states, ranging from between N250bn and
N300bn. This would be a soft loan that states
could access to pay the backlog of salaries.
Implementing a debt relief programme proposed
by the Debt Management Office, DMO, which will
help states restructure their commercial loans
currently put at more than N660bn, and extend
the life span of such loans while reducing their
debt-servicing expenditures.
Also, a total of N391 billion from the Excess
Crude Account, ECA, will be shared among the
three tiers of government, the Accountant-
General of the Federation, Ahmed Idris, disclosed
yesterday.
With the N413.7 billion LNG proceeds it means
the three tiers of government will share a total of
N804.7 billion.
By extending the commercial loans of the states,
according to the third package, more funds
would be made available to the state
governments, which otherwise would have been
claimed at source by the banks.
Vanguard gathered that the Federal Government
has agreed to use its influence to guarantee the
elongation of the loans for the benefit of the
states.
Sources explained that this package, which was
considered at the National Economic Council,
NEC, last week, is designed specifically for
workers, adding that President Buhari reviewed
and approved the package in his bid to intervene
and alleviate the sufferings of workers, some of
whom have not been paid for over 10 months.
Contacted, the Special Adviser to the President
on Media and Publicity, Mr. Femi Adesina
confirmed the development, adding that the
President is deeply concerned about the plight of
the workers.
While inaugurating the NEC last week, President
Buhari asked the council to, as a matter of
priority, consider how to liquidate the unpaid
salaries of workers across the country, a
situation he observed has brought untold
hardship to the workers.
While the N413bn LNG proceeds would be shared
among the three tiers of government using the
revenue allocation formula, the CBN will also
make available the special intervention fund to
states and then negotiate the terms with
individual states.
At the NEC meeting, the relief measures were
extensively discussed between the state
governors and top officials of the Federal
Government including the CBN governor, and the
permanent secretaries from ministries of Finance
and Petroleum Resources. Other agencies that
were actively involved in the process include the
DMO and officials from the Office of the
Accountant-General of the Federation, it was
learned.
Currently, 12 of the 36 states of the federation
are owing their workers more than N110 bn. The
most affected states are Osun, Rivers, Oyo, Ekiti,
Kwara, Kogi, Ondo, Plateau, Benue, and Bauchi.
However, sources said the Finance Ministry and
the CBN may have pegged the amount needed to
settle all the outstanding public workers salaries
at about N250 billion. There are also workers in
the federal government’s employ whose salaries
have not been paid for months and their cases
would be taken care of by the new package.
FG, states to share N391bn ECA fund
On the N391 billion ECA fund, Idris, who was at
the Presidential Villa alongside the Permanent
Secretary of the Federal Ministry of Finance,
Anastasia Daniel- Nwaobia to brief President
Buhari on the state of affairs in the ministry, said
the Federation Account Allocation Committee
(FAAC) would meet to determine sharing
formula.
Idris took over from Jonah Otunla after his
appointment on June 25.
Speaking to State House Correspondents, he
said what the new regime met on the ground
was between the $1.6 to $1.7 billion which is
equivalent to N391 billion.
“It is hovering between $1.6 and $1.7 billion,
and that is what we are going to distribute
among all the three tiers of government —
federal, states and local governments based on
the approved formula.”
Speaking on the outcome of their meeting with
President Buhari, he said that the President
advised on prudent management of scarce
resources.
“The general message is clear. Mr. President had
a clear direction, and we all have to fall in line;
prudent management of resources and identify
more alternative ways of generating revenue
which we are set to do and to manage the
meagre resources we found on the ground very
efficiently and effectively for the betterment of
the economy,” Idris said.
Addressing journalists earlier, the Permanent
Secretary Ministry of Finance, Nwaobia also
revealed that the meeting with the President was
to formally brief him on the state of the nation’s
finances.
She also hinted that the Central Bank of Nigeria
(CBN) and the Budget Office of the Federation
were verifying oil subsidy payments.
Nwaobia however dismissed insinuations that
there was massive looting going on in the
ministries due to the absence of ministers,
stressing that their absence cannot stall
progress in the business of governance.
She said: “The state of Nigerian finances is
okay. Our finances are okay, though we are still
going through challenges of revenue stream to
government and this you know obviously is from
the oil shock, the price of oil that has dropped. It
has significantly reduced the revenue stream to
government but we are working on other ways to
see how we can shore up the revenue, so that
we will be able to meet our expenditure.
“We did not say that we will not pay subsidy. As
the former minister said, there is a liability on
subsidy which is being verified by the CBN and
Budget Office of the Federation. The issue had to
do with the forex differentials which they were
claiming and this committee is looking into it,
and as soon as it is resolved we will be able to
say the verified amount also.”
The bailout package elicited commendations
from some eminent Nigerians, who, however,
urged our leaders to be prudent in the
management of the scarce resources. Those who
spoke on the issue included legal icon, Professor
Itse Sagay (SAN); former presidential candidate,
Professor Pat Utomi and Labour Party scribe,
Kayode Ajulo.
It’s a welcome development—Sagay
Professor Sagay,described the bail out as a
welcome development, saying: “Since they are
owing salaries and all states have a share in the
excess crude oil account and because they are in
a desperate situation, I think it is a welcome
decision.”
The legal icon, however, dismissed the notion
that the bailout is a sign of weakness on the
part of the President.
“People believe in extremism but to be strong
does not mean that you have to be extreme. It
does not mean that you have to lack any
feelings for people. He (Buhari) must be thinking
of thousands of workers, who have not been
paid for six months.”
It is imperative for Nigeria’s survival — Utomi
On his part, Professor Pat Utomi said the bailout
for states is imperative for the economic survival
of the country. His words:
“It is important to recognize that without such
bailout, the economy will be in danger as there
will be no spending going on while those offering
services will be unable to offer anything. The
bailout is very important for the economy.”
Besides, he said “this development should now
make government impose conditionality that will
stop mismanagement and unnecessary
spendings”.
Priority needs to be set right—Ajulo, LP scribe
On its part, the Labour Party, which accused the
state governors of allegedly mismanaging
resources meant to run the states, advised that
the bailout funds must be judiciously spent.
LP National Secretary, Dr Kayode Ajulo, said:
“Priority needs to be set right on the granting
and usage of the bail out. It is unfortunate that
governors, most of whom operate flamboyantly
and mismanaged their states’ resources are
begging for bailout. Salaries have to be paid,
therefore the bailout must come with a condition
that the money must be used to offset the
unpaid salaries.”
The LP scribe noted that “I say this knowing the
antics of some of our governors as we should
not be surprised that some of them may commit
the money to another white elephant project or
buy private jets which is the latest vogue among
them. Greek was given conditions when she
asked for bail out from the European Union and I
see nothing wrong in setting a condition for the
bail out as there must be an end to the
prevalence of financial indiscipline among our
state executive.”
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