President Muhammadu Buhari recently raised hopes for the clearing of the backlog of salaries owed workers in financially beleaguered states with a directive to his key financial officers to work with Nigeria Governors Forum(NGF) to determine the outstanding amounts due to the states from the Paris Club refunds, and ensure their payment before the end of the year.
The amount to be paid to the affected states is not yet known as it will be determined by the sum over-deducted from each state by the federal government prior to Nigeria exiting the London/Paris Club of creditors. The key finance officers who will work out the details of the refunds include the Minister of Finance, Mrs. Kemi Adeosun, Minister of Budget and National Planning, Udo Udoma, and the Governor of the Central Bank, Godwin Emefiele.
The president’s directive followed pleas from the state governors urging him to make a commitment to pay all outstanding debts owed the states from the Paris Club deductions to ease their financial problems. According to the chairman of the NGF, Gov. Abdulaziz Yari, the president’s commitment to the payment became necessary so that the states could factor the refund into their 2018 Appropriation plans. Buhari did not oppose the release of the outstanding refunds, as long as the treasury can afford it. He, however, urged the governors to use the money to clear the salary arrears owed their workers before Christmas.
State governors had earlier received 50 percent of the refund, leaving a balance of 50 percent, which the president confirmed his readiness to pay at a meeting with state governors at the Presidential Villa, Abuja, last week. Besides the payment of the outstanding Paris Club refund,the Federal Government had earlier approved a fresh budget support loan facility for 35 states across the country, totaling N28 billion, to help them meet their salary needs and other obligations. Each state is expected to get N800 million. Only Lagos declined the loan, perhaps because it has the financial wherewithal to meet its financial challenges.
The Minister of Finance and the CBN Governor have also been directed to release the budget support loan to the states. This is good news for the state workers and pensioners who are owed arrears of their salaries and pensions. However, it will be good to know how the state governors utilised previous disbursements from the Paris Club refund.
Since it is clear that the Paris refund in question was not borrowed from the federal government, but are actually the entitlements of the states, there are many reasons to be skeptical of the governors’ commitment to using the money to clear their workers’ salary arrears.
Let the approving authorities, in this case, the Finance Minister and the CBN Governor, quickly release the refunds to the states. Secondly, the state legislatures and the citizens should hold their governors accountable on how the payments are utilised. Sincerity and transparency are vital in this matter. The claim by some state governors that they were never asked by the president to clear the backlog of their workers’ salaries before Christmas is an indication of their poor attitude to the plight of these workers and pensioners. It is unfortunate that some of them are not moved by the sorry condition of their workers and retirees. This is callous. Even without the president urging the governors to prioritise the payment of salaries, the governors should be concerned that these workers have responsibilities, such as rents and school fees of their children, among other obligations. It is only uncaring governors that will ignore the president’s plea.
Beyond this, the dwindling revenue from the monthly federal allocations has made it expedient for the states to be creative in broadening their revenue base. They should eschew the current overdependence on monthly handouts from the federal government. They need to be innovative in the face of the nation’s current economic challenges. More importantly, the revenue sharing formula should be reviewed to give more money to the states to enable them discharge their social responsibilities.
The relevant government authorities should expedite the process for the release of the Paris refunds. Let it not be heard that after December, many states are still in arrears of their workers’ salaries. That will defeat the essence of the president’s directive on the release of the funds and its use for the payment of outstanding salaries before the end of this month. It is important that all the relevant government financial officers and the state governors strive to achieve this goal.