The Federal Government has released a state-by-state breakdown of another tranche of Paris Club refund of over-deductions on the Paris Club/London Club loans and multilateral debts on the accounts of states and local governments from 1995-2002.
A statement from the Ministry of Finance said these payments – N243, 795,465,195.20 – ”were made to the 36 states and the Federal Capital Territory upon the approval of the President on May 4, 2017.”
Akwa Ibom, Bayelsa, Delta, Kano and Rivers states received the largest disbursements of N10 billion each.
This second tranche of Paris Club refund is a “partial settlement of long-standing claims by state governments relating to over-deductions from their Federation Account Allocation Committee (FAAC) allocation for external debt service arising between 1995 and 2002.”
The statement added that Minister of Finance Mrs. Kemi Adeosun explained that these debt service deductions were in respect of the Paris Club, London Club and multilateral debts of the federal and state governments.
Mrs. Adeosun noted that “while Nigeria reached a final agreement for debt relief with the Paris Club in October 2005, some states had already been overcharged.”
The funds were released to state governments as part of the wider efforts to stimulate the economy and were specifically designed to support states in meeting salary and other obligations, thereby alleviating the challenges faced by workers.
The releases, the ministry said: “were conditional upon a minimum of 75 per cent being applied to the payment of workers’ salaries and pensions for states that owe salaries and pension.”
The ministry “is reviewing the impact of these releases on the level of arrears owed by state governments.”
A detailed report is being compiled for presentation to the Acting President, Prof. Yemi Osinbajo, as part of the process for approval for the release of subsequent tranches.
Some of the states have already announced how they will spend the money.
Cross River State Commissioner for Finance Asuquo Ekpenyong Jnrsaid the state’s N6 billion will be spent on gratuities, pensions and salaries.
Ogun State Commisioner for Finance Wale Oshinowo said Governor Ibikunle Amosun had approved that N4.5 billion of the N5.7billion received should be spent on cooperative deduction arrears to all categories of workers.
Oshinowo said N3.4 billion had been disbursed for the payment of six months arrears of outstanding cooperative deductions to all categories of the workforce at the state level; N1.1 billion was disbursed for the payment of three months of outstanding cooperative deductions to workers at the local government level.
The balance of N1.2 billion would go into state expenditure.
He said whereas the Federal Government advised state governments to use at least 50 per cent for payment of workers’ emolument, Amosun had apportioned 79 per cent to the workforce.
“Ogun State is apportioning 79 per cent to staff welfare and only 21 per cent on state expenditure, aside the fact that the state government, in its usual practice, has paid June 2017 salary to all categories of workers at both the state and local government levels.
“The state government is ready to offset all outstanding staff related expenses, as soon as more funds are available,” Osinowo said.
In a statement, Osun State Bureau of Information Director-General Semiu Okanlawon said: ”The refund, totalling N6.314bn, was paid into the state coffers on Monday July 17, 2017.
“In line with our government’s promise to utilise the resources of this state in the best interest of our people, we hereby restate our commitment to this promise as we begin shortly transparent deployment on our commitments to the concerned stakeholders.”
Benue State acting Governor Benson Abounu said the second tranche of N6.4 billion receioved by the state would be used to settle backlog of salaries and tackle infrastructure deficits.
The state got N12.7 billion in the first tranche last year.
Speaking after the State Executive Council meeting at the Benue People’s House in Makurdi, Abounu said such payments would only be effected after carrying out “one or two processes”.
The government is currently carrying out staff audit to flush out ghost workers from its payroll.
The acting governor explained that the on going verification by a committee on payment of salaries would not be an impediment to the payment.
“I wish to inform you that we expected over N12 billion as second tranche of the refund, but only half of the amount was released by Federal Government due to paucity of funds.”
Benue State acting Governor Benson Abounu said the second tranche of N6.4 billion receioved by the state would be used to settle backlog of salaries and tackle infrastructure deficits.
The state got N12.7 billion in the first tranche last year.
Speaking after the State Executive Council meeting at the Benue People’s House in Makurdi, Abounu said that such payments would only be effected after carrying out “one or two processes”.
The government is currently carrying out staff audit to flush out ghost workers from its payroll.
”I wish to inform you that we expected over N12 billion as second tranche of the refund, but only half of the amount was released by Federal Government due to paucity of funds,” said the acting governor.
