Paris Club Refund: Glimmer of hope for civil servants

Salisu Na’Inna Danbatta, Director of Information, Federal Ministry of Finance

The release of N243.8 billion to the 36 state governments and the Federal Capital Territory as the second instalment of Paris Club refund raises hope that the state governments will utilise it to settle workers’ salaries and pension arrears

Civil servants and pensioners who have endured several months of salary and pension arrears can now heave a sigh of relief. The Federal Government has released the sum of N243.8 billion to the 36 state governments and the Federal Capital Territory (FCT) as the second instalment of Paris Club refund with specific instruction that 75 per cent of the funds should be utilized to offset workers’ salaries and pension arrears. The first tranche of N522.74 billion was released in December 2016.

Salisu Na’Inna Danbatta, Director of Information, Federal Ministry of Finance

Salisu Na’Inna Danbatta, Director of Information, Federal Ministry of Finance

A recent statement issued by the Federal Ministry of Finance and signed by Salisu Na’Inna Danbatta, director of Information, explained that the refunds were approved by President Muhammadu Buhari on May 4 in 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 to the Paris and London Clubs’ loans and multilateral debts of the federal and state governments. Some states were overcharged before Nigeria could reach a final agreement for debt relief with the Paris Club in October 2005.

“The funds were released to state governments as part of the 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 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 statement read in part.

The Ministry of Finance warned that a review of the impact of these funds on the arrears salaries and pension owed by state governments would form part of a detailed report it is compiling for presentation to Acting President Yemi Osinbajo, as part of the process for approval for the release of any subsequent tranches.

A breakdown of the allocations showed that state governments that received N10 billion, which was the highest allocation to an individual state, were Akwa Ibom, Bayelsa, Delta, Kano and Rivers. Those at the bottom of the ladder were Gombe, Ebonyi and Nassarawa sates. They received N4.472 billion, N4.508 billion andN4.551 billion respectively.

Semiu Okanlawon, media assistant to the Governor of Osun State, said the state received N6.314 billion, which would be utilised in the best interest of the people.

However, some states such as Abia may not be able to offset the arrears they owe their workers and pensioners from the proceeds of the second Paris Fund refund. Abia State government said that the sum of N5.7 billion it received was far below its expectation of between N12 billion and N14 billion. Many believe that the situation has put the state in a difficult position regarding the arrears of pensions and salaries of the workers. However, the state government assured that it was committed to clearing the outstanding arrears of salaries and pensions owed Abia workers.

Comrade Uchenna Obigwe, Abia State chairman of Nigeria Labour Congress (NLC) described the situation as worrisome, saying that workers would brainstorm to ensure that their salaries and pensions were paid.

By Dike Onwuamaeze

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