President Muhammadu Buhari has called on governors to use at least 25 per cent of the refunds made to them from excess deductions for external debt service for settlement of outstanding workers’ entitlements.
A statement by the Senior Special Assistant on Media and Publicity, Garba Shehu, said the President approved that N552.74 billion be paid in batches to the states being owed.
He said the 33 states in this group will receive 25 per cent of their approved sums in the first instance latest today
The refunds, he said, arose following the claims by states that they had been overcharged in deductions for external debt service between 1995 and 2002.
In a directive through the Minister of Finance, Mrs Kemi Adeosun, President Buhari said nonpayment of workers’ benefits, particularly salary and pensions, must not be allowed to continue as a national problem and should be tackled with all the urgency that can be summoned.
When he assumed office last year, the President declared an emergency over unpaid salaries, following the discovery that 27 of the country’s 36 states had fallen behind in payments to their workers, in some cases for up to a year.
A bailout loan was issued to the states twice, with a first batch of about N300 billion given to them in 2015 in the form of soft loans.
The administration also got the Debt Management Office (DMO) to restructure their commercial loans of over N660 billion and extended the life span of the loans.
“Because this did not succeed in pulling many of the states out of distress, the Federal Government this year gave out a further N90 billion to 22 states as yet another bailout loans under very stringent conditions.
“President Buhari has expressed the opinion all the time that the payment of salaries and pensions must be given priority to save both serving and retired workers and their families from distress.”